Global corporate funding in the solar sector in 2024 reached $26.3 billion, a 24% year-over-year (YoY) decline from $34.4 billion, according to Mercom’s Annual and Q4 2024 Solar Funding and M&A Report.

There were 157 deals in 2024 compared to 161 deals in 2023.

Global venture capital (VC) and private equity funding in the solar sector in 2024 reached $4.5 billion in 60 deals, a 36% decline from $7 billion raised in 70 deals in 2023.

There were 14 VC funding deals of $100 million or more in 2024.

Out of the $4.5 billion in VC funding raised in 60 deals in 2024, 87%, amounting to $3.9 billion, went to solar downstream companies.

Solar photovoltaic companies raised $401 million, and the balance of system companies raised $117 million. Thin film companies raised $33 million, concentrated solar power companies raised $22 million, and service providers raised $1 million.

“The market has been trending downward throughout the year. Interest rates have come down in the last two quarters, with the Fed cutting rates three times. However, this has not been enough to revive the funding and financing sector,” Raj Prabhu, CEO of Mercom Capital Group, said.

“The fourth quarter was the weakest due to election-related uncertainty. There is speculation about rolling back the Inflation Reduction Act, restricting funding for certain programs, and shortening the investment tax credit, originally set for 10 years. Once the new administration takes over, we can expect more clarity on policy direction,” Prabhu said.

He also pointed to President Donald Trump’s previous comments on increasing tariffs, which could drive up solar component prices. “Deal-making and fundraising have stalled as investors adopt a wait-and-see approach.”

The top VC-funded companies in 2024 were Pine Gate Renewables ($650 million), Nexamp ($520 million), BrightNight ($440 million), Doral Renewables ($400 million) and MN8 Energy ($325 million).

Public market financing in the solar sector in 2024 totaled $3 billion, a 59% YoY decrease from $7.4 billion.

Nine companies went public in 2024, bringing in $1.3 billion, compared to seven companies that raised $2.1 billion in 2023.

Announced debt financing reached $18.8 billion in 2024, a 6% YoY decrease from $20 billion. Securitization deals were a key contributor, with $5 billion in 16 deals.

“Publicly traded solar stocks and companies have struggled. Rising costs, high interest rates, potential tariffs, and market uncertainty have kept investors on the sidelines,” Prabhu said.

Mergers and acquisitions witnessed a 15% YoY decline in 2024, with 82 transactions compared to 96 in 2023.

There were 82 M&A transactions announced in 2024, with 21 amounting to $17.3 billion. By comparison, 96 companies (27 disclosed) were acquired for $12.4 billion in 2023.

“M&A transactions often require borrowing, but with high borrowing costs, acquisitions have become less attractive. While some good deals are still happening, overall M&A activity has declined year-over-year,” Prabhu added.

The largest transaction was by Brookfield Asset Management and institutional partners, including Brookfield Renewable and Singapore’s Temasek Holdings. They agreed to acquire a 53.12% stake in Neoen, a solar, wind, and energy storage project developer, for $6.54 billion.

Solar downstream companies led corporate M&A activity in 2024, acquiring 66 companies, followed by manufacturers acquiring six companies, and service providers and the balance of system companies with five acquisitions each.

There were 217 large-scale solar project acquisitions in 2024 compared to 231 acquisitions in 2023.

“Financing large projects has been challenging due to high interest rates. Uncertainty around tariffs and rising project costs are adding to the difficulties. Nearly 3 TW of projects are reportedly awaiting interconnection approvals, further extending the queue. In addition, labor shortages and high labor costs have impacted project development. The market has been particularly tough for early-stage projects, which are considered risky until more clarity emerges in the coming months,” Prabhu said.

The total acquired capacity in 2024 amounted to 37.7 GW, a 17% YoY drop from 45.4 GW.

Of the 37.7 GW of large-scale solar projects acquired in 2024, 38% were acquired by project developers and independent power producers.

Investment firms acquired 35%, followed by others (insurance providers, pension funds, energy trading companies, industrial conglomerates, and IT firms), which took a 13% share in 2024. Utilities, oil and gas, and installers acquired the remaining 14%.

The 136-page report covers 289 companies and investors. It contains 107 charts, graphs, and tables.

To learn more about Mercom’s 2024 Solar Funding and M&A Report, visit: https://mercomcapital.com/product/annual-and-q4-2024-solar-funding-and-ma-report/