Mercom Capital Group has reported that total corporate funding for the global solar sector has dropped to $2.8 billion in the first quarter of 2016.
According to Mercom Capital Group’s latest report on funding and merger & acquisitions (M&A) for the first quarter of 2016, the solar industry saw its total funding drop to $2.8 billion, compared to $6.9 billion in the immediately preceding fourth quarter of 2015. That’s a decline of around 59% on the previous quarter, and 56% on the same quarter a year earlier, which reached $6.4 billion.
“It’s a tough environment out there,” said Raj Prabhu, CEO of Mercom Capital Group. “Solar public companies in general have had a difficult time raising capital at depressed market valuations. Yieldcos, which accounted for significant financial activity in the debt and public markets last year, have faded this quarter. On the bright side, VC funding held up well, securitization deal activity picked up and residential/commercial funds raised a billion dollars in Q1.”
Total venture capital (VC) funding globally for the solar sector reached $406 million across 23 deals in the first quarter of 2016, compared to $457 million over 17 deals a quarter earlier, and up on the same quarter a year earlier. Most of the VC funding in the first quarter went to downstream solar companies, led by Sunnova Energy, which raised $300 million.
Public market financing “fell off the cliff” according to Mercom, with only $94 million raised over 4 deals, compared to $605 million over eight deals in Q4’15, and $1.3 billion over 10 deals in Q1’15.
Announced debt financing also dropped, with only $2.3 billion over 19 deals, compared to $5.8 billion over 27 deals in Q4’15, and $4.9 billion over 25 deals in Q1’15.
The top 5 large-scale project financing deals for the quarter are as follows:
Residential and commercial solar funds for lease and Power Purchase Agreements continued strong in the first quarter, with $1 billion over six deals announced, compared to $650 million over three deals in the quarter earlier, and raising the cumulative total since 2009 to approximately $18 billion.
There were a total of 14 solar mergers and acquisitions in the quarter, ranked favorably against the 13 in Q4’15.
Project acquisition held steady with 50 transactions, with approximately 2.4 GW of solar projects acquired during the quarter.
The largest acquisitions by dollar amount are as follows:
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