Corporate solar financing rebounds in second half of 2020

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email
Corporate funding for solar projects rebounded in the second half of last year thanks in-part to public market financing Image: Wikimedia Commons

Corporate investment in solar projects reached US$10 billion in the second half of last year, recovering from economic shock induced by COVID-19.

That’s according to a new report from research firm Mercom Capital Group, which states that corporate funding for the sector rose by US$2.8 billion last year, helped by a surge in large-scale project investment and debt financing.

The figure for 2020 comes six months after Mercom’s half-year report, which warned that corporate solar funding had fallen to just US$4.5 billion in the first six months of the year due to the global health crisis and subsequent economic shock.

A total of 39.5GW of large-scale solar projects were acquired in 2020, but close to half of that capacity was purchased in the last three months of the year, with 15GW of projects purchased in Q4, reflecting a renewed confidence in the solar sector among investors.

The rate of investment in solar projects, which in Mercom's report includes venture capital, private equity, debt financing and public market financing, rebounded significantly in the second half of the year, and rose by close to a quarter (23.9%) across the whole of 2020, despite a slowdown in VC investment.

Solar corporate funding deals have been in decline since 2017, but their value has continued to rise Image: Mercom Capital

VC funding took a small hit last year as economic disruption made venture capital groups more cautious over smaller scale investment. A total of 41 deals were struck with VC groups last year totalling US$1.2 billion, roughly US$200 million less than the 53 deals signed in 2019.

Although just three Initial Public Offerings (IPOs) took place in the solar market last year, they raised US$1.3 billion, equal to the combined value of the 6 IPOs launched in 2019. Technology developer Array upsized its IPO target in October from US$100 million to US$1 billion.

The value of public market financing activity last year more than doubled last year, with solar companies raising US$5.1 billion through 27 deals globally.

The figures come after a “tough first half” to 2020, according to Marcom Capital’s chief executive Raj Prabhu, who added that publicly traded companies in the solar sector saw “unprecedented” investment growth. Solar exchange-traded funding rose by 225%, he said, while the share price of 15 listed solar companies doubled.

Solar asset acquisitions, Prabhu said, “have become even more sought-after as an investment haven, especially in the uncertain COVID economy.”

1 February 2022
As Solar Finance & Investment enters its ninth year, we sit on the cusp of a new power market with solar at its heart. The 2022 edition of the event will build on our years of expertise and relationships to bring investors and lenders together with top developers. Connect with leaders in the field and use exclusive insights to drive investment and development decisions for the future. Meet new and existing project partners at the largest gathering of European solar investors and lenders.

Read Next

December 3, 2021
Koch Engineered Solutions (KES) LLC has acquired US engineering, procurement and construction (EPC) firm DEPCOM, which specialises in utility-scale solar PV projects, for an undisclosed amount
December 2, 2021
Japanese electrical engineering and software company Yokogawa Electric Corporation has acquired all of the outstanding shares of renewable and distributed energy software company PXiSE Energy Solutions LLC for an undisclosed amount
December 2, 2021
Renewables developer BayWa r.e. has acquired Beacon Solar, the solar distribution division of Beacon, and will look to “cross-sell” solar and roofing products in the near future as it continues to expand across the US.
December 1, 2021
Major US bank Wells Fargo has closed its maiden tax equity investment into a colocated solar-storage project currently under construction in New Mexico, US.
December 1, 2021
Enefit Green, the renewables subsidiary of Estonian state-owned utility Eesti Energia, is looking to procure up to 500MW of solar modules in the next three years.
December 1, 2021
Tech major Amazon has added a further 2GW to its committed utility-scale solar PV capacity, adding projects in the US and Europe to its renewables portfolio.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
February 1, 2022
London, UK
Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal