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Corporate funding in the solar sector encompassing venture capital/ private equity (VC), debt and public market financing increased 175 per cent in 2014 with $26.5 billion, compared to $9.6 billion in 2013.
The total funding in the solar sector increased globally, with VC funding doubling, thanks to a strong public market, debt financing and IPO activity.
Mercom Capital Group, llc, a global clean energy communications and consulting firm, in its report for the solar sector in 2014 said global VC investments more than doubled to $1.3 billion in 85 deals in 2014, compared to $612 million in 98 deals in 2013.
VC funding in Q4 2014 was $315 million in 16 deals, compared to $87 million in 24 deals in Q4 2013.
“The big story coming out of 2014 was the revival of capital markets. Solar companies were able to access funding through multiple avenues like VC, public markets, IPOs and debt in record numbers, while the quest for lower cost of capital continued with securitisation deals. The solar sector has come a long way from being perceived as a speculative high-risk investment, to attracting investors based on low-risk attractive dividend yields,” Raj Prabhu, CEO of Mercom Capital Group, said.
Solar downstream companies saw the largest amount of VC funding in 2014 with $1.1 billion in 44 deals, accounting for 85 per cent of venture funding.
A total of 119 VC investors were active in 2014, with 12 investors participating in more than one round in 2014. Public market financing increased considerably to $5.2 billion in 52 deals in 2014, up from just $2.8 million in 39 deals in 2013. In 2014, seven IPOs brought in more than $2 billion.
Large-scale project funding announced in 2014 totalled $14.2 billion in 144 deals. Residential and commercial funds showed strong growth in 2014 with 34 announced funds crossing $4 billion. SolarCity, SunPower, Vivint Solar, SunEdison and Syncarpha Capital were the top fundraisers in 2014.
Corporate M&A activity in solar topped $4 billion in a record 116 transactions compared to $12.7 billion in 81 transactions in 2013.
The fourth quarter of 2014 was an active quarter for large-scale project development around the globe. Mercom tracked 241 project announcements totalling almost 9.5 GW for the quarter and 736 project announcements totalling 34.4 GW for 2014 in various stages of development globally.
INDIA
In India ACME Solar received a $100 million (~₹613 crore) loan for the development of 200 MW solar projects in India from the Asian Development Bank. Simpa Networks secured $4 million (~₹25 crore) in commercial debt financing from Overseas Private Investment Corporation (OPIC) and GDF Suez.
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