Corporate Funding in Solar Sector in 9M 2021 Surges to $22.8 Billion

Source: 10/14/2021, Location: North America

Mercom Capital Group, llc, a global clean energy communications and consulting firm, released its report on funding and merger and acquisition (M&A) activity for the solar sector in the third quarter (Q3) and the first nine months (9M) of 2021.

Total corporate funding (including venture capital funding, public market, and debt financing) increased 190% in 9M 2021, with $22.8 billion (B) in 112 deals compared to $7.9B in 72 deals in 9M 2020.

Financing activity was up across the board, including venture capital, debt, and public market financing. Total solar corporate funding in Q3 2021 came to $9.3B in 41 deals, a 72% increase compared to $5.4B in 35 deals in Q2 2021.

"Investment activity continues to be robust across the solar sector and not just compared to 2020 (because of COVID). This will end up as one of the best years for solar financing since 2010. As the push toward the energy transition picks up speed worldwide, solar – one of the mature renewable energy resources – is benefitting enormously. Solar project acquisitions in the first nine months of 2021 have already surpassed all of 2020," said Raj Prabhu, CEO of Mercom Capital Group.

Global VC funding in the solar sector totaled $593 million (M) in 13 deals in Q3 2021, a 2% decrease compared to $608M in 12 deals in Q2 2021.

In 9M 2021, the solar sector brought in $2.2B in VC funding in 39 deals, 466% higher compared to $394M in 29 deals in 9M 2020.

Forty-one VC investors participated in solar funding rounds in Q3 2021.

Public market financing into the solar sector came to $2.7B in 10 deals in Q3 2021, 197% higher compared to $894M in five deals in Q2 2021. Solar public market financing in 9M 2021 was 209% higher, with $6.3B raised in 23 deals compared to $2B in 10 deals in 9M 2020.

There were seven solar initial public offerings (IPO) and SPACs announced in 9M 2021, bringing in $4.4B.

In Q3 2021, debt financing amounted to $6B in 18 deals, an increase of 54% compared to $3.9B in 18 deals in Q2 2021. Record securitization activity was a key contributor to the increase in debt financing activity during 9M 2021.

There were 29 solar M&A transactions in Q3 2021 compared to 34 M&A transactions in Q2 2021. In 9M 2021, there were 83 transactions compared to 42 deals in 9M 2020.

In 9M 2021, large-scale solar project acquisition activity was up 129%, with 55.5 GW being acquired compared to 24.3 GW in 9M 2020. A total of 15.8 GW of solar projects were acquired in Q3 2021.

Project developers were the most active solar project acquirers in 9M 2021, followed by oil and gas majors, investment firms, and utilities.

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