Solar venture capital investments fall by almost 50%

January 10, 2013
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

Try Premium for just $1

  • Full premium access for the first month at only $1
  • Converts to an annual rate after 30 days unless cancelled
  • Cancel anytime during the trial period

Premium Benefits

  • Expert industry analysis and interviews
  • Digital access to PV Tech Power journal
  • Exclusive event discounts

Or get the full Premium subscription right away

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

Premium
October 17, 2025
According to Ronak Maheshwari of CRC-IB, there has been a struggle for US renewable power projects to secure necessary equity .
October 17, 2025
Norwegian renewable energy firm Scatec has signed lease agreements for 64MW of solar PV and 10MWh of energy storage capacity in Liberia and Sierra Leone.
October 17, 2025
A group of over 20 US states are suing the Trump administration for the cancellation of the US$7 billion Solar For All Scheme.
October 16, 2025
Masdar and Turkey have entered the final stage of US$1 billion agreement to develop the 1.1GW plant in Bor, Niğde Province, central Turkey.
October 16, 2025
T1 Energy and Nextracker have agreed to use the latter’s steel module frames at the former’s new 5GW module manufacturing facility in Dallas.
October 16, 2025
US utility-scale solar additions grew by 56% in 2024, reaching 30GW from 2023’s 19GW and representing over 54% of all new electricity generation capacity added in the country last year.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 21, 2025
New York, USA
Solar Media Events
November 25, 2025
Warsaw, Poland
Solar Media Events
December 2, 2025
Málaga, Spain
Solar Media Events
February 3, 2026
London, UK