91 percent of VC funding in 2018 went to solar downstream companies, Mercom

Total global corporate funding into the solar sector, including venture capital and private equity (VC), debt financing, and public market financing came to $9.7 billion, a 24 percent drop compared to the $12.8 billion raised in 2017, according to Mercom Capital Group’s »2018 Fourth Quarter and Annual Solar Funding and M&A Report«. Global VC funding for the solar sector in 2018 fell 18 percent to $1.3 billion in 65 deals, compared to $1.6 billion raised in 99 deals in 2017. A total of 87 VC investors invested in the solar sector in 2018, compared to 162 in 2017. The top VC funded companies in 2018 were Cypress Creek Renewables, which raised $200 million, followed by Green Yellow, which raised $174 million, Amp Solar with $154 million, Wunder Capital with $112 million, and Sunnova Energy secured $100 million, says the report. »2018 was a year filled with uncertainties which started with Section 201 tariffs followed by an announcement from China that it was capping installations and reducing its feed-in-tariff,« commented Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.
Large-scale project funding announced in 2018 came to $14 billion in 183 deals, similar to the $14 billion raised in 167 deals during 2017. A total of 182 investors funded about 15 GW of large-scale solar projects in 2018 compared to 20.5 GW funded by 161 investors in 2017.
According to the findings, the solar sector set a record in 2018 for project acquisitions with 29 GW compared to the 20.4 GW in 2017. There were 218 large-scale solar project acquisitions (54 disclosed for $8.4 billion) in 2018 compared to 228 transactions (92 disclosed for $8.3 billion) in 2017. »About 100 GW of large-scale projects have been acquired since 2010, a reflection of how far solar has come as an asset class. Quality solar projects are now a mature, attractive investment opportunity around the world,« says Prabhu.
The top investors in large-scale projects in 2018 were European Bank for Reconstruction and Development (EBRD), which invested in 16 projects, followed by the Dutch development bank FMO with seven projects, and Natixis with six deals. Merger and acquisition activity in the solar sector rose to 82 transactions in 2018 compared to 72 transactions in 2017. The largest M&A transaction in 2018 was Global Infrastructure Partners (GIP) - through its Global Infrastructure Partners III fund along with Canada’s Public Sector Pension Investment Board and CIC Capital - acquired a 100 percent stake in Equis Energy from Equis for $5 billion. Furthermore French utility Total invested 1.7 billion to acquire 74.33 percent stake in Direct Energy. Swiss Capital Dynamics invested also 1.7 billion to acquire US company 8point3 Energy Partners, says the consultancy.
The solar Top 5 project acquisitions by megawatts in 2018 include Clearway Energy Group (CEG), buying 4.7 GW of utility-scale solar project pipeline from Sunpower, German BayWa r.e. acquired a 70 percent stake in a 2 GW pipeline in the Netherlands from GroenLeven Group, and the Global Atlantic Financial Group bought 26 US solar projects (33 percent stake) from Southern Power (1.7 GW). Moreover, Canadian Solar acquired five Australian solar projects (51 percent stake, 1.14 GW), and Consolidated Edison acquired Sempra Solar projects in the USA comprising 943 MW.
Mercom’s »2018 Fourth Quarter and Annual Solar Funding and M&A Report« covers 306 companies and investors at 120 pages and contains 107 charts, graphs, and tables (available at »www.mercomcapital.com«).

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