The total global corporate funding in the solar sector, including venture capital/private equity (VC), debt financing, and public market financing raised by public companies, decreased to $5.9 billion in Q1 2015, compared to $6.4 billion in Q1 2015, said Mercom Capital Group, llc, a global clean energy communications and consulting firm.
VC funding dipped to $142 million in 24 deals, compared to $195 million in 27 deals in Q1 2015. Solar downstream companies continued to attract most of the VC funding with $60 million in 13 deals. Public market financing was a record $2.3 billion this quarter compared to $1.3 billion in Q1 2015. The largest deals this quarter (excluding IPOs) were the $670 million raised by Abengoa Yield, $408 million raised by Risen Energy, a Chinese solar PV manufacturer, and the $335 million raised by SunEdison, through its TerraForm Global Yieldco. There was one IPO this quarter: 8point3 Energy Partners, a yieldco company formed by First Solar and SunPower to own, operate and acquire solar energy generation projects, raised $420 million and listed on NASDAQ Global Select Market.
Debt financing fell this quarter to $3.4 billion, compared to $5 billion in Q1 2015. The top deal was the $1.3 billion loan secured by GCL New Energy, a Chinese solar project developer and investor, from China Merchants Bank, Nanjing Branch.
“Overall corporate funding was down slightly this quarter. Yieldcos had a significant impact on the financial activity in the sector and raised $1.6 billion in public markets, about $800 million in debt, and accounted for almost a third of all large-scale project acquisitions. Residential and commercial solar funds continue to attract record funding as the ITC expiration deadline approaches," said Raj Prabhu, CEO of Mercom Capital Group.
A total of 28 VCs invested in Q2 2015, with Clean Energy Venture Group participating in two deals. Mercom in its report said among the Top 5 VC deals in Q2 2015, the largest was the $40 million raised by Applied Solar Technologies, an off-grid solar energy service provider based in India, from Future Fund, Bessemer Venture Partners, Capricorn Investment Group and International Finance Corporation. Solexel, a manufacturer of crystalline-silicon solar cells and modules, raised $29.5 million.
Residential and commercial solar funds raised $1.93 billion in five deals, similar to the $1.92 billion raised in 10 deals last quarter, and the highest quarter to date. Of this total, $775 million went to three loan funds and $1.2 billion went to two third-party lease or PPA funds. SolarCity announced $1.5 billion in two separate deals. There were 17 corporate M&A transactions in the solar sector this quarter, compared to 29 transactions in Q1 2015. Solar downstream companies accounted for 10 of these M&A transactions, said Mercom.
The largest disclosed M&A transaction was the acquisition of RBI Solar, Rough Brothers Manufacturing, and affiliates (collectively RBI) for $130 million by Gibraltar Industries. RBI Solar is engaged in the design, engineering, manufacturing and installation of solar mounting systems for commercial and utility-scale solar projects.