Total corporate funding in the solar sector in Q3 2016 was $3 billion: Mercom Capital Group

Mercom Capital Group has released a report on funding and merger and acquisition (M&A) activity for the solar sector in the third quarter of 2016.

According to the global clean energy communications and consulting firm total corporate funding, including venture capital and private equity (VC) funding, public market and debt financing into the solar sector in Q3 2016 was up to about $3 billion (B) in 45 deals, compared to $1.7B in 32 deals in Q2 2016.

“Funding levels bounced back across the board compared to a weak Q2, but they are still well below last year’s totals,” said Raj Prabhu, CEO and Co-Founder of Mercom Capital Group. “The combination of slower than expected U.S. demand, the overcapacity situation coming out of China, and global hyper-competitive auctions leading to lower margins has affected the entire supply chain and most of the solar equities are in the red year-to-date. The exception has been the rebound of some of the yieldcos.”

Global VC funding for the solar sector almost doubled in Q3 2016 with $342 million (M) in 16 deals compared to the $174M in 16 deals in Q2 2016.

The research firm notes that solar downstream companies raised $273M in eight deals compared to $112M in seven deals in Q2 2016. The largest share came from the $220M raised by Solar Mosaic. Other top VC deals in Q3 include $47M raised by Heliatek, $20M raised by BBOXX, $15M raised by d.light, and $10M each raised by Morgan Solar and Off-Grid Electric.

Solar public market financing in Q3 2016 came to $880M in five deals, including one IPO, compared to $179M in four deals in Q2 2016. BCBG recorded the first solar IPO in 2016 for $166M. In Q3 2015, public market financing totaled $1.8B.

Debt financing came to almost $1.8B in 24 deals in Q3 2016 compared to 12 deals in Q2 2016 for $1.3B. Year-over-year, $4.1B was raised in 22 deals in Q3 2015.

Residential and commercial solar funds raised in Q3 2016 came to $1.1B in five deals as compared to $1.36B in 11 deals in Q2 2016. Of the $1.1B announced in Q3, $760M went towards lease and $333M went to loan funds.

There were 18 M&A transactions in Q3 2016. Four acquisitions involved SunEdison companies as a result of the company filing for bankruptcy and selling off parts of its business.

There were 55 large-scale solar project acquisitions (24 disclosed for $1.3B) compared to Q2-2016 which had 38 transactions (13 disclosed for $1.9B). About 2.6 GW of solar projects were acquired in Q3 2016 compared to 2 GW in the previous quarter.

Mercom tracked 185 new large-scale project announcements worldwide in Q3-2016 totaling 9.2 GW.