Corporate funding in global solar sector reaches $6.3 billion in second quarter

Total global corporate funding in the solar sector in the year’s second quarter reached $6.3 billion, including venture capital, private equity, debt financing and public market financing raised by public companies, according to a report released on Tuesday by Mercom Capital Group.

The figure represents a decline from the first three months of the year, which saw corporate funding at $7 billion.

"It was a solid quarter for the solar sector in terms of fundraising," said Mercom CEO Raj Prabhu. "VC [ventura capital] funding was up, public markets remained strong and we are seeing new and innovative financial structures. Residential/commercial solar funds continue to raise record amounts."

According to the clean energy communications and consulting firm, global venture capital funding, including private equity and corporate venture capital, in the second quarter totaled $432 million from 21 deals, up from $251 million in 26 deals in the first quarter, due mostly to three large investments. Solar downstream companies attracted most of the venture capital funding this quarter, with $388 million in 10 deals.

Venture capital

The largest venture capital/private equity deal made between April and June was the $150 million raised by residential solar system provider Sunrun. Investors included Foundation Capital, Accel Partners, Sequoia Capital, Madrone Capital and others. Residential solar services firm Sunnova Energy raised $145 million. Other Top 5 deals included the $72.5 million raised by residential solar installer Sungevity, followed by Siva Power (formerly Solexant), a manufacturer of CIGS solar modules, which raised $15 million. Brite Energy Solar, a provider of residential and commercial solar services, raised $14.2 million.

Project funding

The Mercom report identified 33 large-scale project funding deals totaling $3.5 billion announced in the second quarter. The Top 5 large-scale project funding deals included the $820 million raised by Megalim Solar Power for a 121 MW CSP project in Israel; Tenaska’s $450 million raised for the development of the 150 MW Tenaska Imperial Center West solar project in California; the $290 million raised by First Solar for its 141 MW Luz del Norte solar project in Chile; the $190 million raised by SunEdison for the 72.8 MW Maria Elena solar project in Chile; and the $142 million raise by Abengoa for its 100 MW XiNa Solar One CSP project in South Africa.

Third-party funds

Third-party residential and commercial solar funds continued to attract significant attention, raising more than $1.3 billion in the period, according to the report. SunPower topped the list with $492 million in three different funds; investors included Google, Admirals Bank and Hannon Armstrong Sustainable Infrastructure Capital.

Corporate mergers and acquisitions

There were 25 corporate merger and acquisition transactions in the solar sector in the second quarter, down from 38 transactions in the first quarter. Solar downstream companies were involved in most of the transactions.

The largest disclosed merger and acquisition deal by dollar amount was SolarCity’s $350 million acquisition of solar cell and PV module manufacturer Silevo, followed by the $29 million acquisition of Zhejiang Ruixu Investment Company, a solar project development company and wholly-owned unit of ReneSola, by Jiangsu Akcome Solar Science & Technology Company.

Jun Yang Solar Power Investments, an independent power producer, acquired the remaining 32.1% of Jun Yang Holdings from Sun Reliant International, a wholly owned subsidiary of Hanergy Solar, for $14 million. RBI Solar, a provider of solar mounting systems, acquired Renusol, a subsidiary of Centrosolar Group, for $3.5 million. Rounding out the Top 5 was the acquisition by Jinzhou Yangguang Energy, a wholly-owned unit of Solargiga Energy, of an additional 10% stake in PV module manufacturer Jinzhou Jinmao Photovoltaic Technology from Kinmac Holding, raising its stake to 96%, for $2.2 million.

Project acquisitions

Project acquisitions in the period totaled $229 million from 34 transactions with 1.1 GW changing hands. The top disclosed deal by was Foresight Solar Fund Limited’s acquisition of SunEdison’s 17.8 MW Castle Eaton solar project in the United Kingdom for $37.6 million. This was followed by the sale of another U.K. project — the 19.5 MW Great Glemham solar project in Suffolk, England, by BayWa to Allianz Renewable Energy Fund for $35.7 million. Bluefield Solar Income Fund, an investment company focusing on large scale agricultural and industrial solar assets, acquired the 17.5 MW Hertfordshire solar projects from Solarcentury for $32.5 million, and ContourGlobal, an independent power producer, acquired a 5 MW solar portfolio in Italy from Sorgenia Solar for $27.5 million. Rounding out the Top 5 was another transaction from Foresight Solar Fund, which acquired the 12.2 MW Highfields solar project in Essex, England, for $26.3 million from SunEdison.

Mercom also tracked 150 large-scale project announcements worldwide in Q2 2014 representing 7.6 GW.