There was a more than fourfold increase in corporate solar funding in Q1 2021 compared with the same quarter last year, amid strong demand for PV assets globally, according to new analysis by Mercom Capital.
The research firm found that total corporate funding – including venture capital (VC) funding, public market and debt financing – reached US$8.1 billion, up from the US$1.9 billion recorded in Q1 2020, when the market was hit by a slowdown in activity due to COVID-19.
Despite disruptions over the past year, there has been a significant upward trend in funding during the last three quarters, with the latest figures setting up the industry for a strong 2021.
“Even though solar stocks lost some of their spark in the first quarter after an unprecedented run in 2020, a big IPO and record securitisation activity lifted overall fundraising totals,” said Raj Prabhu, CEO of Mercom Capital Group. He said solar assets are in “great demand” with almost 15GW of projects acquired in Q1.
Global VC funding for the solar sector reached US$1 billion, a 33% increase on the previous quarter and a 610% rise on Q1 2020. According to Mercom, the top VC-funded companies in Q1 2021 were: Loanpal, a provider of residential solar financing, which raised US$800 million; renewables developer Intersect Power; African off-grid solar electricity supplier Daystar Power; and Tigo Energy, a provider of module-level power electronics.
Announced debt financing in Q1 2021 jumped to US$4.3 billion through 14 deals, up from the US$1.8 billion secured from seven deals in the first quarter of 2020.
Meanwhile, there were 20 M&A transactions in Q1, 15 of which involved solar downstream companies. Recent deals in the space have seen EDF Renewables acquire 100% of US distributed generation company EnterSolar, while Spanish utility Naturgy announced in January a US$57 million purchase of US solar and storage developer Hamel Renewables.
In terms of large-scale solar project acquisitions, there were 82 transactions in Q1 2021 totalling 14.6GW of capacity, with developers and independent power producers the most active, followed by investment firms and funds.
Project acquisitions announced during the quarter include Lightsource BP’s purchase of a 1,060MW Spanish solar portfolio and a deal by industrial group Mytilineos that will see it take on a portfolio of 20 PV projects in Greece with a combined capacity of 1,480MW as well as a host of battery storage installations.