A land grab for solar assets and entry into the market is driving deal activity, in addition to direct investment the strategics are offering incentives and other in-kind benefits for access to consumer and beginning to look at middle market.
Total company financing (like venture capital/private equity, public marketplace, and debt funding ) in the first nine months (9M) of 2019 was up with $9 billion increased, compared to $6.7 billion which was raised in precisely the exact same period last year, a 34% rise year-over-year (YoY) based on Mercom Capital Group’s recently released 9M 2019 Solar Funding and M&A Report.
In July 2019, Mercom had reported that at the first half of 2019 (1H 2019), financing activity in the solar sector was rising compared to the same period this past year. Total corporate financing (such as venture capital funding, public market, and debt financing) for the solar industry internationally came to $6 billion in the first half of 2019.
Business funding into the solar industry in Q3 2019 came to $3 billion, compared to $1.3 billion in Q3 2018.
“Corporate financing action so far this season is ahead of last year’s levels as demand outlook appears positive, and solar people companies continue to do well. In Q3 2019, over $100 million in venture funding went to engineering and manufacturing-focused companies, which is rare. Five IPOs and over a billion dollars in securitization deals so far this season are the highlights,”
Raj Prabhu, CEO of Mercom Capital Group.
In 9M 2019, international VC financing in the solar industry was 13% higher with $1 billion compared to $889 million raised in the first nine months of 2018. International VC/PE financing in Q3 2019 totaled $208 million in 11 deals.
Surprisingly, technology and production firms received more than a hundred million. Oxford PV proceeds to raise funds for its PERC solar cell technology while EXEGER Sweden, a PV module manufacturer, and Solaria, a cell manufacturer for consumer electronic equipment, buildings, and other applications, also increased substantial quantities.
A total of 88 VC investors participated in 9M 2019 in funding.
Solar public market funding in 9M 2019 climbed to $2.25 billion in 13 deals, 25% greater compared to $1.8 billion in 14 deals in 9M 2018.
64% of shares were compared to 26% in 9M 2018.
Seven of the solar stocks tracked by Mercom increased more than 50 percent in 9M 2019, together with three equities. Because of market conditions that were positive, there were five IPOs this year, increasing over a billion dollars united. There were two IPOs: a supplier of EPC solutions, Wilson & Sterling Solar and Sunnova Energy, solar support provider, raised $406 million and $168 million, respectively.
Six solar securitization deals helped the growth in debt financing action, totaling $1 billion in 9M 2019. Cumulatively, $4.7 billion has been increased through securitization prices since 2013. With low-interest rates expected to continue, and the possibility of further rate reductions in the U.S., the report states that there could be securitization deals going forward.
There were a total of 13 project funding deals larger than $100 million in Q3 2019. Funds were supplied by A total of 60 investors in Q3 2019 for large-scale project growth.
In 9M 2019, there have been a total of 57 (10 disclosed) solar M&A transactions compared to 64 (16 disclosed) trades in 9M 2018.
You will find 20 transactions in Q3 2019 in comparison to 19 transactions in Q2 2019 and 18 trades in Q3 2018. Of the 20 transactions in Q3 2019, 14 included solar downstream companies, five involved balance of system (BOS) businesses, and a single deal involved a solar support provider.Project acquisition activity has been reduced in 9M 2019, with 15.9 GW of solar energy projects obtained, compared to 23.6 GW acquired in precisely the same period last year. In Q3 2019, a total of 34 jobs to get a combined 4.3 GW were acquired.
Project programmers were the major acquirers of solar resources and accounted for about 2.2 GW of acquisitions from Q3 2019, followed closely by investment firms and capital, which picked up 739 MW of jobs, and utilities, and independent power producers (IPPs) which obtained 536 MW of jobs.
An anticipated mini-rush in installations before the investment tax credit dropdown from the U.S., comparatively mild after-effects in the safeguard duty from the U.S. and India, and continued growth in solar installations globally will continue to become favorable drivers for the industry according to the report.
