Solar investment mostly up on venture capital and debt as money pours into large scale projects


From pv magazine USA.

Mercom Capital has released its Solar Funding and M&A 2019 First Quarter Report: Funding and merger & acquisition activity for the solar sector, which shows a general increase in investment in the solar industry globally.

The report notes total corporate funding – venture capital (VC), public market and debt financing – of solar increased to $2.8 billion last quarter from $2.5 billion in the first three months of 2018.

Global VC funding was up slightly to $176 million from 13 deals, versus 22 deals totaling $161 million in Q1 last year. Yellow Door Energy received $65 million in the largest deal of the period. The report noted downstream investment – including into developers such as Yellow Door – bagged 37% of the VC money. The 13 deals were spread across seven countries with the U.S. companies benefiting from five of the top deals.

Public market financing increased to $247 million across three deals, a leap from $103 million in four deals, year-on-year. Debt financing also increased slightly, from $2.35 billion in 19 deals during the quarter, versus $2.3 billion in the same period last year.

Large scale project financing roughly doubled, with $2 billion in financing for the Noor Energy 1 Solar Project leading the field. The 950 MW project received funding from a consortium of banking groups. Unique projects in the United States, including a LONGi and NexTracker project featuring single axis trackers and bifacial modules, also secured backing.

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In addition to large project financing, Mercom also reported 5.9 GW of projects acquired by investment groups at various stages of development. That is only reported deals, and likely did not include Enel flipping a 6 GW solar portfolio from Tradewind to Macquerie in late March, or National Grid buying into Geromino Energy's wind+solar portfolio with a cool $100 million.

The report noted new renewable energy and solar-focused funds raised a total of $3.8 billion in the quarter, for instance Madison Energy Investments – focused on ground-mount, rooftop and carport projects ranging from 500 kw – 20 MW – got $200 million.

An interesting nuance of the market, and the renewable industry as a whole, was that the total money spent stayed mostly flat at around $354 billion since 2010. While, as noted below, in 2010 the world installed 91 GW of capacity and spent $320 billion, in 2018 $348 billion secured 179 GW of new capacity – an extra 8% in cash for twice as much capacity. And that new solar is performing at higher capacity factors – meaning more than double the amount of electricity is being generated for about the same investment.

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