Global solar corp funding slips to USD 7.5bn in Q1 2022

Total corporate funding in the solar power sector around the world, including venture capital (VC), public market and debt financing, arrived at USD 7.5 billion (EUR 6.88bn) in the first quarter of 2022, falling by 7% in annual terms, shows a new report by Mercom Capital Group.

The funding was raised in 49 deals. While it marked a decline on a yearly basis, the total was 51% higher than in the fourth quarter of 2021 when 32 deals were made.

“Although financing activity was strong QoQ with robust demand for solar assets, significant headwinds are building up that can slow the momentum considerably,” said Prabhu, CEO of Mercom Capital Group. He highlighted major concerns for the industry such as supply chain hurdles, higher inflation and interest rates. Investment activity could be further dented, Prabhu went on to say, if tariffs are imposed son solar module imports from Malaysia, Cambodia, Thailand and Vietnam.

Global VC funding in the first quarter climbed by 19% on the year to USD 1.2 billion secured in 26 deals but dropped sequentially from USD 2.2 billion raised in Q4 2021. Clean energy marketplace and technology services platform Palmetto was responsible for the largest VC funding deal with a USD-375-million raising to aimed to speed up the adoption of residential solar across the US. Aurora Solar and DSD Renewables came next on the list, with deals that brought them USD 200 million each.

Solar public market financing in January-March slipped by 9% on a yearly basis to USD 2.5 billion, with only one initial public offering (IPO) reported. Debt financing activity, meanwhile, came at USD 3.8 billion, zooming 137% from the previous quarter when USD 1.6 billion was raised. The total, however, was 12% lower as compared to the year-ago period.

The merger and acquisition (M&A) activity included 29 solar corporate M&A transactions, as compared to 20 deals a year before.

Large-scale solar project acquisitions represented a combined capacity of more than 23 GW, while in the year-ago period only 15 GW of projects changed their ownership.

(USD 1.0 = EUR 0.917)

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