Corporate funding to Solar sector grows 24 per cent globally in 2020: Mercom Capital

Corporate funding to the solar sector globally including venture capital (VC) private equity (PE) debt financing and public market financing together  totalled $14.5 billion in 2020 showing a 24 per cent increase compared to $11.7 billion in 2019, a Mercom Capital Group report said.

The clean energy communication and consulting firm said in its annual report that during the first half of the fiscal, corporate funding was down 25 per cent year-on- year, but recovery has been swift and broad, with corporate funding up 24 per cent for the year. Publicly traded solar companies had an unprecedented year with solar ETF up 225 per cent and 15 solar stocks up over 100 per cent in the calendar year.

Public market funding was also up with the help of several IPOs, and debt financing was up on the back of securitisation deals. Solar asset acquisitions were at an all-time high becoming even more sought-after in the pandemic year, Raj Prabhu, CEO of Mercom Capital Group said.

Global venture capital and private equity funding in the solar sector in 2020 came to $1.2 billion through 41 deals, compared to $1.4 billion through 53 deals in 2019. Of the $1.2 billion in VC/PE funding raised, $1.1 billion went to 27 solar downstream companies, which accounted for 90% of total VC funding in 2020. Solar service providers raised $61 million; PV companies raised $17 million; Balance of System (BOS) companies brought in $15 million; thin-film technology companies raised $15 million, and concentrator photovoltaics (CPV) companies raised $5.5 million.

There were 102 VC and PE investors that participated in funding deals in 2020, with five involved in multiple rounds.The top VC-funded companies in 2020 were Ayana Renewable Power raising $390 million, Silicon Ranch Corporation bringing in $225 million, Brighte raising $76 million, Sunseap Group raising $72 million and Aurora Solar and Zero Mass Water each raising $50 million.

Public market financing was up 101 per cent. Array Technologies raised $1.2 billion in its initial public offering in the fourth quarter of 2020. In the same year, announced debt financing came to $8.3 billion, a 6.4 per cent increase year-on-year.

Eight securitisation deals totalling $2.2 billion were recorded in 2020, the largest amount of financing through securitisation in a year. Top investors in large-scale projects during the fourth quarter of the calendar year were Societe Generale, which invested in five projects, Sumitomo Mitsui Banking Corporation which invested in four projects, Credit Agricole, European Bank for Reconstruction and Development (EBRD) and Inter-American Investment Corporation (IDB Invest), each investing in three projects.