Mercom Capital Group

Mercom Capital Group says that total corporate solar funding, global venture capital funding, public market financing, and PV mergers and acquisitions all fell year on year in the first quarter of 2024. The sector is still grappling with high interest rates, which Wood Mackenzie says is disproportionately affecting renewables projects.

Despite inflationary challenges and elevated interest rates, financing in the solar industry has remained robust with corporate financing sitting at $28.9 billion – a 55% hike from last year’s $18.7 billion, a new report by Mercom Capital Group states.

Analysts at Mercom Capital Group have tallied up corporate funding, venture capital and debt and public market investment for battery storage, smart grids and energy efficiency companies. From a financial perspective, the industry appears resilient to the Covid-19 crisis and ready to grow further.

After a weak second quarter, financial activity is back at full steam in the PV sector, says Mercom, noting strong performance across a range of metrics.

Mercom Capital Group has issued a report tallying up financial activity in the solar sector between January and March 2020. The sobering result is that cash flows are down by considerable margins on all metrics.

Fundraising activity for solar leaped in the July-to-September period to provide healthy quarterly and year-so-far comparisons on 2018.

The head of Mercom Capital says solar has a long way to go before it can stand without policy support. Effective grid parity will only be achieved when the cost of PV electricity factors in the expense of grid upgrades and the storage systems its intermittent nature requires, says Raj Prabhu.

Talk of ‘grid-parity’ and ‘subsidy-free’ solar has had industry figures cherishing the ideal of a sector that can operate free of the caprices of government but a peer behind the latest global PV funding figures demonstrates just how dependent on policy the solar industry remains.

In 2017, battery storage, smart grid and energy efficiency companies saw a YoY increase in venture capital funding, garnering a combined US$1.5 billion, up from the $1.3 billion raised in 2016, finds the latest Mercom Capital report.

Despite a robust first quarter, Mercom CEO Raj Prabhu says the uncertainty surrounding the Suniva trade case caused a dip in the second quarter and could have devastating effects going forward.