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Corporate Funding For Solar Reaches $3 Billion In Q3’2016

Despite an overall drop in clean energy investment in the third quarter, Mercom has revealed total corporate funding for the solar sector grew in the third quarter to $3 billion.

Mercom Capital Group published its quarterly report on funding and merger & acquisition (M&A) activity for the solar sector for 2016 this week, revealing that total corporate funding increased to about $3 billion in Q3’2016, a 76% increase on the previous quarter.

A total of 45 deals were tracked across the quarter, compared to 32 deals in the second quarter — but the totals show the real story, with Q2 only seeing $1.7 billion compared to the third quarter’s $3 billion.

This might also come as a surprise, considering just yesterday we reported that Bloomberg New Energy Finance had found global clean energy investment had slumped to its lowest levels since the first quarter of 2013, reaching only $42.4 billion in the third quarter.


“Funding levels bounced back across the board compared to a weak Q2 but they are still well below last year’s totals,” said Raj Prabhu, CEO and co-founder of Mercom Capital Group. “The combination of slower than expected U.S. demand, the overcapacity situation coming out of China, and global hyper-competitive auctions leading to lower margins has affected the entire supply chain and most of the solar equities are in the red year-to-date. The exception has been the rebound of some of the yieldcos.”

Venture capital funding for the third quarter almost doubled over the second quarter, reaching $342 million over 16 deals, compared to only $174 million over the same number of deals in the previous quarter.


Solar downstream companies raised $273 million across 8 deals, the largest of which came from the $220 million deal raised by Solar Mosaic. Solar public market financing reached $880 million over 5 deals in the third quarter, including one IPO — BCPG, a solar downstream company, which raised $166 million. Debt financing reached almost $1.8 billion in the third quarter, across 24 deals, compared to only $1.3 billion over 12 deals in the second quarter.

The top large-scale project funding was the $397 million raised by Magnetar Capital to refinance its 135 MW UK solar projects portfolio. The remainder of the top 5 are seen below:


Residential and commercial solar funds raised in the third quarter reached $1.1 billion over 5 deals, compared to $1.36 billion over 11 deals in the preceding quarter. Of the $1.1 billion, $760 million went towards lease and $333 million went to loan funds. As a result, so far this year $3.5 billion has been raised across 22 deals — however, this doesn’t compare overly favorably with the same period in 2015, which saw more than $5 billion raised across 21 deals.

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