Solar industry continues to show its resilience in the face of challenging financial market conditions and high interest rates having raised 54% more global corporate funding YoY in H1/2023 totaling $18.5 billion despite 12% drop in the number of deals announced, says Mercom Capital Group.
The market intelligence firm attributes the growth in private investment majorly to the Inflation Reduction Act (IRA) in the US and to global energy transition goals in its latest 1H and Q2 2023 Solar Funding and M&A Report.
"Demand due to the IRA is so strong that even interest rate-sensitive public market and debt financing in solar was up year-over-year. However, lack of easy money affected M&A activities negatively," said Mercom Capital's CEO Raj Prabhu.
In terms of numbers, the venture capital (VC) funding was dominated by the downstream sector that took a major chunk of $3.8 billion raised in 33 deals during H1/2023, an annual increase of 3%. Prabhu pointed out that currently apart from cleantech, artificial intelligence (AI) is the only other sector that attracts VC investments globally.
Top VC deal of H1/2023 was $471 million raised by 1KOMMA5° of Germany that in June 2023 hit $1 billion valuation (see 1KOMMA5° Is New Unicorn On The Block).
Public market financing raised 103% more annually with $6.7 billion in 14 deals, as compared to $3.3 billion in 8 transactions in H1/2022 (see $12 Billion H1/2022 Global Solar Corporate Funding).
The reporting period saw 48 solar merger and acquisition (M&A) transactions, as compared to 53 in the previous year, with Brookfield Renewable's acquisition of Duke Energy's US commercial renewable energy business as the largest of the lot, worth $2.8 billion (see North America PV News Snippets).
Mercom also counts 116 projects having changed hands in the 1st half of 2023 representing a combined 25.5 GW solar capacity. Last year, 37.8 GW capacity was acquired in 148 acquisitions.
The full report can be purchased on Mercom's website with prices starting from $299.
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