Total Corporate Sector Solar Funding Rebounds in Q1, Large-Scale Project Funding Rises to Record-High
*Courtesy Mercom Capital
- April 9, 2019
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Total corporate solar sector funding came to $2.8 billion in Q1 2019, up 10 percent from $2.5 billion a year ago when the imposition of U.S. import duties and subsidy and installation cuts in China, according to Mercom Capital.
Venture capital (VC) solar sector funding totaled $176 million across 13 transactions in Q1 as compared to $161 million across 22 deals a year ago. Solar public market financing totaled $247 million in three deals through the first three months of 2019 as compared to $103 million in four deals in the corresponding period of 2018. Debt financing totaled $2.35 billion in 19 transactions in Q1 this year as compared to $2.3 billion in Q1 2018, Mercom highlights in its Q1 2019 Solar Funding and M&A Report.
“Funding levels were up slightly year-over-year in Q1 2019, but the solar industry was on a much stronger footing at the beginning of this year compared to a year earlier," Mercom Capital Group CEO Raj Prabhu commented. "The market is upbeat, and solar equities rebounded strongly in the first quarter. However, China is still a wild card, and depending on its 2019 policy direction, it could have a significant impact on the solar industry,” said Raj Prabhu, CEO of Mercom Capital Group.
Q1 2019 solar funding highlights
Large-scale solar energy project funding rose to a record-high $5.68 billion in 43 deals in 2019's first quarter. That compares to $2.8 billion in 47 deals for Q4'18 and $2.7 billion in 57 deals a year ago, Mercom highlights.
Most of the $176 million of capital VC companies poured into solar sector companies in Q1'19 went into downstream companies— $111 million of the total. Yellow Door Energy raising $65 million, perovskite solar cell and module manufacturing pioneer Oxford PV raising $41 million and Africa and developing world off-grid solar and energy services pay-go specialist BBOX raising $37 million in two deals were the top three VC investments by dollar value in the first quarter.
In addition, solar energy systems design and proposal specialist Aurora Solar raised $20 million and Ghana off-grid solar home systems and microfinance provider PEG Africa raised $5 million.
All told, 28 VC investors participated in solar funding transactions for the quarter, according to Mercom's latest report. Q1'19's 13 VC solar sector investments were spread across seven countries. Five were in the U.S.
Q1'19 solar sector public market, debt financing and M&A
Public market solar sector financing more than doubled in Q1'19, up 139 percent year-to-year. Among the three public market capital raises, Ginlong (Solis) Technologies went public in rare IPO, Mercom notes.
Solar sector debt financing rose 9.5 percent year-to-year in this year's first quarter. Three were securitizations of solar energy assets.
Two residential and commercial solar funds raised $207 million in Q1'19 as compared to zero in 2018's fourth quarter. A total $408 million was raised in one solar fund launch in Q1'18, according to Mercom.
Solar sector M&A held steady in Q1'19 as compared to the year-ago period. Eighteen solar sector M&A transactions, 14 involving downstream solar energy companies, took place during the quarter. Solar equipment manufacturers and balance of system (BoS) companies were involved in two M&A transactions each.
In addition, a total of 5.9 gigawatts (GW) of solar power projects were acquired in 2019's first quarter. That compares to 4.8 GW in Q4'18 and 7.7 GW in Q1'18. ERG subsidiary ERG Power Generation acquiring a 78.5 equity stake in PV generation facilities manager Perseo for $255 million was the quarter's largest acquisition, according to Mercom.
All told, 18 investment companies and funds acquired 20 projects with a collective capacity of 3.5 GW during this year's first quarter. Fourteen utilities and independent power producers (IPPs) acquired 19 with a total capacity of 1.15 GW, while 13 project developers acquired 14 projects with a collective 803 MW of capacity during the quarter by Mercom's tally.