Total corporate funding in solar sector plummets in Q1 2018 due to U.S trade war

Mercom Capital Group, llc, a global clean energy communications and consulting firm, released its report on funding and merger and acquisition (M&A) activity for the global solar sector in the first quarter of 2018. Total corporate funding (including venture capital funding, public market, and debt financing) into the solar sector in Q1 2018 fell 65 percent quarter-over-quarter (QoQ) to $2 billion from the $5.7 billion raised in Q4 2017. Year-over-year (YoY), Q1 2018 funding was 38 percent lower than the $3.2 billion raised in Q1 2017.

“After a strong fourth quarter in 2017, financial activity slowed again in Q1 2018 to the post-tariff announcement levels of last year as uncertainties and a lack of clarity in the markets took a toll on investments,” commented Raj Prabhu, CEO of Mercom Capital Group. “The bright spot during Q1 was a record-high number of solar project acquisitions, proving that solar power generation is a sought-after asset class.”

Solar Corporate Funding Q1 2017-Q1 2018

Global VC funding (venture capital, private equity, and corporate venture capital) for the solar sector fell 75 percent QoQ to $161 million in 22 deals compared to the $639 million raised in 30 deals in Q4 2017. The amount raised was also lower YoY compared to the $588 million raised in 23 deals in Q1 2017.

The majority of the VC funding raised in Q1 2018 went to solar downstream companies with $124.5 million in 18 deals.

Solar VC Funding Q1 2017-Q1 2018(1)

The top VC deals in descending order included: $55 million raised by Off Grid Electric, $25 million raised by d.light design, $23 million secured by Solaria Corporation, $12.5 million raised by Renewable Properties, $11 million raised by Kiran Energy Solar, and M-KOPA’s $10 million deal. A total of 30 VC investors participated in solar funding in Q1 2018.
Solar public market financing came to $103 million in four deals in Q1 2018, a steep decline QoQ from the $657 million raised in 10 deals in Q4 2017. It was also significantly lower YoY than Q1 2017 when $461 million was raised in 13 deals. Sky Energy had the only solar IPO in Q1 2018.

Announced debt financing totaled $1.8 billion in 17 deals during the first quarter of 2018. In a QoQ comparison, 23 deals were announced in Q4 2017 for a total of $4.4 billion. YoY, $2.2 billion was raised in 25 deals in Q1 2017. Most of the debt raised in Q1 2018 was by solar downstream companies.

Large-scale project funding announced in Q1 2018 totaled $2.7 billion in 58 deals, down from $3.7 billion in 49 deals announced in Q4 2017. In a YoY comparison, $2.6 billion was raised in 33 deals in Q1 2017.

Solar Top 5 Announced Large-Scale Projects Funded By Dollar Amount in Q1 2018

Just one residential and commercial solar fund was announced in Q1 2018 (for $400 million), compared to $213 million raised in three funds in Q4 2017. During the same quarter of last year (Q1 2017), $630 million was raised in six funds.
There were 19 solar M&A transactions announced in Q1 2018 compared to 13 transactions in Q4 2017 and 29 transactions in Q1 2017. Of the 19 total transactions in Q1 2018, 10 involved solar downstream companies.

Solar Top 5 Project Acquisitions by Dollar Amount in Q1 2018

There were 80 large-scale solar project acquisitions (16 disclosed for $1.9 billion) in Q1 2018 compared to 67 transactions (26 disclosed for $3.7 billion) in Q4 2017. In a YoY comparison, 49 transactions (18 disclosed for $1.9 billion) were announced Q1 2017. About 7.7 GW of large-scale solar projects were acquired in Q1 2018 compared to 5.8 GW acquired in Q4 2017. There were 20 investment firms and funds that acquired 24 projects in Q1 2018, totaling 1.2 GW, followed by utilities and IPPs where 13 companies picked up 30 projects totaling 1.3 GW. Twelve Project developers acquired 14 projects for 3.4 GW during the quarter.

— Solar Builder magazine

Mercom: Strong Q4 pushes overall solar funding higher in 2017

The year-end solar installation reports for the U.S. were a bit of a downer, but private funding in solar across the globe is up year over year, according to Mercom Capital Group’s 2017 Q4 and annual report on funding and merger and acquisition (M&A) activity for the solar sector. Total global corporate funding into the solar sector, including venture capital/private equity (VC), debt financing, and public market financing came to $12.8 billion (B), compared to $9.1B raised in 2016.

“A strong fourth quarter pushed overall funding higher in 2017. Higher installation levels around the world, the lack of threat to the solar investment tax credit, lower than expected tariff recommendation by U.S. ITC, strong debt financing activity, and over a billion dollars in securitization deals helped the solar industry have a much better year in terms of financial activity compared to 2016. After several challenging years, most of the solar securities were up in 2017 reflecting overall positive sentiments around the solar industry even as several Chinese manufacturers decided to go private. Of course, all this could change swiftly if President Trump decides to impose higher tariffs in the trade case,” commented Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.

View the full report here.

Solar VC Funding 2017

Global VC investments came to $1.6B in 99 deals in 2017, up from $1.3B in 78 deals in 2016.
Solar downstream companies accounted for $1.4B in 2017. Thin-film companies raised $106 million (M), service providers raised $47M, PV technology companies raised $40M, Balance of Systems (BoS) companies raised $36M, concentrated solar power companies raised $8M and concentrator photovoltaics companies received $6M.

Mercom solar corporate funding

The top VC/PE deals reported in 2017 were all over $100M. Five of the top six VC funding deals came from India. 162 VC/PE investors participated in funding rounds in 2017, eight with multiple rounds: Engie, Avista Development, DSM Venturing, InnoEnergy, Innogy, International Finance Corporation, Shell, and Techstars.

Public market financing in 2017 reached $1.7B in 33 deals. Three IPOs were logged in 2017 for $363M: Canadian Solar Infrastructure Fund, New Energy Solar Fund, and Clenergy. Debt financing totaled $9.5B in 2017. There were six securitization deals in 2017 totaling $1.3B. For the first time, securitization deals surpassed $1B.

Solar Top 5 M&A Transactions in 2017

Announced large-scale project funding in 2017 reached $14B in 167 deals, compared to $9.4B in 133 deals during 2016.

A total of 161 investors funded about 20.5 GW of large-scale solar projects in 2017 compared to 5.9 GW funded by 153 investors in 2016. The top investors in large-scale projects included Clean Energy Finance Corporation (CEFC), Santander, Commonwealth Bank of Australia, and Siemens Financial Services.

$2.4B was raised by 16 residential and commercial solar project funds in 2017, compared to $4.9B by 30 funds in 2016. Since 2009, solar residential and commercial funds raised more than $24.8 billion.
There were 71 corporate M&A transactions in 2017, solar downstream companies accounted for 51. The largest was the $1.6B acquisition of FTP Power (sPower).

There was a record 228 large-scale solar project acquisitions in 2017 for more than 20.4 GW.
Mercom tracked 922 large-scale project announcements world-wide totaling 50.1 GW in 2017.

— Solar Builder magazine

Mercom: Strong Q4 pushes overall solar funding higher in 2017

The year-end solar installation reports for the U.S. were a bit of a downer, but private funding in solar across the globe is up year over year, according to Mercom Capital Group’s 2017 Q4 and annual report on funding and merger and acquisition (M&A) activity for the solar sector. Total global corporate funding into the solar sector, including venture capital/private equity (VC), debt financing, and public market financing came to $12.8 billion (B), compared to $9.1B raised in 2016.

“A strong fourth quarter pushed overall funding higher in 2017. Higher installation levels around the world, the lack of threat to the solar investment tax credit, lower than expected tariff recommendation by U.S. ITC, strong debt financing activity, and over a billion dollars in securitization deals helped the solar industry have a much better year in terms of financial activity compared to 2016. After several challenging years, most of the solar securities were up in 2017 reflecting overall positive sentiments around the solar industry even as several Chinese manufacturers decided to go private. Of course, all this could change swiftly if President Trump decides to impose higher tariffs in the trade case,” commented Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.

View the full report here.

Solar VC Funding 2017

Global VC investments came to $1.6B in 99 deals in 2017, up from $1.3B in 78 deals in 2016.
Solar downstream companies accounted for $1.4B in 2017. Thin-film companies raised $106 million (M), service providers raised $47M, PV technology companies raised $40M, Balance of Systems (BoS) companies raised $36M, concentrated solar power companies raised $8M and concentrator photovoltaics companies received $6M.

Mercom solar corporate funding

The top VC/PE deals reported in 2017 were all over $100M. Five of the top six VC funding deals came from India. 162 VC/PE investors participated in funding rounds in 2017, eight with multiple rounds: Engie, Avista Development, DSM Venturing, InnoEnergy, Innogy, International Finance Corporation, Shell, and Techstars.

Public market financing in 2017 reached $1.7B in 33 deals. Three IPOs were logged in 2017 for $363M: Canadian Solar Infrastructure Fund, New Energy Solar Fund, and Clenergy. Debt financing totaled $9.5B in 2017. There were six securitization deals in 2017 totaling $1.3B. For the first time, securitization deals surpassed $1B.

Solar Top 5 M&A Transactions in 2017

Announced large-scale project funding in 2017 reached $14B in 167 deals, compared to $9.4B in 133 deals during 2016.

A total of 161 investors funded about 20.5 GW of large-scale solar projects in 2017 compared to 5.9 GW funded by 153 investors in 2016. The top investors in large-scale projects included Clean Energy Finance Corporation (CEFC), Santander, Commonwealth Bank of Australia, and Siemens Financial Services.

$2.4B was raised by 16 residential and commercial solar project funds in 2017, compared to $4.9B by 30 funds in 2016. Since 2009, solar residential and commercial funds raised more than $24.8 billion.
There were 71 corporate M&A transactions in 2017, solar downstream companies accounted for 51. The largest was the $1.6B acquisition of FTP Power (sPower).

There was a record 228 large-scale solar project acquisitions in 2017 for more than 20.4 GW.
Mercom tracked 922 large-scale project announcements world-wide totaling 50.1 GW in 2017.

— Solar Builder magazine

Mercom Capital Group: Top 5 Global PV projects funded in Q2 2017

Solar_Top_5_Announced_Large-Scale_Projects_Funded_By_Dollar_Amount_in_Q2_2017

1. JinkoSolar, Marubeni Corporation, Abu Dhabi Water and Electricity Authority ReNew Power secured a $870 million financing package in financial agreements with a syndicate of international and local banks for the debt and equity funding of the 1,177 MW Sweihan independent solar power project in the Eastern Region of the Emirate of Abu Dhabi.

2. Masdar, EDF Energies Nouvelles, Dubai Electricity and Water Authority obtained $655 million in financing for the 800 MW Phase 3 Mohammed bin Rashid Al Maktoum solar project in Dubai from a set of seven different institutions including: Union National Bank, Islamic Development Bank, Arab Petroleum Investments Corporation (APICORP), Natixis, Siemens Financial Services, the Korea Development Bank, and Export Development Canada (EDC).

3. Octupus Investment, secured £485 million (~$621 million) as a nonrecourse portfolio financing to refinance a portfolio of 74 ground-mounted solar PV projects totaling 522 MW in the UK from six banks including: Banca IMI, Barclays, BNP Paribas, La Caixa, Royal Bank of Scotland, and Santander Global Corporate Banking.

4. The European Bank for Reconstruction and Development (EBRD) board approved a $500 million framework under the Egyptian government’s FiT program to finance 13 projects under the framework with a further three scheduled for board discussion. These 16 projects to be constructed on one large site near the village of Benban in Upper Egypt will deliver 750 MW of solar PV capacity.

5. Saeta Yield, a Spanish yieldco, secured €200 million (~$224 million) in refinancing from a syndicate of banks led by Banco Sabadell for the 49.9 MW Manchasol 2 thermal solar project in Alcazar de San Juan, Ciudad Real, Spain. The syndicate is comprised of: Banco Sabadell, Banco Santander, BNP Paribas, Credit Agricole Corporate and Investment Bank, and Societe Generale together with several investment funds.

16 community solar projects across Massachusetts being financed by Key Equipment Finance

— Solar Builder magazine

Solar market uncertainty: Funding activity down in Q1 2017

Mercom Capital Group LLC, a global clean energy communications and consulting firm, released its report on funding and merger and acquisition (M&A) activity for the solar sector in the second quarter of 2017 and first half of 2017.

Total corporate funding (including venture capital funding, public market and debt financing) in the first half (1H) of 2017 was slightly up compared to the same period in 2016 with about $4.6 billion raised compared to the $4.5 billion raised in 1H 2016. There were 97 deals in 1H 2017 compared to the 79 deals in 1H 2016.

Solar_Corporate_Funding_1H_2013-1H_2017

Corporate funding in the solar sector fell in Q2 with $1.4 billion raised in 37 deals compared to the $3.2 billion raised in 60 deals in Q1 2017. Year-over-year (YoY) funding in Q2 2017 was about 17 percent lower compared to the $1.7 billion raised in Q2 2016.

“There is a great deal of uncertainty in the solar markets right now, which is reflected in funding activity. However, solar public companies, especially on the U.S. stock markets, have done well this year. A lot is riding on how the Suniva anti-dumping case plays out as it will dictate market dynamics going forward,” commented Raj Prabhu, CEO of Mercom Capital Group.

Global VC funding (venture capital, private equity, and corporate venture capital) for the solar sector in 1H 2017 was 23 percent higher with $713 million compared to the $579 million raised in 1H 2016, largely due to a strong first quarter in 2017.

Solar_VC_Funding_1H_2013-1H_2017

In Q2 2017, VC funding for the solar sector saw a steep decline with $128 million in 23 deals compared to $585 million in 22 deals in Q1 2017. Most of the VC funding in Q2 2017 went to solar downstream companies (72 percent); $92 million was raised in 15 deals.

Top VC deals in 1H 2017 included the $200 million raised by ReNew Power Ventures followed by the $155 million raised by Greenko Energy Holdings, the $125 million secured by Hero Future Energies, Silicon Ranch’s $55 million, $25 million raise by Siva Power and the $25 million raise by Spruce Finance. A total of 55 investors participated in solar funding in 1H 2017.

Solar public market funding was much higher in 1H 2017 compared to the first half of 2016 with $934 million raised compared to $276 million in 1H 2016. Public market financing was slightly up in Q2 2017 with $473 million raised in six deals compared to the $461 million in 13 deals in Q1 2017.

Here was New York’s pro-renewables response after Trump pulled out of Paris Agreement

Announced debt financing in 1H 2017 came to $3 billion compared to $3.7 billion in 1H 2016. In Q2 2017, announced debt financing fell to $798 million in eight deals compared to $2.2 billion in 25 deals in Q1 2017. There was one securitization deal in Q2 2017 by Sunnova which raised $255 million.

Announced large-scale project funding in 1H 2017 came to $7.4 billion in 81 projects. In Q2 2017, announced large-scale project funding came in at $4.8 billion in 48 deals.

Solar_Top_5_Announced_Large-Scale_Projects_Funded_By_Dollar_Amount_in_Q2_2017

Announced residential and commercial solar funds totaled $1.8 billion in 1H 2017 compared to $2.3 billion in the same period of 2016.

In 1H 2017 there were a total of 40 M&A transactions, compared to 30 in the same period of 2016. There were 11 solar M&A transactions in Q2 2017 compared to 29 solar M&A transactions in Q1 2017 and 16 transactions in Q2 2016. Of the 11 total transactions in Q2, eight involved solar downstream companies, two involved PV manufacturers, and one transaction was by a BOS company.

There were 100 large-scale project acquisitions in 1H 2017 totaling 10.6 MW, compared to 90 project acquisitions totaling 4.5 GW in the first half of 2016.

Solar_Top_5_Project_Acquisitions_by_Megawatts_in_Q2_2017(1)

Investment firms and funds were the most active acquirers in 1H 2017, picking up 37 projects totaling 4.2 GW, followed by project developers with 17 transactions for 4.6 GW.
Mercom tracked 206 new large-scale project announcements worldwide in Q2 2017 totaling 11.1 GW.

— Solar Builder magazine