The global solar power industry has enjoyed a strong start to 2014 in terms of corporate funding, attracting US$7 billion in the first quarter alone, according to a new report by clean energy consultancy firm Mercom Capital.
The US$7 billion figure, including venture capital (VC), private equity (PE), debt financing and other equity financings raised by private companies, showed a growth of US$2 billion from the previous quarter.
Mercom Capital chief executive officer Raj Prabhu highlighted that strong capital markets continue to exist in solar. Prabhu also pointed out that VC deals including some involving investment platforms had performed strongly in the quarter, as well as success in attracting funding for third party residential and commercial companies.
According to Mercom and Prabhu, the period just elapsed has also seen corporate solar merger and acquisition (M&A) activity surge to "a record 38 transactions", up from 25 transactions in the final quarter of 2013. The most M&A activity came in the downstream sector.
“M&A activity was strong among installers, developers, and distributors, while third-party finance firms were actively making acquisitions as they vertically integrate their businesses,” said Prabhu.
The figures included the acquisition by Danfoss of a 20% stake in inverter manufacturer SMA Solar Technology, for US$416 million.
The first quarter of this year has already seen a US$125 million Series C round of funding successfully carried out by Renewable Energy Trust Capital, a finance platform which provides a single equity capital source for owning and acquiring solar power projects.
The Renewable Energy Trust Capital deal was the largest of several deals in what Prabhu described as a "robust quarter for solar". In total, Q1 2014 saw corporate and global VC funding and PE total US$251 million across 26 deals; a jump from Q4 2013, when the figures were US$87 million and 24 deals, respectively.
Mercom also referred to 43 large-scale project funding deals made in the first quarter of this year, totalling a hefty US$3.6 billion. Notable projects included a US$942 million loan made to China WindPower Group for a total of 800MW of PV projects in China and US$250 million raised by Japan Solar/Nippon Renewable Energy to develop 157.5MW of PV in Japan.
Over US$1 billion was raised by third party solar lease fundraising, both residential and commercial in the period.
Finally, project acquisitions also enjoyed a record quarter, Mercom claims. Over 1.7GW of solar projects changed hands in the quarter, across 42 transaction with a financial value of US$1.5 billion in total. This included as its largest single deal the purchase of 400MW of plants in China by United Photovoltaics Group, formerly known as Goldpoly New Energy. United bought the projects from solar manufacturer GD Solar for just over US$660 million.
Through the first quarter, Mercom Capital claims it also tracked 170 announcements of large-scale projects worldwide, representing nearly 7GW of generation capacity.