Mercom Capital Group, llc, a global
clean energy communications and consulting firm, today released its report on funding
and mergers and acquisition (M&A) activity for the solar sector during the
first quarter of 2012.
Venture Capital (VC) funding
in the solar sector was off to a slow start in Q1 2012. VC funding for the
quarter came to $329 million in 34 deals, the lowest dollar amount recorded
since Q4 2010; however, VC investors were still very active in the sector with
a record 34 deals funded, the highest ever recorded in the solar industry.
“While VC’s interest in the solar
sector remains strong, their appetite for risk appears to be lower as the
average VC funding round amount in Q1 was $10 million, compared to $18 million
in 2011,” said Raj Prabhu, Managing Partner at Mercom Capital Group
“To add to the current over
capacity problems, policy changes and lower tariff announcements in some of the
largest solar markets, such as Germany and Italy, will all contribute to an
uncertain 2012,” Prabhu continued. “We can expect a more cautious approach to
investing in the solar sector this year.”
There was strong M&A
activity in the solar sector totaling $5 billion in 14 transactions, however
only three of these transactions disclosed details. The spike in M&A amounts
was mainly due to the $4.7 billion acquisition of Solutia, a
performance and specialty chemicals company with products in PV encapsulants,
performance films for PV and CSP products and heat transfer fluids for CSP
plants, by Eastman Chemicals Company. Another significant M&A transaction
was the $275 million acquisition of Oerlikon Solar, a producer of
equipment and turnkey manufacturing lines for thin film amorphous silicon and
tandem junction technology, by Tokyo Electron.
The first quarter of 2012
also saw 11
new cleantech and solar-focused investment funds announced committing $5.7
billion. A significant positive event for the solar sector in Q1 was the
Initial Public Offering (IPO) of the microinverter company Enphase Energy,
which raised $62 million as part of its offering.
The top five funding deals
made up about 60 percent of the total funding in this quarter, led by $81
million by SolarCity, a pioneer in the solar lease model. Three of the five top
companies to receive funding also included MiaSolé, Nanosolar and AQT Solar,
all CIGS companies, raising $94 million in total. Maintaining last year’s
trend, with half a billion dollars raised in 2011, CIGS companies continued to
receive the most amount of VC funding as a technology group.
There were 56 different VC investors
that participated in the 34 deals. Venture capital firms that recorded multiple
rounds included Black Coral Capital and Firelake Capital Management.
The United States continued to be the dominant country for VC investments,
accounting for about 80 percent of all VC funding in the first quarter.
For a complete list of Q1
2012 transactions in the solar sector, visit: http://mercomcapital.com/cleanenergyreports.php
Correction: In the April 9 press release, other significant M&A transactions
included the Andrem Power’s $274 million
acquisition of 3W Power (a holding company of AEG Power Solutions). However, the deal was said to have halted due to the German Federal Financial Supervisory Authority (BaFin)
prohibiting the publication of the offer document filed by Andrem