Coronavirus pandemic slows solar sector funding; project M&A activity remains strong

Mercom Capital Group, a global clean energy communications and consulting firm, released its report on funding and merger and acquisition (M&A) activity for the global solar sector in the first quarter of 2020.

Total corporate funding, including venture capital funding, public market, and debt financing into the solar sector in Q1 2020 came to $1.9 billion, 31% lower compared to the $2.8 billion raised in Q1 2019.
The decrease in total corporate funding was primarily due to lower venture capital and public market financing activity in Q1 2020 as the Coronavirus pandemic disrupted solar markets around the world.
Chart: Solar Corporate Funding Q1 2019 - 2020
"Funding levels dropped in Q1 as the Coronavirus pandemic brought the global economy to a halt. Most large economies are shut down and there is minimal activity in solar markets. Solar project M&A was the bright spot in this time of uncertainty, proving once again that solar is a safe long-term bet. The worst may be yet to come, but hope is that activity picks up in the second half of the year," said Raj Prabhu, CEO of Mercom Capital Group.
Chart: Solar Top VC Funded Companies in Q2 2020
Global VC funding for the solar sector in Q1 2020 reached $145 million in nine deals compared to $176 million raised in 13 deals in Q1 2019.
The majority of VC funding raised in Q1 2020 went to solar downstream companies with $122 million in seven deals.
The top VC deals in the first quarter of 2020 were: Sunseap Group, which raised a total of $109 million in two different deals; cKers Finance raised $5 million; $4 million was raised by Daystar Power; and $3 million was raised by ZunRoof.
Solar public market financing dropped significantly with $22 million in one deal in Q1 2020 compared to $247 million in three deals in Q1 2019.
Announced debt financing in Q1 2020 totaled to $1.8 billion in seven deals compared to $2.4 billion in 19 deals in Q1 2019. One securitization deal was recorded in the quarter.
Chart: Solar Project Acquisitions Q1 2019-Q1 2020
There were 12 solar M&A transactions in Q1 2020 compared 18 solar M&A transactions in Q1 2019. Of the 12 solar M&A transactions announced in Q1 2020, 11 involved Solar Downstream companies. There was one transaction involving a module manufacturer.
There were 55 large-scale solar project acquisitions (eight disclosed for $4.1 billion) in Q1 2020 compared to 54 large-scale solar project acquisitions (20 disclosed for $1.4 billion) in Q1 2019.
Over 12 GW of solar projects were acquired in Q1 2020 compared to 10.1 GW in Q4 2019. In a YoY comparison, 5.9 GW were acquired in Q1 2019.
Oil and gas majors were the most active project acquirers in the first quarter of 2020, acquiring 6,452 MW of solar projects. Investment firms acquired 4,149 MW of projects, followed by project developers which picked up 937 MW of projects.
Chart: Solar Project Acquirer Mix Q1 2020
There were 230 companies and investors covered in this report, which is 75 pages in length and contains 66 charts, graphs, and tables.
To learn more about the report, visit: https://mercomcapital.com/product/q1-2020-solar-funding-ma-report/

About Mercom Capital Group
Mercom Capital Group, llc, is a global communications and consulting firm focused exclusively on clean energy and financial communications. Mercom's consulting division advises cleantech companies on new market entry, custom market intelligence, and overall strategic decision making. Mercom's consulting division also delivers highly respected industry market intelligence reports covering Solar, Storage, Grid and Efficiency technologies. Our reports provide timely information on industry happenings and ahead-of-the-curve analysis for C-level decision-makers. Mercom's communications division helps clean energy companies and financial institutions build powerful relationships with media, analysts, government decision-makers, communities, and strategic partners. For more information about Mercom Capital Group, visit: http://www.mercomcapital.com. To receive a copy of Mercom's popular weekly market intelligence reports, visit: http://eepurl.com/cCZ6nT.