Mercom Capital Group Releases Q2 Report On Solar Sector Deals


Solar venture capital (VC) investments increased to $189 million in 19 deals in the second quarter of this year (Q2'13) compared to $126 million in 26 deals in the previous quarter, finds a new report from Mercom Capital Group. Solar downstream companies received most of the funding, with $128 million.

The report adds that corporate funding in the solar sector, including VC funding, debt financing and other types of funding raised by public companies through sale of shares, totals $915 million.

"With solar technology companies struggling, investments have been going to downstream companies," comments Raj Prabhu, CEO of Mercom Capital Group." That said, investments into solar technology companies haven't completely dried up. Small venture rounds are still going to several niche technology companies instead of the larger deals that were typical for thin film, CSP and CPV companies."

According to the report, the largest VC deals in Q2'13 included the approximately $69 million raised by Chinese solar developer Hefei Golden Sun Energy Technology from existing investor Jiangsu Akcome Solar Science & Technology.

Clean Power Finance, a provider of third-party financing for distributed PV projects through its software platform, raised $42 million from Edison International, Kleiner Perkins Caufield & Byers, Google Ventures, Claremont Creek Ventures, Clean Pacific Ventures, Sand Hill Angels, Hennessey Capital, Duke Energy, and two other investors, the report says.

Solexel, a developer of crystalline silicon solar cells and modules, raised $14.8 million, followed by Tigo Energy, a developer of smart modules and optimizers for PV systems, which raised $13 million from Alon Ventures. Scifiniti, a crystalline silicon technology company focused on delivering a drop-in replacement to photovoltaic silicon wafers, raised $10 million from Alloy Ventures, Firelake Capital Management, I2BF Global Ventures and Peninsula Ventures. There were 27 active VC investors in the sector this quarter, the report notes.

Mercom says third-party finance companies raised a record $1.33 billion in disclosed residential and commercial solar project funds in Q2'13 – the strongest quarter ever for solar lease funds, with the total amount raised in the first six months almost equivalent to all of the solar lease funds raised last year.

Solar mergers and acquisitions (M&A) activity in the quarter amounted to $1.27 billion in 18 transactions. The report says themes emerging out of the quarter's M&A activity included consolidation in the inverter market, strategic acquisitions, and acquisitions of distressed assets/companies.

According to Mercom, the largest disclosed M&A transaction by dollar amount in Q2'13 was the Swiss power and automation technology group ABB's acquisition of Power-One, a provider of renewable energy and energy-efficient power conversion and power management solutions, for approximately $1 billion.

Enel Energia, a power distribution company, also reached an agreement to acquire, a manufacturer of photovoltaic, solar thermal and mini-wind systems from Enel Green Power S.p.A., for approximately $123 million.

Advanced Energy Industries, a provider of power and control technologies for thin-film manufacturing and solar power generation, acquired REFUsol Holding, a provider of three-phase string solar PV inverters for commercial applications, for $77 million.

Sino-American Silicon Products, a manufacturer of solar silicon wafers, bought Sinosolar Corp., a producer of solar wafers and solar cells, for $27 million. LDK Solar, a vertically integrated manufacturer of photovoltaic products, sold its interest in LDK Solar High-Tech (Hefei) Co. to Hefei High Tech Industrial Development Social Service Corp., an affiliate of the Hefei City Government, for approximately $19 million.

Announced large-scale project funding in Q2'13 came in at $2.94 billion, up from $1.77 billion last quarter.

Notably, Solar Star Funding, the wholly owned subsidiary of Warren Buffet's MidAmerican Energy, completed a $1 billion bond offering during the quarter – the largest solar bond financing deal to date, according to the report.

There were more than 670 MW of disclosed projects that changed hands in the second quarter of this year, the report continues. The top-five disclosed acquisitions by project size ranged from 30 MW to 150 MW.

According to the report, the largest transaction was First Solar's acquisition of the 150 MW Solar Gen 2 Project in California from an affiliate of the Goldman Sachs Group, Energy Power Partner and a third undisclosed equity partner, followed by First Solar's sale of its 139 MW Campo Verde Solar Project to Southern Power and Turner Renewable Energy. First Solar also acquired the 60 MW North Star Solar Project from NorthLight Power.

The report says the fourth largest transaction by project size was BluEarth Renewables' acquisition of four photovoltaic projects in Canada from Canadian Solar Solutions totaling 53.9 MW. The fifth largest acquisition was Armstrong South East Asia Clean Energy Fund's acquisition of a 60% in Symbior Solar Siam's Central and Northeast Solar Projects totaling 30 MW.

For more information about Mercom Capital Group's report, click here.

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