Total global corporate funding in the solar sector came in at $6.3 billion during the second quarter of this year (Q2'14), compared to $7 billion in Q1'14, according to a new report from Mercom Capital Group. That includes venture capital (VC), private equity (PE), debt financing, and public market financing raised by public companies. The report notes that the second quarter also saw two initial public offerings, including one yieldco and a securitization deal.
‘It was a solid quarter for the solar sector in terms of fundraising," comments Raj Prabhu, CEO of Mercom Capital Group." VC funding was up, public markets remained strong, and we are seeing new and innovative financial structures. Residential/commercial solar funds continue to raise record amounts."
The report says global VC funding, including PE and corporate VC, in Q2'14 totaled $432 million in 21 deals, up from $251 million in 26 deals in Q1'14, mostly due to three large deals. Solar downstream companies attracted most of the VC funding in the quarter, with $388 million in 10 deals.
According to the report, the largest VC/PE deal in Q2'14 was the $150 million raised by Sunrun, a provider of residential solar power systems. Investors included Foundation Capital, Accel Partners, Sequoia Capital, Madrone Capital and others. Sunnova Energy, a provider of residential solar services, raised $145 million. Other Top 5 deals included the $72.5 million raised by residential solar installer Sungevity, followed by Siva Power (formerly Solexant), a manufacturer of CIGS solar modules, which raised $15 million. Brite Energy Solar, a provider of residential and commercial solar services, raised $14.2 million.
The report says there were 33 large-scale project funding deals totaling $3.5 billion announced in Q2'14. The Top 5 large-scale project funding deals in the quarter included the following: the $820 million raised by Megalim Solar Power for a 121 MW CSP project in Israel; Tenaska's $450 million raised for the development of the 150 MW Tenaska Imperial Center West solar project in California; the $290 million raised by First Solar for its 141 MW Luz del Norte solar project in Chile; the $190 million raised by SunEdison for the 72.8 MW Maria Elena solar project in Chile; and the $142 million raised by Abengoa for its 100 MW XiNa Solar One CSP project in South Africa.
Third-party residential and commercial solar funds continued to attract significant attention, with more than $1.3 billion raised in Q2'14, the report continues. SunPower topped the list, raising $492 million in three different funds; investors included Google, Admirals Bank and Hannon Armstrong Sustainable Infrastructure Capital.
The report says there were 25 corporate mergers and acquisitions (M&A) transactions in the solar sector in Q2'14, down from 38 transactions in Q1'14. Solar downstream companies were involved in most of the M&A transactions.
According to the report, the largest disclosed M&A transaction by dollar amount was the $350 million acquisition of Silevo, a solar cell and PV module manufacturer, by SolarCity. This was followed by the $29 million acquisition of Zhejiang Ruixu Investment Co., a solar project development company and wholly owned unit of ReneSola, by Jiangsu Akcome Solar Science & Technology Co.
Jun Yang Solar Power Investments, an independent power producer, acquired the remaining 32.1% of Jun Yang Holdings, from Sun Reliant International, a wholly owned subsidiary of Hanergy Solar, for $14 million. RBI Solar, a provider of solar mounting systems, acquired Renusol, a subsidiary of CENTROSOLAR Group, for $3.5 million.
Rounding out the Top 5 was the $2.2 million acquisition by Jinzhou Yangguang Energy, a wholly owned unit of Solargiga Energy, of an additional 10% stake in PV module manufacturer Jinzhou Jinmao Photovoltaic Technology from Kinmac Holding, raising its stake to 96%.
The report says project acquisitions in Q2'14 totaled $229 million in 34 transactions, with 1.1 GW changing hands. The top disclosed project acquisition by dollar amount was Foresight Solar Fund Ltd.'s acquisition of SunEdison's 17.8 MW Castle Eaton solar project in Castle Eaton, U.K., for $37.6 million.
This was followed by the sale of the 19.5 MW Great Glemham solar project in Suffolk, U.K., by BayWa to Allianz Renewable Energy Fund, an Allianz Capital Partners fund, for $35.7 million. Bluefield Solar Income Fund, an investment company focusing on large-scale agricultural and industrial solar assets, acquired the 17.5 MW Hertfordshire solar projects from Solarcentury for $32.5 million, and ContourGlobal, an independent power producer, acquired a 5 MW solar portfolio in Italy from Sorgenia Solar for $27.5 million.
Rounding out the Top 5 was another transaction from Foresight Solar Fund Ltd., which acquired the 12.2 MW Highfields solar project in Essex, U.K., for $26.3 million from SunEdison.
Mercom notes it also tracked 150 large-scale project announcements worldwide in Q2'14 representing 7.6 GW. To learn more about the company's report, click here.