In the first half of 2019 (1H 2019), funding activity in the solar sector was on an upward trajectory when compared to the same period last year. Total corporate funding (including venture capital funding, public market, and debt financing) for the solar sector globally came to $6 billion in the first half of 2019. This data was revealed in Mercom Capital Group’s newly released 1H 2019 Solar Funding and M&A report.
In 1H 2019, compared to the $5.4 billion raised in 1H 2018, the global solar sector witnessed an 11% increase year-over-year (YoY). However, the number of deals was lower in 1H 2019, standing at a total of 64 deals, when compared to the 78 deals in 1H 2018.
“Financial activity was up in the first half of the year, and there is optimism in the global markets, which was reflected by climbing solar stock prices. Demand in Europe has picked up post MIP. Market activity in the U.S. is up before the ITC step down kicks in, and the duty exemption for bifacial modules has provided a much needed boost. Solar activity in India is expected to pick up post elections. However, China remains the wild card,” said Raj Prabhu, CEO of Mercom Capital Group.
Global VC (including venture capital, and private equity) funding activity in the solar sector in 1H 2019 was up by 50% with $799 million raised in 29 deals compared to the $531 million raised in 37 deals in 1H 2018.
Solar downstream companies accounted for 82% of the funding, with $655 million raised in 1H 2019. Two project developers and a rooftop installer from India accounted for almost $500 million of funding in this category according to the report.
There were three initial public offerings in 1H 2019 totaling $744 million: A Chinese project developer and an inverter company went public this year along with a UK solar-focused investment fund.
The debt financing activity in 1H 2019 totaled $4.2 billion and was 16% higher compared to 1H 2018 when $3.6 billion was financed. There were four solar securitization deals totaling $598 million in 1H 2019. Cumulatively, over $4 billion has now been raised through securitization deals since 2013.
The report tracked 37 solar M&A transactions in 1H 2019, compared to 46 transactions in 1H 2018. French oil and gas major, Total, recorded the biggest transaction when it acquired 74% of Direct Energie in Q1 2019. Oil and gas companies slowly but surely have made inroads into renewables and have acquired over 25 solar companies so far.
Project acquisition activity was slightly up in 1H 2019 with 11.6 GW of solar projects acquired compared to 11.3 GW acquired in the same period last year. Investment firms continued to be the major acquirers of solar assets and accounted for about 6.8 GW (58%) of the acquisitions.
Announced large-scale solar project funding in the first half of 2019 totaled $9 billion across 76 projects when compared to 1H 2018, which recorded $8 billion raised in 98 project funding deals.
In the first quarter (Q1) of the calendar year (CY) 2019, the Indian solar sector received investments totaling $2.8 billion (~₹195.4 billion), according to Mercom India’s Q1 2019 India Solar Market Quarterly Update.
Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.