Mercom Capital Group, llc, a global clean energy communications and consulting firm, released its report on funding and merger and acquisition (M&A) activity for the solar sector in the second quarter and the first half of 2020.
Image by Giani Pralea from Pixabay
Total corporate funding (including venture capital funding, public market, and debt financing) in 1H of 2020 came to $4.5 billion (B) compared to $6B in 1H 2019, a 25% drop year-over-year (YoY).
Chart: Solar Corporate Funding 1H 2016-1H 2020
"Financial activity in the first half of the year reflects the realities on the ground. Even though solar stocks have performed well, and corporate funding in Q2 looked slightly better because of several securitization deals, global economies and solar activity are still far from being back to where they should be. Project acquisition activity, typically a sign of health in the sector, declined significantly in Q2," said Raj Prabhu, CEO of Mercom Capital Group.
In 1H 2020, global VC funding (venture capital, private equity, and corporate venture capital) in the solar sector was 74% lower with $210m compared to $799M in 1H 2019.
A total of 23 VC investors participated in solar funding in 1H 2020.
Chart: Top VC funded companies in 1H 2020
Solar public market financing in 1H 2020 came to $758M in six deals. Public market financing totaled $737M in five deals in Q2 2020 compared to $22M in one deal in Q1 2020.
Announced debt financing activity in 1H 2020 ($3.6B in 15 deals) was 16% lower compared to the 1H of 2019 when $4.2B was raised in 27 deals.
There were four solar securitization deals totaling $1.06B in 1H 2020.
Chart: Solar Top Announced Large-Scale Projects Funded by Dollar Amount in Q2 2020
Announced residential and commercial solar funds totaled $1.2B in 1H 2020.
In 1H 2020 there were 25 solar corporate M&A transactions compared to 37 transactions in 1H 2019.
The top transaction in 1H 2020 was the divestment of Brookfield Renewable Partners' Thailand-based solar energy business, sold for $100M.
Chart: Solar Project Acquirer Mix (%) 1H 2020
Solar project acquisition activity was up in 1H 2020 with 14.7 GW compared to 11.6 GW in 1H 2019. 3 GW of solar projects were acquired in Q2 2020. Oil and gas majors were the major acquirers of solar assets in 1H 2020.
Chart: Solar Project Acquisitions 1H 2016-1H 2020
There were 203 companies and investors covered in this 79-page report.
About Mercom Capital Group
Mercom Capital Group is a global communications and consulting firm focused on clean energy. Mercom produces funding and market intelligence reports covering Solar and Battery Storage/Smart Grid/Efficiency. Mercom advises cleantech companies on new market entry, custom market intelligence and overall strategic decision-making. https://www.mercomcapital.com
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