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					</table>The global energy storage sector witnessed a 432% increase year-over-year (YoY) in corporate funding, totaling $11.7 billion across 29 transactions, from $2.2 billion in 27 deals.
The findings were published in Mercom Capital&#8217;s recently released <a href="https://mercomcapital.com/product/q1-2024-funding-ma-report-storage-grid/" target="_blank" rel="noopener">Q1 2024 Funding and M&amp;A Report for Storage and Grid</a>.
Compared to Q4 2023, funding surged by 216%, surpassing the $3.7 billion raised in 26 deals.
Raj Prabhu, CEO and Co-Founder of Mercom Capital Group, said, &#8220;Two significant debt deals skewed the numbers higher this quarter. Yet, when we exclude these transactions, the figures are similar to Q1 2023.&#8221;
Notably, <a href="https://northvolt.com/" target="_blank" rel="noopener">Northvolt</a>&#8216;s $5 billion debt financing and <a href="https://www.acc-emotion.com/" target="_blank" rel="noopener">Automotive Cells Company</a>&#8216;s $4.7 billion debt funding constituted 83% of the corporate financing in Q1 2024.
<img loading="lazy" decoding="async" class="aligncenter wp-image-65577 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Picture1-7.png" alt="" width="1704" height="1277" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Picture1-7.png 1704w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Picture1-7-300x225.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Picture1-7-768x576.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Picture1-7-1536x1151.png 1536w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Picture1-7-650x487.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Picture1-7-624x468.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Picture1-7-600x450.png 600w" sizes="(max-width: 1704px) 100vw, 1704px" />
Prabhu noted an interesting trend in the context of venture capital (VC) funding. He said, &#8220;VC funding in the solar and storage sector revealed a significant disparity, with solar receiving half of what energy storage companies garnered. Despite challenging macroeconomic conditions, VC investment is flowing into technologies within the energy storage sector, which holds enormous potential.&#8221;
&#8220;Storage appears to be at a stage akin to where solar stood 8-10 years ago in terms of investment into technologies, while VCs have shifted focus towards downstream companies in solar as the sector has matured,&#8221; Prabhu added.
VC funding for energy storage companies experienced a 9% YoY increase, totaling $1.2 billion across 23 transactions in Q1 2024, compared to $1.1 billion raised in 19 deals.
Quarter-over-quarter (QoQ), the funding was up 92% from $625 million in 18 deals. The sector continues to attract investments driven by various incentives from the Inflation Reduction Act (IRA) for energy storage.
Prabhu said, &#8220;Undoubtedly, the IRA has significantly driven the energy sector. Initially, incentives were limited to the 30% investment tax credit for solar plus storage projects. However, now it extends to standalone storage, making it extremely appealing.&#8221;
He also cited California&#8217;s &#8220;Net Metering 3.0 program&#8221; as a catalyst that incentivizes battery storage installations, which offer better returns when combined with solar.
Among the top five VC funding deals were Natron Energy, which secured $189 million; Ascend Elements, which raised $162 million; Antora Energy, which received $150 million; Lilac Solutions, which raised $145 million; and Lightshift Energy, which raised $100 million.
<img loading="lazy" decoding="async" class="aligncenter wp-image-65579 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Screenshot-2024-04-26-101343.png" alt="" width="637" height="485" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Screenshot-2024-04-26-101343.png 637w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Screenshot-2024-04-26-101343-300x228.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Screenshot-2024-04-26-101343-624x475.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Screenshot-2024-04-26-101343-600x457.png 600w" sizes="(max-width: 637px) 100vw, 637px" />
During Q1 2024, debt and public market financing announcements in the energy storage sector reached $10.5 billion across six deals, primarily fueled by Northvolt and ACC debt funding arrangements.
This marks an 855% increase compared to Q1 2023 when $1.1 billion was raised in eight deals.
Citing other reasons for propelling growth and investment in the sector, Prabhu said, &#8220;Moreover, battery recycling is gaining momentum as the IRA also drives investments in this area.&#8221;
In terms of technology, lithium, although a longstanding player in the battery industry, is witnessing a surge in innovation aimed at enhancing its efficiency and stability.
The Mercom Capital CEO explained, &#8220;Although lithium-ion batteries dominate a large segment of the market, they have their challenges. Alternative energy storage technologies continue to receive funding.&#8221;
The Mergers &amp; Acquisition (M&amp;A) activity in the energy storage sector also surged in Q1, with eight transactions recorded, doubling from the four M&amp;A deals in Q1 2023. However, energy storage project M&amp;A deals saw a 50% decline, with six transactions in Q1 2024 compared to 12 during the same period last year.
&#8220;Compared to solar, M&amp;A deals in the energy sector aren&#8217;t as robust due to higher cost of capital, and it will be interesting to monitor how this trend evolves,&#8221; commented Prabhu.
Smart Grid 
In Q1 2024, corporate funding in the smart grid sector amounted to $686 million across 14 deals. This marks a decrease compared to the $1.1 billion raised in 18 deals in Q1 2023 and an increase from the $314 million raised in 12 deals in Q4 2023.
<img loading="lazy" decoding="async" class="aligncenter wp-image-65580 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Picture2-3.png" alt="" width="1829" height="1263" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Picture2-3.png 1829w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Picture2-3-300x207.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Picture2-3-768x530.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Picture2-3-1536x1061.png 1536w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Picture2-3-650x449.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Picture2-3-624x431.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Picture2-3-600x414.png 600w" sizes="(max-width: 1829px) 100vw, 1829px" />
During the quarter, VC funding for smart grid companies increased by 134%, with $656 million raised across 12 deals, compared to $280 million raised in 14 deals in Q1 2023.
In a QoQ analysis, funding surged 197% compared to $221 million raised in 20 deals during Q4 2023.
A substantial portion of the funding in Q1 2024 was allocated to smart charging companies.
Prabhu said, &#8220;The catalyst for this surge in activity is again the IRA, which provides substantial incentives for EVs. For instance, purchasing an EV can yield a $7,500 rebate in the U.S.&#8221;
However, pointing towards the lag of charging infrastructure, Prabhu believes that we must address the infrastructure gap to truly bolster EV demand.
&#8220;Presently, we lag significantly behind, with one charging station for every 15 gas stations, according to a report. Nonetheless, there is a flurry of innovation underway to bridge this gap.&#8221;
In Q1 2024, the top five VC funding deals in the Smart Grid sector were as follows: Electra secured $330 million, Powerdot received $108 million, Monta obtained $87 million, Trojan Energy secured $33 million, and BluSmart raised $25 million.
<img loading="lazy" decoding="async" class="aligncenter wp-image-65582 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Screenshot-2024-04-26-101622.png" alt="" width="557" height="542" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Screenshot-2024-04-26-101622.png 557w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/04/Screenshot-2024-04-26-101622-300x292.png 300w" sizes="(max-width: 557px) 100vw, 557px" />
Public market financing in Q1 2024 amounted to $30 million across two deals, contrasting with four deals totaling $777 million in Q1 2023.
Regarding corporate M&amp;A activity, there was a single transaction in Q1 2024 compared to four transactions in Q1 2023.
Prabhu noted, &#8220;Around two to three months ago, projections suggested that the Federal Reserve would lower interest rates, suggesting a market recovery in Q2 or the first half of the year. However, the current high inflation rates may delay market recovery. We are closely monitoring how this could impact the investment landscape.&#8221;
Mercom Capital Group&#8217;s Energy Storage and Smart Grid Funding and M&amp;A Report covers 234 companies and investors. It is 88 pages long and contains 64 charts, graphs, and tables.
To get a copy of the report, visit: <a href="https://mercomcapital.com/product/q1-2024-funding-ma-report-storage-grid/" target="_blank" rel="noopener">https://mercomcapital.com/product/q1-2024-funding-ma-report-storage-grid/</a>

Corporate Funding in Energy Storage Sector Surges Five-Fold to $11.7 Billion in Q1

Rooftop solar solution provider <a href="https://www.itsmysun.com/" target="_blank" rel="noopener">MYSUN</a> has joined hands with Tata Cleantech Capital Ltd (<a href="https://www.tatacapital.com/tccl.html" target="_blank" rel="noopener">TCCL</a>) to raise ₹150 million (~$2 million) in debt funding.
Tata Cleantech Capital is a joint venture between Tata Capital Limited and International Finance Corporation.
Recently, MYSUN had launched its solar asset vehicle MYSUN+ with an aim to develop solar projects under the distributed and open access models by infusing ₹6 billion (~$80.12 million) in the initial phase.
The term loan will be put to use to fund the existing projects of MYSUN+, while the credit line will be pumped into building the projects in the pipeline.
Commenting on MYSUN&#8217;s growth story, which has a presence in nine Indian states, including Rajasthan, Maharashtra, Uttar Pradesh, Gujarat, Madhya Pradesh, Andhra Pradesh, and the National Capital Region, Gagan Vermani, the Founder and CEO of MYSUN, said, &#8220;We have got a very promising traction in our newly launched asset vehicle MYSUN+, and this funding from TCCL will help us de-leverage our equity capital and develop a larger pipeline of projects.&#8221;
The company is looking to develop about 200 MW of projects over the next few quarters, which are currently at various stages of development.
Vermani added that despite the global pandemic, the firm has been witnessing a strong demand for clean and affordable solar power. The firm said it has expanded its business to cater to commercial and industrial customers, smaller businesses, and even residential consumers.
The firm is mulling foraying into electric vehicle charging and some newer product lines.
MYSUN+ has also partnered with some large corporates in India to assist in their solarization plans.
Meanwhile, TCCL had partnered with Green Climate Fund (<a href="https://www.greenclimate.fund/" target="_blank" rel="noopener">GCF</a>) to develop its rooftop solar portfolio through a $100 million credit line. This term loan and credit line raised by MYSUN is a part of this GCF facility.
GCF, the world&#8217;s largest dedicated fund for climate action, had <a href="https://mercomindia.com/gcf-1-billion-developing-countries-climate-change/" target="_blank" rel="noopener">approved</a> more than $1 billion funding for new projects and programs to help mitigate climate change in developing countries back in 2018.
In January this year, U.K.&#8217;s development finance institution and impact investor <a href="https://www.cdcgroup.com/en/" target="_blank" rel="noopener">CDC Group</a> <a href="https://mercomindia.com/cdc-30-million-green-lending-to-tata/" target="_blank" rel="noopener">announced</a> a $30 million facility to Tata Cleantech Capital through CDC&#8217;s directed green lending facility.
Commenting on the latest deal, Manish Chourasia, Managing Director of Tata Cleantech Capital, said, &#8220;TCCL has an active solar rooftop funding program, which aims to mainstream financing in this segment. We are already assisting multiple entities in the adoption of rooftop solar systems. Our partnership with MYSUN gives us the opportunity to further accelerate India&#8217;s energy transition. Rooftop solar represents only 11% of total solar installation in India, which is significantly lower than the targeted 40% share, and TCCL aims to bridge the gap to decarbonize energy consumption.&#8221;
In March 2020, MYSUN <a href="https://mercomcapital.com/research/" target="_blank" rel="noopener">raised</a> ₹320 million (~$4.2 million) from its existing investors as part of its pre-series A round.
According to Mercom&#8217;s recently published <a href="https://mercomcapital.com/product/1h-q2-2021-solar-funding-ma-report/" target="_blank" rel="noopener">1H and Q2 2021 Solar Funding and M&amp;A Report</a>, announced debt financing activity in 1H 2021 ($8.2 billion in 32 deals) was 125% higher compared to the first half of 2020, when $3.7 billion was raised in 17 deals. Spurred by low interest rates, a record $2 billion was raised through seven securitization deals in 1H 2021. Cumulatively, over $9 billion has been raised through securitization deals since 2013.

Distributed Solar Company MYSUN Raises ₹150 Million from Tata Cleantech Capital

<a href="https://renewpower.in/">ReNew Power</a> has secured fresh debt financing of up to $350 million (~₹24.91 billion) from the Overseas Private Investment Corporation (OPIC).
The funds will be utilized by ReNew Power to support the construction of new wind and solar power projects in India.
<a href="https://mercomindia.com/opic-renew-power-commit-74-million-set-100-mw-solar-project-telangana/" target="_blank" rel="noopener">In March 2016,</a> Mercom had reported about ReNew Power signing an <a href="http://renewpower.in/wp-content/uploads/2016/03/ReNew-Press-Release-OPIC_RS_3-21-16.pdf" target="_blank" rel="noopener">agreement</a> with OPIC to receive debt financing of up to $250 million as part of the ReNew Master Financing Facility. <a href="https://mercomindia.com/opic-renew-power-commit-74-million-set-100-mw-solar-project-telangana/" target="_blank" rel="noopener">In November 2016</a>, both the parties signed a <a href="https://www.opic.gov/press-releases/2016/opic-and-renew-power-ventures-sign-commitment-100-megawatt-solar-farm-india" target="_blank" rel="noopener">commitment</a> of approximately $74 million to set up a 100 MW solar project in Telangana. The project was the first to be approved under this facility to develop, construct, and operate solar projects under the National Solar Mission (NSM). Under the ReNew Master Financing Facility, up to 400 MW of solar projects would be constructed in India across multiple states.
“We are happy that OPIC has once again reposed their trust in <a href="https://renewpower.in/" target="_blank" rel="noopener">ReNew Power</a> and our vision to transform India’s energy landscape. This fresh round of debt funding from OPIC is a validation of ReNew Power’s strong performance as a provider of clean, affordable energy in India,” said Sumant Sinha, Chairman and Managing Director, ReNew Power.
Ray W. Washburne, President and CEO of OPIC said, “Investment in new and reliable energy will help India diversify its power generation, which is critical in order to meet growing energy demand and sustain economic growth. OPIC looks forward to continuing its partnership with ReNew Power and supporting its commitment to advancing economic development throughout the Indo- Pacific.”
OPIC is the U.S. government’s development finance institution.
<a href="https://mercomindia.com/opic-600-million-crossboundary-africa/" target="_blank" rel="noopener">Recently</a>, the institution provided 600 million shillings (~$5.86 million) to CrossBoundary Energy, a Nairobi-based company which funds commercial and industrial solar in East Africa.
Prior to this, <a href="https://mercomindia.com/opic-commits-25-million-off-grid-solar-asia-africa/" target="_blank" rel="noopener">in September 2018</a>, OPIC committed $25 million in financing to the Solar Energy Transformation Fund LLC, aimed at providing loans to companies developing off-grid solar products and solutions for the millions of people in Sub Saharan Africa and Asia who lack access to electricity.
<a href="https://mercomindia.com/opic-loan-5-million-grameen-impact/" target="_blank" rel="noopener">In June 2018</a>, OPIC signed a $5 million loan guarantee with India’s IndusInd Bank. The guarantee was to support Grameen Impact, a non-bank financial institution backed by Grameen Capital India in its focus on the growth of local small and medium enterprises.

ReNew Power Gets $350 Million in Debt Financing from OPIC to Scale Solar and Wind Projects

debt-funding

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