Solar funding drops 25% to $4.5 billion in first half

Solar industry corporate funding H1 2020

Total corporate funding in the solar sector in the first half of 2020 decreased 25 percent to $4.5 billion compared to $6 billion in 1H 2019, a research report from Mercom Capital Group indicated.

In 1H 2020, global VC funding (venture capital, private equity, and corporate venture capital) in the solar sector was 74 percent lower with $210 million compared to $799 million raised in the first half of 2019.

The top VC/PE deals in 1H 2020 included: $72 million raised by Sunseap Group, $50 million raised by Zero Mass Water, $37 million raised by Sunseap Group (second deal), and $21 million raised by Today’s Power.

Solar public market financing in 1H 2020 was 24 percent lower compared to the first half of 2019, with $758 million in six deals compared to $993 million in eight deals in 1H 2019. Public market financing totaled $737 million in five deals in Q2 2020 compared to $22 million in one deal in Q1 2020, and $746 million in five deals in Q2 2019.

Announced debt financing activity in the first half of 2020 ($3.6 billion in 15 deals) was 16 percent lower compared to the first half of 2019 when $4.2 billion was raised in 27 deals.

There were four solar securitization deals totaling $1.06 billion in 1H 2020. Cumulatively, $6.3 billion has been raised through securitization deals since 2013.

In 1H 2020 there were 25 solar corporate M&A transactions compared to 37 transactions in 1H 2019.

The top transaction in the first half of 2020 was the divestment of Brookfield Renewable Partners’ Thailand-based solar energy business, which was sold to PTT Public Company’s power and energy arm, Global Power Synergy Public Company, for $100 million.

There were 13 solar M&A transactions in Q2 2020 compared to 12 in Q1 2020 and 19 transactions in Q2 2019. Of the 13 transactions in Q2 2020, 11 involved Solar Downstream companies. Solar PV Manufacturers and Balance of System companies were each involved in one transaction.

Solar project acquisition activity was up in 1H 2020 with 14.7 GW compared to 11.6 GW acquired in the same period last year. Only about 3 GW of solar projects were acquired in Q2 2020 compared to 5.7 GW in Q2 2019. Oil and gas majors were the major acquirers of solar assets in 1H 2020 and accounted for about 6.5 GW (45 percent) of acquisitions followed by investment firms with 6.1 GW (41 percent).