VC funding in solar rises to $207 million in Q3, reports Mercom

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Global clean energy communications and consulting firm, Mercom Capital Group, have published their third-quarter report on funding and mergers and acquisitions (M&A) activity for the solar sector, revealing that the industry received $207 million direct venture capital funding – up from $189 million in Q2.

Total corporate funding for the solar sector reached $2.18 billion, which represents a significant increase on the $915 million plowed into the industry in Q2. The increase, Mercom believe, is a result of a number of countries taking advantage of increasing market values in Q3.

"Overall market conditions for the solar sector continue to improve," said Raj Prabhu, Mercom’s CEO. "Project funding and M&A activity were at record levels, reflecting an improved demand outlook. Taking advantage of rising market values, we also saw significant financing activity among publicly-traded companies this quarter."

Topping that particular chart was Solexel, a high-efficiency crystalline silicon solar cell and module manufacturer, who raised $39.9 million in a VC deal with investment from Technology Partners, Northgate Capital, SunPower, GSV Capital, DAG Ventures and KCPB Holdings.

Oak Investment Partners poured $22 million into eSolar, while UAE Fund invested $20 million in Clean Power Finance, who provide third-party financing for distributed pv projects through their software platform. HelioVolt, who manufacture thin-film solar modules, raised $19 million from SK Group, while Australia’s Dyesol – who specialize in dye-sensitized PV technology – raised $16 million from Saudia Arabia-based conglomerate, Tasnee.

In total, third-party solar finance companies managed to raise $584 million in disclosed residential and commercial project funds in the third quarter.

M&A and large-scale PV investment

Activity in solar M&A was energetic, with $9.8 billion-worth of equity involved in the 23 registered transactions, especially when compared to the 18 transactions worth $1.3 billion that characterized M&A for Q2. The majority of the M&A activity in Q3 was strategic acquisitions of distressed assets, technlogies and entire companies, often at below-market levels.

Large-scale project funding deals amounted to nearly 1,267 MW of new power, totaling some $2.89 billion invested across 37 individual projects. Mercom also reports that 5.5 GW of new PV projects was announced worldwide in Q3, all at various stages of development.

A total of 3,000 MW of projects changed hand in this third quarter, with First Solar’s acquisition of Element Power’s 1,500 MW pipeline leading the way (the company also acquired the 250 MW Moapa Solar Project from K Road Power). Goldpoly acquired the second largest project of the quarter – 400 MW from a consortium of companies led by GD Solar. Goldpoly added an additional 300 MW to its portfolio with the acquisition of Zhongli Talesun Solar’s projects. The fifth-largest project to change hands was the 67 MW acquisition of seven Canadian Solar projects by Rainy River First Nations and Fiera Axium Infrastructure Canada II.