Total corporate funding in solar sector dips 41% from Q1 2016

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According to, global clean energy communications and consulting firm, Mercom Capital Group, llc report, the total corporate funding, including venture capital funding, public market and debt financing into the solar sector in Q2 2016 fell to $1.7 billion this quarter, a 41 per cent drop compared to the $2.8 billion raised in Q1 2016.

By Belal Khan

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Year-over-year total corporate funding was down significantly compared to $5.9 billion in the second quarter of last year.

“The solar industry continues to experience weakness in terms of financing activity, and corporate funding in Q2 2016 was at its lowest level in three years,” said Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.

Global solar VC funding (including private equity) saw a large decline this quarter with $174 million in 16 deals compared to $406 million in 23 deals in Q1 2016. Year-over-year (YoY) VC numbers were slightly better compared to Q2 2015 with $142 million in 24 deals.

Solar downstream companies raised the most (64 per cent) VC funding in Q2 2016 with $112 million in seven deals. A large part of the total came from the $100 million raised by Silicon Ranch from private equity firm Partners Group.

Other VC deals this quarter included the $20 million raised by Tigo Energy, 1366 Technologies’ $15 million raise, and the $12.5 million raised by Sol Voltaics. A total of 21 VC investors participated in funding deals.

Solar public market financing in Q2 2016 came to $179 million in four deals compared to $94 million in four deals in the first quarter of 2016 and $2.3 billion in 12 deals in Q2 2015.

Announced debt financing came to $1.3 billion in 12 deals in Q2 2016 compared to $2.3 billion raised in 19 deals in Q1 2016 and $3.4 billion in 14 deals in Q2 2015.
It was a good quarter for residential and commercial solar funds, led by SolarCity, Mosaic, and Sunnova Energy, with $1.36 billion in 11 deals in Q2 2016, a 36 per cent increase over the $1 billion raised in six deals in Q1 2016.

Of the $1.36 billion announced in Q2 2016, $800 million went towards the lease model and $555 million went to loan funds. Since 2009, almost $20 billion has gone into residential/commercial solar funds.

There were 17 solar M&A transactions in the second quarter of 2016 compared to 14 in Q1 2016. Almost half of the M&A transactions involved solar downstream companies with eight deals, which was followed by BOS companies with five.

There were 38 large-scale solar project acquisitions (13 disclosed for $1.9 billion) in Q2 2016, compared to Q1 2016 with 50 transactions (22 disclosed for $1.2 billion).

More than 2 GW of solar projects were acquired in the second quarter compared to the 2.4 GW in the previous quarter.

The largest disclosed project acquisition by dollar amount in Q2 2016 was the $1.4 billion acquisition of 1,140 MW (solar 994 MW and wind 146 MW) renewable energy project pipeline of Welspun Renewables Energy by Tata Power Renewable Energy, a Tata Power subsidiary.

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