New data released by Mercom Capital Group in its annual report on funding and merger and acquisition (M&A) activity for the solar sector in 2020 reveal that total corporate funding into the solar sector, including venture capital (VC) and private equity (PE), debt financing, and public market financing, came to $14.5 billion globally, which represents a 24% increase compared to the $11.7 billion in 2019.
Global venture capital and private equity funding
According to Mercom Capital Group’s Solar Funding and M&A, 2020 Fourth Quarter and Annual Report, global VC funding in the solar sector came to $1.2 billion in 41 deals in 2020, compared to $1.4 billion in 53 deals in 2019.
Public market financing was up 101% with $5.1 billion and announced debt financing came to $8.3 billion in 2020. Eight securitization deals were recorded in 2020 reaching the largest amount in a year totaling $2.2 billion.
The top VC funded companies in 2020 were Ayana Renewable Power with $390 million, Silicon Ranch Corporation with $225 million, Brighte with $76 million, Sunseap Group with $72 million, and Aurora Solar and Zero Mass Water with $50 million each.
Mergers and acquisitions
The report finds that 62 merger and acquisition deals were transacted in the solar sector in 2020 compared to 65 in 2019 noting that most of the transactions involved solar downstream companies.
The report finds that there were 231 large-scale solar project acquisitions in 2020 compared to 192 transactions in 2019, representing a record 39.5 GW of large-scale solar projects changing hands in 2020 compared to 26.1 GW in 2019, which was the largest amount of projects acquired in a single year to date.
Raj Prabhu, CEO of Mercom Capital Group said:
“Following a tough first half when corporate funding was down 25% year-over-year, recovery has been swift and broad, with corporate funding up 24% for the year. Publicly-traded solar companies had an unprecedented year. The solar ETF was up 225%, with 15 solar stocks up over 100% in 2020. Public market funding was also up with the help of several IPOs, and debt financing was up on the back of securitization deals. Solar asset acquisitions were at an all-time high in a pandemic year and have become even more sought-after as an investment haven, especially in the uncertain COVID economy.”
Source: Press release by Mercom Capital Group.