Total corporate funding, including venture capital funding, public market, and debt financing into the solar sector in Q1 2020 came to $1.9 billion, 31% lower compared to the $2.8 billion raised in Q1 2019, according to a recent report from Mercom Capital.
The report notes that the decrease in total corporate funding was primarily due to lower venture capital and public market financing activity in Q1 2020 as the Coronavirus pandemic disrupted solar markets around the world.
Venture capital funding
Global VC funding for the solar sector in Q1 2020 reached $145 million in nine deals compared to $176 million raised in 13 deals in Q1 2019. The majority of VC funding raised in Q1 2020 went to solar downstream companies with $122 million in seven deals.
The top VC deals in the first quarter of 2020 were: Sunseap Group, which raised a total of $109 million in two different deals; cKers Finance raised $5 million; $4 million was raised by Daystar Power; and $3 million was raised by ZunRoof.
In March, Telos Clean Energy announced the closing of a joint venture with Goldman Sachs’ Alternative Energy Investing Group to develop, construct, own, and operate distributed solar power projects. The solar projects will be expected to sell power to commercial, industrial, and municipal customers.
Goldman Sachs can invest up to $275 million to finance the activities of the joint venture and own assets, combining financing provided by several parties via tax equity, debt, and sponsor investments into a single capital source.
Public market and debt financing
Solar public market financing dropped significantly with $22 million in one deal in Q1 2020 compared to $247 million in three deals in Q1 2019. Announced debt financing in Q1 2020 totaled to $1.8 billion in seven deals compared to $2.4 billion in 19 deals in Q1 2019. One securitization deal was recorded in the quarter.
Mergers and acquisitions
There were 12 solar M&A transactions in Q1 2020 compared 18 solar M&A transactions in Q1 2019. Of the 12 solar M&A transactions announced in Q1 2020, 11 involved Solar Downstream companies. There was one transaction involving a module manufacturer.
There were 55 large-scale solar project acquisitions (eight disclosed for $4.1 billion) in Q1 2020 compared to 54 large-scale solar project acquisitions (20 disclosed for $1.4 billion) in Q1 2019.
Over 12 GW of solar projects were acquired in Q1 2020 compared to 10.1 GW in Q4 2019. In a YoY comparison, 5.9 GW were acquired in Q1 2019.
The report states that oil and gas majors were the most active project acquirers in the first quarter of 2020, acquiring 6,452 MW of solar projects. Investment firms acquired 4,149 MW of projects, followed by project developers which picked up 937 MW of projects.
