2010’s venture capital activity came in at US$1.67 billion in 65 transactions, up 18 percent over 2009’s US$1.4 billion. There was an increased activity in large scale solar project funding as well as debt and other funding types, which displayed the easing up of credit after 2009."Considering 2009 was a recession year, solar was only slightly up in 2010. After a good second quarter, venture capital investments trended down in Q3 and Q4," commented Raj Prabhu, Managing Partner at Mercom Capital Group.
148 different investors were involved in venture capital funding rounds in 2010 according to Mercom. Credit facilities that were provided to Chinese companies by Chinese banks was a hefty US$34 billion that overshadowed all other solar transactions in 2010 according to the report. Large scale project funding was US$4.1 billion in 2010 while debt and other funding types were US$36 billion of which the US$34 billion were in the form of credit facilities from Chinese government banks to Chinese solar companies like LDK Solar, Yingli Solar, JA Solar, Suntech and Trina Solar. Solar mergers and acquisition transactions in 2010 was US$2 billion in 44 deals in total and activities amounted to another US$450 million in 18 deals.
Prabhu says that it was a banner year for smart grid in terms of venture capital and mergers and acquisition activity.