Total global corporate funding in the solar sector, including venture capital (VC)/private equity, debt financing and public market financing raised by public companies, decreased to $5.9 billion in the second quarter, compared to $6.4 billion in the first quarter of the year, according to a report from Mercom Capital Group LLC.
However, announced large-scale project funding came to $1.9 billion in 26 deals. Residential and commercial solar funds raised by third-party solar finance companies totaled $1.93 billion in five deals – the highest quarter to date, says the report. Of this total, $775 million went to three loan funds, and $1.2 billion went to two lease or power purchase agreement funds.
‘Overall corporate funding was down slightly this quarter. Yieldcos had a significant impact on the financial activity in the sector and raised $1.6 billion in public markets – about $800 million in debt – and accounted for almost a third of all large-scale project acquisitions. Residential and commercial solar funds continue to attract record funding as the [investment tax credit] expiration deadline approaches," says Raj Prabhu, CEO of Mercom Capital Group.
VC funding dipped to $142 million in 24 deals in Q2'15, compared to $195 million in 27 deals in Q1'15. Solar downstream companies continued to attract most of the VC funding, with $60 million in 13 deals.
Among the top five VC deals in Q2'15, the largest was $40 million raised by Applied Solar Technologies. Solexel raised $29.5 million, Solantro Semiconductor raised $11 million, Flisom raised $10.7 million and Persimmon Technologies raised $8.9 million.
A total of 28 VCs invested in Q2'15, with Clean Energy Venture Group participating in two deals. Public market financing was a record $2.3 billion, and there was one initial public offering: 8point3 Energy Partners raised $420 million and was listed on NASDAQ.
Additionally, debt financing fell this quarter to $3.4 billion.
There were 17 corporate mergers and acquisitions (M&A) transactions in the solar sector this quarter, compared to 29 transactions in the first quarter. Solar downstream companies accounted for 10 of these M&A transactions.
There were 66 large-scale solar project acquisitions, totaling $2.9 billion, with about 3.5 GW changing hands. Project developers acquired 1.7 GW of large-scale solar projects, followed by yieldcos with 1.1 GW.
Mercom also tracked 209 new large-scale project announcements – representing 10.4 GW – in various stages of development worldwide.
More on the report can be found here.