Mercom Capital Group LLC says total corporate funding into the solar sector – encompassing venture capital (VC), private equity, debt and public market financing – increased 175% in 2014 to $26.5 billion, compared to $9.6 billion in 2013.
Global VC investments more than doubled to $1.3 billion in 85 deals in 2014, compared to $612 million in 98 deals in 2013.
Solar downstream companies saw the largest amount of VC funding in 2014 with $1.1 billion in 44 deals, accounting for 85% of venture funding. Investments in photovoltaic technology companies reached $75 million in 12 deals, with balance of systems companies close behind with $73 million in seven deals. Concentrated solar power companies attracted $59 million in three deals, followed by thin-film companies with $52 million in nine deals.
Mercom Capital says the top five VC-funded solar companies in 2014 were the following:
- Sunnova Energy, a provider of residential solar service to homeowners, raised $505 million in three deals;
- Sunrun, a provider of residential solar power systems and third party finance, raised $150 million;
- Renewable Energy Trust Capital, a finance platform established to acquire and own solar projects, raised $125 million;
- Sungevity, a provider of residential solar installations and third party finance, raised $72.5 million; and
- GlassPoint Solar, a provider of solar steam generators to the oil and gas industry, raised $53 million.
Residential and commercial funds showed strong growth in 2014, with 34 announced funds totaling $4 billion. SolarCity, SunPower, Vivint Solar, SunEdison and Syncarpha Capital were top fundraisers.
Mercom Capital reports that mergers and acquisitions activity in solar totaled $4 billion in 116 transactions, compared to $12.7 billion in 81 transactions in 2013. Consolidation activity continued among solar downstream companies with 57 transactions followed by manufacturers and equipment companies with 35 transactions.
‘The big story coming out of 2014 was the revival of capital markets – solar companies were able to access funding through multiple avenues,’ says Raj Prabhu, CEO of Mercom Capital. ‘The solar sector has come a long way from being perceived as a speculative high-risk investment to attracting investors based on low-risk attractive dividend yields.’
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