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Corporate Funding for the Global Solar Industry Rises to $12.8 Billion in 2017

Total corporate funding into the global solar sector jumped 41% to $12.8 billion during the full-year 2017, as interest in renewable energy projects gained steam around the global, according to a new analysis by global clean energy communications and consulting firm Mercom Capital Group.

The report, which tracks venture capital funding, public market financing and debt financing, also found that, compared to 2016, the number of deals inked by the sector in 2017 jumped by 21% to 206 deals.

The increased installation of solar energy projects around the world and lower-than-expected tariff recommendations by the US International Trade Commission helped to fuel strong fourth-quarter deal activity, and boosted the annual funding total higher.

“After several challenging years, most of the solar securities were up in 2017 reflecting overall positive sentiments around the solar industry even as several Chinese manufacturers decided to go private. Of course, all this could change swiftly if US President Donald Trump decides to impose higher tariffs in the trade case,” commented Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.

Q4 2017 and Full Year Funding into Global Solar Sector

 

A total of 187 construction projects for large-scale solar facilities were announced during the fourth quarter of 2017, amounting to 10.6 GW of planned project capacity. For the full-year 2017, a total of 50.1 GW of new large-scale projects were announced globally, up from 40.4 GW in 2016.

The top investors in large-scale projects included Clean Energy Finance Corporation (CEFC), which invested in 13 projects, followed by Santander with eight deals, and Commonwealth Bank of Australia and Siemens Financial Services with six deals each.

Venture capital firms also played a role in increasing the 2017 deal total. These firms raised their sector investments by about $300 million to $1.6 billion for the full year and increased the total number of deals they signed by 20% to 99 deals.

Solar downstream companies accounted for 85% of the total venture capital funding in 2017, bringing in $1.4 billion. Thin-film companies brought in $106 million while service providers raised another $47 million.

The top two venture capital funded companies in 2017 were ReNew Power, which raised $400 million in two separate deals, followed by Lightsource Renewable Energy, which raised $200 million in one deal.

There were 162 venture capital and private equity investors that participated in funding rounds in 2017, with eight involved in multiple rounds: Engie, Avista Development, DSM Venturing, InnoEnergy, Innogy, International Finance Corporation (IFC), Shell, and Techstars.

Public market financing was flat in 2017 at $1.7 billion raised in 33 deals, roughly even with the $1.8 billion raised by 27 deals in 2016. Three initial public offerings were logged during the year that raised a combined total of $363 million for Canadian Solar Infrastructure Fund, New Energy Solar Fund and Clenergy.

Announced debt financing in 2017 surged to $9.5 billion compared to $6 billion in 2016. There were six securitization deals in 2017 totaling $1.3 billion. Securitization deals surpassed the $1 billion for the  year, a first.

The year also saw a record-high total for solar securitization deals, which soared to more than $1 billion for the first time.

Other notable findings in Mercom’s 2017 Fourth Quarter and Annual Solar Funding and M&A

Report:

  • The largest and most M&A notable transaction in 2017 was the $1.6 billion acquisition of FTP Power (sPower) by AES and Alberta Investment Management (AIMCo) from Fir Tree Partners.
  • 20.4 GW of solar projects were acquired in 2017, up 67% compared to 12.2 GW in 2016.
  • More than $19.4 billion was raised by 56 newly established funds that focus on renewable energy investments in 2017.

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