Solar venture capital investments fall by almost 50%

Facebook
Twitter
LinkedIn
Reddit
Email

Investments plunged to US$992 million in 2012 compared to US$1.9 billion the previous year, representing the lowest amount since 2007, reports consulting firm Mercom Capital.

Venture capital (VC) financing, the investment in early-stage, high-potential, growth companies, in Q4 2012 was US$220 million. The leading VC deal in this quarter was concentrating solar thermal company BrightSource Energy with US$83.6 million.

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

BrightSource also led the way in the downstream category, which benefitted from low module prices. The total investment was US$269 million. The top five VC funding deals in 2012 were BrightSource Energy,  for US$83.6 million, SolarCity, a solar lease firm, for US$81 million, CIGS company Nanosolar for US$70 million, solar lease company Sunrun for US$60 million, and MiaSolé, a CIGS company, for US$55 million.

Thin-film companies saw the largest amount of VC funding in 2012, although the total fell 47% to US$314 million compared to almost US$600 million in 2011.

“The slowdown in VC funding can be attributed to the grim prospects for thin-film, concentrating solar and concentrating PV technologies,” commented Raj Prabhu, Managing Partner of Mercom Capital. “With the drastic fall in crystalline-silicon PV prices over the last two years, most other technologies have struggled to compete.”

Corporate mergers and acquisitions (M&A) in solar amounted to US$6.7 billion in 52 transactions compared to US$4 billion in 65 transactions in 2011. Notable M&A transactions were Korean conglomerate Hanwha Group’s acquisition of German PV manufacturer Q-Cells for US$322 million, a price tag that included the assumption of US$272 million in debt, the US$275 million acquisition of Oerlikon Solar, a thin-film manufacturer, by Tokyo Electron.

Active project investors in 2012 included the Development Bank of Southern Africa with 10 transactions, HSH Nordbank with six, International Finance Corporation with five followed by Export Import Bank of the US, KfW Entwicklungsbank and Union Bank with four transactions each.

Announced debt funding in 2012 came in at US$6.9 billion in 34 deals, compared with US$19.9 billion in 41 deals in 2011. The largest debt deal in 2012 was the US$1.6 billion credit facility received by Chinese developer Sky Solar by China Development Bank. Loans, credit facilities and framework agreements announced by Chinese banks to Chinese solar companies have reached US$52.6 billion since 2010.

Furthermore, Mercom tracked 35 solar companies that filed for insolvency or bankruptcy protection over the course of 2012. More than 70% of these companies were active in manufacturing and all but a few were based in Europe and the United States. Thin-film manufacturers accounted for nearly 40% of the bankruptcies.

“The diminished funding activity is not a true reflection of the health of the solar sector, because the demand side of global solar installations has continued to grow,” said Prabhu. “Global solar installations look set to grow by around 10-12% this year.”

Read Next

June 18, 2025
Dimension Energy has secured US$360 million in financing to develop a 112MW portfolio of community solar projects across six US states.
June 18, 2025
Spain has released the results of its investigation into the April blackout, which ruled out renewables as the cause of the disruption.
June 18, 2025
US solar tracker manufacturer Array Technologies has acquired APA Solar, a producer of foundations and fixed-tilt racking for solar projects.
June 18, 2025
The US Senate Finance Committee draft bill is a “stake in the heart” of US solar manufacturing, according to Democrat senator, Ron Wyden.
June 18, 2025
T1 Energy has selected a local construction company, and secured a tax abatement package, to develop a Texas cell manufacturing factory.
June 18, 2025
Founder Group has signed a US$220 million memorandum of understanding (MOU) with Chinese polysilicon producer GCL Technology.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
June 30, 2025
10am PST / 6pm BST
Solar Media Events
July 1, 2025
London, UK
Solar Media Events
July 1, 2025
London, UK
Media Partners, Solar Media Events
July 2, 2025
Bangkok, Thailand
Media Partners, Solar Media Events
September 2, 2025
Mexico City, Mexico