Total corporate funding in the solar sector throughout 2016 reached $9.1 billion, a 64% decline over funding figures from 2015, according to a new report from Mercom Capital Group.
“It was a challenging year for solar companies in terms of fundraising even as demand is expected to reach an all-time high,” said Raj Prabhu, CEO and Co-founder of Mercom Capital Group. “However, 2017 looks better than expected as lower module prices are expected to boost installation levels.”
The seemingly-catastrophic drop in funding should come as no real surprise for those who followed Mercom’s quarter-by-quarter analysis through the year — as solar funding for the first, second, and third quarter all reported significant drops over their respective year-earlier companions.
Global venture capital investments in 2016 were the only bright spot, and even then it was a relatively lackluster bright point, reaching only $1.25 billion over 77 deals for the whole year, compared to $1.1 billion over 83 deals in 2015. Solar downstream companies accounted for 80% of this VC funding, raising $985 million. The largest VC deal was the $300 million raised by Sunnova Energy.
The rest of the news is less than impressive.
Public market financing fell to $1.8 billion over 27 deals, compared to $6 billion over 38 deals in 2015. Three IPOs brought in $230 million, while four yieldcos raised public market financing. Debt financing in 2016 reached $6 billion, compared to $18.3 billion a year earlier. There were only three securitization deals in 2016, totaling $387 million — SolarCity with $234.6 million in two deals, and Shenzhen Energy with one deal for $152 million.
Announced large-scale project funding reached $9.4 billion in 2016 over 133 deals, compared to $11.6 billion over 124 deals in 2015. The top investor for large-scale project funding was Santaner, which invested in eight different projects.
A total of $4.9 billion was raised in 30 residential and commercial solar project funds throughout the year, compared to $5.7 billion over 24 funds in 2015.
There were 68 corporate Merger & Acquisition (M&A) transactions in the solar sector in 2016, compared to 81 in 2015.