- Mercom Capital counts $7.5 billion as total global corporate funding for solar PV in Q1/2022
- VC Funding amounted to $1.2 billion, while public market financing added up to $2.5 billion
- 23 GW worth of large scale project capacity was acquired during the period with maximum acquisitions reported in the US
- Investment activity can slow down considerably if the US Department of Commerce decides to impose tariffs on module imports from Malaysia, Cambodia, Thailand, and Vietnam
In Q1/2022, total global corporate funding of $7.5 billion for solar PV industry increased 51% QoQ thanks to robust demand, but dropped 7% YoY due to challenges related to supply chain issues, inflation and interest rate trajectory, according to Mercom Capital Group.
In its Q1 2022 Solar Funding and M&A Report, Mercom analysts count $1.2 billion having come from venture capital (VC funding) in 26 deals representing a 45% decline from the previous quarter but 19% improvement over the same quarter last year (see $8.1 Billion Global Corp. Funding For Solar In Q1/2021). The top VC funded company during the period was Palmetto that raised $375 million (see North America PV News Snippets).
In the public market financing space, $2.5 billion came in accounting for a 115% increase on quarterly basis, but down 9% on annual basis. Announced debt financing of $3.8 billion improved 137% but went down 12% year-on-year, respectively.
There were a total of 4 securitization deals with a combined $1.1 billion, having gone up 137%, compared to $458 million raised in 2 deals in Q4/2021.
Solar downstream companies led merger and acquisitions (M&A) activity with 25 deals out of 29 transactions recorded in Q1/2022. A combined 23 GW of large scale solar projects exchanged hands in the period vis-à-vis 13.1 GW in the previous quarter, making it the 2nd highest quarter for this segment recorded to date.
Maximum acquisitions were completed by project developers and independent power producers (PP) with over 17 GW, followed by 3.6 GW acquired by investment firms and funds.
According to the report, of the 82 large scale solar project acquisitions in 20 countries recorded during the reporting period, the US alone accounted for 17 GW, followed by Spain with 1.9 GW and the United Kingdom with over 1 GW.
Going forward, Mercom Capital’s CEO Raj Prabhu cautions of significant headwinds that can slow down the momentum, “Continuing supply chain issues, higher inflation, and the interest rate trajectory going forward are already major concerns. Adding to this, if the Department of Commerce decides to impose tariffs on module imports from Malaysia, Cambodia, Thailand, and Vietnam, we could be looking at a substantial drop-off in investment activity.”
The report can be purchased at Mercom Capital’s website for prices starting from $299.