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Mercom Capital Group, llc, a global clean energy communications and consulting firm, released a new report on funding and merger and acquisition (M&A) activity for the solar sector in the third quarter of 2017 and the first nine months of 2017.
Total corporate funding (including venture capital funding, public market and debt financing) in the first nine months (9M) of 2017 was slightly lower compared to the same period in 2016, with about USD 7.1 billion raised compared to the USD 7.5 billion raised in 9M 2016. There were 143 deals in 9M of 2017 compared to 125 deals in the same period of 2016.
Looking at just Q3 2017 data, Mercom found that corporate funding in the solar sector grew 74 percent compared to Q2 2017, with USD 2.4 billion raised in 45 deals. In Q2 2017, USD 1.4 billion was raised in 37 deals. Year-over-year (YoY), funding in Q3 2017 was about 19 percent lower compared to the USD 3 billion raised in Q3 2016.
“Debt financing activity outside of the United States helped bump up corporate funding in the third quarter as financing activity in the United States was muted ahead of the Suniva anti-dumping case decision,” commented Raj Prabhu, CEO of Mercom Capital Group.
Global VC funding (venture capital, private equity, and corporate venture capital) for the solar sector in 9M 2017 rose a slight seven percent to USD 985 million from USD 925 million raised during the same period in 2016, largely due to a strong first quarter in 2017.
In Q3 2017, VC funding for the solar sector doubled with $269 million raised in 23 deals compared to USD 128 million raised in the same number of deals during Q2 2017. Most of the VC funding raised in Q3 2017 (72 percent) went to solar downstream companies with USD 193 million in 13 deals.
The Top VC deal in the third quarter of 2017 was the USD 100 million raised by Indian rooftop installer CleanMax Solar. It was followed by the USD 56 million raised by Singapore’s Sunseap Group, the USD 21 million secured by Sol Voltaics, and Ampt’s USD 15 million. Ubiquitous Energy also raised USD 15 million. A total of 35 investors participated in solar funding in the third quarter of 2017.
Solar public market funding was approximately 12 percent lower compared to the first nine months of 2016, with USD 1 billion raised in 9M 2017 compared to USD 1.2 billion raised during the same period of 2016. Public market financing fell significantly in Q3 2017 with just USD 79 million in four deals, down from USD 473 million raised in six deals in Q2 2017.
During the first nine months of 2017, debt financing activity accounted for USD 5.1 billion in 51 deals, which was almost six percent lower compared to the first nine months of 2016, when USD 5.4 billion was raised in 55 deals. In Q3 2017, announced debt financing rose steeply to USD 2.1 billion in 18 deals compared to the USD 798 million raised in eight deals during the second quarter of 2017.
In the top debt deals, Greenko Energy Holdings raised USD 1 billion in green bonds in two separate deals, USD 650 million and USD 350 million. Cypress Creek Renewables also received USD 450 million from Temasek.
Announced large-scale project funding in 9M 2017 crossed the USD 10 billion mark, with USD 10.2 billion raised for the development of 117 projects. For the third quarter of 2017 alone, announced large-scale project funding came in at more than USD 2.8 billion in 36 deals.
Announced residential and commercial solar funds totaled USD 2.2 billion in 9M 2017, which was lower by almost 35 percent when compared to the USD 3.4 billion raised during the same period of 2016.
The first nine months of 2017 saw a total of 58 solar M&A transactions, compared to the 48 transactions seen in the same period (9M) of 2016. There were 18 solar M&A transactions in Q3 2017, up from 11 solar M&A transactions seen in the preceding quarter (Q2 2017) and equal to the number of transactions (18) posted in Q3 2016. Of the 18 total transactions in Q3 2017, 13 involved solar downstream companies, three involved PV manufacturers, and there was one transaction each by a BOS company and an Equipment provider.
There were 161 large-scale project acquisitions in first nine months of 2017 aggregating over 14.6 GW, compared to 145 project acquisitions totaling just 7.1 GW during the same period of 2016.
Similar to Q2 2017, investment firms and funds were the most active acquirers in Q3 2017, with 26 projects for over 2 GW, followed by project developers with 16 transactions totaling over 1.1 GW.
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