Mercom reports “significant” downtrend in solar sector VC funding transactions


However, it added that “consistent” growth in project and other financing in the sector is “noteworthy” as an indication of availability of credit in the market. It also saw an “uptick” in growth in the value of M&A transactions.

The news comes as Mercom releases its merger and acquisition (M&A), and funding activity for the solar sector for the third quarter of this year.

It said that total disclosed VC funding for the solar sector came in at USD$169.35 million for 11 transactions, compared to $922 million for 18 transactions during Q2. Other funding transactions came in at a “whopping” $20.7 billion of 12 disclosed deals, of which over $20 billion are loan and credit facilities issued to Chinese manufacturers by Chinese banks.

The transactions, it said, include $8.9 billion to LDK Solar, $4.4 billion to JA Solar Holdings, $5.3 billion to Yingli Green Energy and $1.9 billion to Solarfun. “Significant” VC investments include $65 million raised by Solaria Corporation and $21.5 million raised by SolarCity.

At $585.65 million, Mercom said that there was a “surge” in solar M&A activity during Q3 compared to $298 million in Q2. Out of 12 M&A transactions in Q3, eight were reportedly disclosed compared to the second quarter, where only two were disclosed. A significant M&A transaction in the sector included the acquisition of Recurrent Energy by Sharp for $305 million.

Furthermore, said the group, according to the Department of Energy (DOE) $3.04 billion was spent in the third quarter of 2010 compared to $1.75 billion in Q2. It added that DOE has spent a total of $7.89 billion so far, out of the $32 billion funding commitments from the Recovery Act.

All funding transactions for Q3 can be downloaded here.