Corporate funding in the solar sector has dropped 23 percent to $22.3 billion in the first nine months of 2024 from $28.9 billion during the same period in 2023.
Total funding includes venture capital (VC), public market, and debt financing.
The number of deals fell by 6 percent to 117 deals compared to 124 in 2023, Mercom Capital Group, a research firm focused on clean energy markets, said in its report.
Raj Prabhu, CEO of Mercom Capital Group, attributed the decline to a range of uncertainties affecting the solar industry.
These include regulatory challenges, such as antidumping and countervailing duties, the U.S. Section 45X guidance, potential policy shifts due to elections, global trade volatility, supply chain issues, and higher costs. Additionally, labor shortages and project delays have further dampened investor confidence.
VC Funding: VC financing dropped by 39 percent, with $3.5 billion raised in 39 deals compared to $5.7 billion across 51 deals in 9M 2023. Solar downstream companies led financing with 32 deals worth $3.3 billion.
Top VC Deals: The top VC-funded companies in 2024 included Pine Gate Renewables ($650 million), Nexamp ($520 million), BrightNight ($440 million), Doral Renewables ($400 million), and MN8 Energy ($325 million). A total of 118 VC investors participated in solar funding.
Public Market Financing: Public market funding fell sharply, down 71 percent, raising $2.1 billion in 10 deals compared to $7.2 billion in 19 deals in 2023.
Debt Financing: Debt financing activity remained relatively stable, totaling $16.7 billion in 68 deals, a 4 percent increase from 2023.
Securitization: Securitization deals in 9M 2024 amounted to $3.8 billion across 12 deals, a 19 percent increase compared to 2023.
Solar M&A and Project Acquisitions
Solar mergers and acquisitions (M&A) also slowed, with 62 transactions in 9M 2024 compared to 75 in the previous year. The largest deal in the third quarter involved Macquarie Asset Management acquiring a minority stake in D.E. Shaw Renewable Investments.
In terms of project acquisitions, 166 solar project deals totaling 28.3 GW were transacted in 9M 2024, slightly lower than the 31.6 GW in 2023. Investment firms were the most active acquirers, securing 4.3 GW of solar projects, followed by project developers and independent power producers (IPPs).