Global venture capital and private equity funding in the solar sector in 2020 came to $1.2 billion through 41 deals, compared to $1.4 billion through 53 deals in 2019.
Corporate funding to the solar sector globally, including venture capital (VC) private equity (PE) debt financing, and public market financing, totalled $14.5 billion in 2020 — a 24% increase compared to $11.7 billion in 2019, a Mercom Capital Group report said.
The clean energy communication and consulting firm said in its annual report that during the first half of the fiscal, corporate funding was down 25% year-on- year, but recovery has been swift and broad, with corporate funding up 24% for the year.
Publicly traded solar companies had an unprecedented year with solar ETF up 225% and 15 solar stocks up over 100% in the calendar year. Public market funding was also up with the help of several IPOs, and debt financing was up on the back of securitisation deals. Solar asset acquisitions were at an all-time high becoming even more sought-after in the pandemic year, Raj Prabhu, CEO of Mercom Capital Group, said.
Global venture capital and private equity funding in the solar sector in 2020 came to $1.2 billion through 41 deals, compared to $1.4 billion through 53 deals in 2019. Of the $1.2 billion in VC/PE funding raised, $1.1 billion went to 27 solar downstream companies, which accounted for 90% of total VC funding in 2020. Solar service providers raised $61 million; PV companies raised $17 million; Balance of System (BOS) companies brought in $15 million; thin-film technology companies raised $15 million, and concentrator photovoltaics (CPV) companies raised $5.5 million.
The top VC-funded companies in 2020 were Ayana Renewable Power raising $390 million, Silicon Ranch Corporation bringing in $225 million, Brighte raising $76 million, Sunseap Group raising $72 million and Aurora Solar and Zero Mass Water, each raising $50 million. There were 102 VC and PE investors that participated in funding deals in 2020, with five involved in multiple rounds. Public market financing was up 101%, with $5.1 billion in 2020. Array Technologies raised $1.2 billion in its initial public offering in the fourth quarter of 2020.
In 2020, announced debt financing came to $8.3 billion, a 6.4% increase year on year. Eight securitisation deals totalling $2.2 billion were recorded in 2020, the largest amount of financing through securitisation in a year. Top investors in large-scale projects during the fourth quarter of the calendar year were Societe Generale, which invested in five projects, Sumitomo Mitsui Banking Corporation, which invested in four projects, Credit Agricole, European Bank for Reconstruction and Development (EBRD), and Inter-American Investment Corporation (IDB Invest), each investing in three projects.
Sixty-two merger and acquisition deals were transacted in the solar sector in 2020 compared to 65 in 2019. Most of the transactions involved solar downstream companies. The largest transaction in 2020 was Sunrun’s acquisition of Vivint Solar, in an all-stock transaction for $3.2 billion.
There were 231 large-scale solar project acquisitions in 2020 compared to 192 transactions in 2019. A record 39.5 GW of large-scale solar projects changed hands in 2020 compared to 26.1 GW in 2019. This was the largest amount of projects acquired in a single year to date.