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Corporate Funding For Solar Sector Falls To $1.7 Billion In Q2’16, According To Mercom

Corporate funding for the solar sector fell to $1.7 billion in the second quarter of 2016, according to new figures published by Mercom Capital Group.

Total corporate funding for the solar sector, including venture capital funding, public market and debt financing, fell to $1.7 billion in the second quarter of 2016, down from $2.8 billion in the first quarter — which itself was a significant drop from the $6.9 billion raised in the fourth quarter of 2015. Unsurprisingly, therefore, year-over-year funding from the second quarter of 2015 was down 71%.

“The solar industry continues to experience weakness in terms of financing activity, and corporate funding in Q2 2016 was at its lowest level in three years,” said Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.

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Global solar venture capital funding for the quarter saw a massive decline in the second quarter, with only $174 million over 16 deals compared to $406 million over 23 deals in the first quarter of the year, though being up slightly on Q2’15’s $142 million over 24 deals. Solar downstream companies were responsible for 64% of the venture capital funding in the quarter, with $112 million raised over 7 deals.

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Public market financing for the solar industry in the second quarter reached $179 million over four deals, up from $94 million over four deals in the first quarter, but down dramatically from $2.3 billion over 12 deals in Q2’15.

Announced debt financing for the quarter came to $1.3 billion over 12 deals, nearly half of Q2’s $2.3 billion over 19 deals, and well down on $3.4 billion over 14 deals in Q2’15.

The top five largest solar project funding deals came to a total of $1,671 million, with the largest being the $588 million secured by Engie for its 100 MW Kathu CSP project in Northern Cape Province, South Africa.

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Residential and commercial solar funds had a good quarter, led by SolarCity, Mosaic, and Sunnova Energy. In total, $1.36 billion was raised for residential and commercial solar funds over 11 deals in the second quarter, a 36% increase on the first quarter. $800 million of the total went towards the solar lease model, with the remaining $555 million going towards loan funds.

There were 17 solar Merger & Acquisition transactions in the second quarter, compared to 14 in the first quarter, with almost half of the transactions involving solar downstream companies. Of particular importance was the merger between Sungevity and Easterly Acquisition Corp.

There was a total of 38 large-scale solar project acquisitions in the quarter, compared to 50 in the first quarter. Of the total 38, 13 disclosed purchase prices, totaling $1.9 billion, compared to 22 disclosed for $1.2 billion in the first quarter. The largest disclosed project acquisition was the $1.4 billion acquisition of the 1,140 MW renewable energy pipeline of Welspun Renewables Energy by Tata Power Renewable Energy.

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