Mercom Capital: Total corporate funding in solar sector dropped by 64 percent in 2016

Solar corporate funding 2010–2016
Solar corporate funding 2010–2016

Mercom Capital Group, LLC (Austin, Texas, U.S.) on January 10th, 2017 released its report on funding and merger and acquisition (M&A) activity for the solar sector in 2016.

Total global corporate funding in the solar sector, including venture capital/private equity (VC), debt financing, and public market financing, raised by public companies came to USD 9.1 billion, compared to USD 25.3 billion in 2015, a 64 percent drop.

“It was a challenging year for solar companies in terms of fundraising even as demand is expected to reach an all-time high,” commented 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,” he added.

Global VC investments came to USD 1.25 billion in 77 deals in 2016, compared to USD 1.1 billion in 83 deals in 2015.

 

Top VC deals by Sunnova Energy, Solar Mosaic

Solar downstream companies accounted for 80 percent of the VC funding in 2016, with USD 985 million of the USD 1.3 billion raised. Investments in PV technology companies came to USD 97 million and thin-film companies brought in USD 95 million.

Balance of Systems (BoS) companies raised USD 37 million. Service providers raised USD 24 million. In one deal each, the CPV category raised USD 10 million and the CSP category raised USD 2.3 million.

Among the Top VC deals in 2016, the largest was the USD 300 million raised by Sunnova Energy, followed by the USD 220 million raised by Solar Mosaic. Origis Energy and Silicon Ranch each raised USD 100 million.

 

Three IPOs which brought in USD 230 million

Public market financing was lower in 2016 with USD 1.8 billion in 27 deals, compared to the 2015 record of USD 6 billion in 38 deals. There were three IPOs which brought in USD 230 million – they were BCPG (a subsidiary of Bangchak Petroleum), Azure Power, and Ripasso Energy.

Debt financing in 2016 totaled USD 6 billion compared to the USD 18.3 billion in 2015. There were three securitization deals in 2016 totaling USD 387 million. SolarCity raised a total of USD 234.6 million in two securitization deals and Shenzhen Energy had one securitization deal for USD 152 million.

Announced large-scale project funding in 2016 came to USD 9.4 billion in 133 deals this year, compared to 2015 with USD 11.6 billion in 124 deals. A total of 153 investors funded about 5.9 GW of large-scale solar projects in 2016.

There was a total of USD 4.9 billion raised in 30 residential and commercial solar project funds in 2016 compared to USD 5.7 billion raised in 24 funds in 2015. SolarCity, Sunrun, Solar Mosaic, Spruce Finance, and Tabuchi Electric were the top fundraisers in 2016.

 

68 corporate M&A transactions in the solar sector

There were 68 corporate M&A transactions in the solar sector in 2016 compared to 81 transactions in 2015. Solar downstream companies were involved in 38 of these transactions. BayWa r.e., DNV GL, Golden Concord Holdings, and Voltalia acquired two companies each. The largest and the most notable transaction in 2016 was the USD 2.1 billion acquisition of SolarCity by Tesla Motors.

There were a record 218 large-scale solar project acquisitions for more than 12.2 GW, compared to 2015 when 12.7 GW changed hands in 204 transactions.

Mercom also tracked 133 large-scale project announcements worldwide in Q4, 2016 totaling 5.8 GW and 826 project announcements totaling 40.4 GW for all of 2016.

 

2017-01-11 | Courtesy: Mercom Capital Group | solarserver.com © Heindl Server GmbH

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