Mercom: Global funding for the solar sector fell 64% in 2016

Dive Brief:

  • Global corporate funding in the solar sector in 2016 totaled $9.1 billion, a 64% decline from $25.3 billion in 2015, according to Mercom Capital Group.The totals include venture capital/private equity financing, debt financing and public market financing.

  • Despite the overall decline, VC investments rose slightly to $1.25 billion in 77 deals, compared with $1.1 billion in 83 deals in 2015.

  • The largest drops came in the public market and debt market sectors, which saw roughly 30% declines.

Dive Insight:

Financing in the solar sector took a dip last year. Mercom reported lower numbers for the sector overall as did Bloomberg New Energy Finance.

BNEF recorded an 18% drop in worldwide clean energy investment in 2016, down to $287.5 billion from a record high of $348.5 billion in 2015.

Most of the decline was the result of slowdowns in China and Japan, according to BNEF, which saw 26% and 43% declines in clean energy investment, respectively.

Mercom found there were 27 public market financing in 2016 with a total value of $1.8 billion, compared with a record 38 deals in 2015 with a value of $6 billion. Mercom also noted four yieldcos (yield companies) tapped the public markets last year. There were none in 2016.

Debt financing also dropped in 2016 totaling $6 billion, compared with $18.3 billion in 2015, Mercom found.

“It was a challenging year for solar companies in terms of fundraising even as demand is expected to reach an all-time high,” Raj Prabhu, CEO and co-founder of Mercom Capital Group, said in a statement. “However,” he added, “2017 looks better than expected as lower module prices are expected to boost installation levels.”

The strongest sector last year was for residential and commercial solar project funds. The sector raised $4.9 billion for 30 funds compared with $5.7 billion raised in 24 funds in 2015. SolarCity, Sunrun, Solar Mosaic, Spruce Finance, and Tabuchi Electric were the top fund raisers in 2016, according to Mercom.

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Filed Under: Solar & Renewables Distributed Energy
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