VC funding up, debt financing up, public market
learn more about the report, visit: http://bit.ly/MercomSolarQ32015
Capital Group, llc, a global clean energy communications and consulting firm,
released its report on funding and merger and acquisition (M&A) activity
for the solar sector in the third quarter of 2015.
global corporate funding in the solar sector, including venture capital/private
equity (VC), debt financing, and public market financing raised by public
companies, came to $6.2 billion, compared to $5.9 billion in Q2 2015.
Prabhu, CEO of Mercom Capital Group, commented, “The third quarter of 2015 has
been eventful, especially in the equity markets. Although solar power demand
continues to grow, solar stocks have made a complete U-turn in the last three
months, affecting public market financing, which was down by about a billion
dollars excluding IPOs.”
VC funding increased to $257
million in 15 deals, compared to $142 million in 24 deals in Q2 2015. Solar
downstream companies continued to draw most of the VC investments with $114
million in seven deals.
the Top 5 VC deals in Q3 2015, the largest was the $105
million raised by Silicor Materials, a manufacturer of high-quality solar
silicon and aluminum by-products, followed by the $80 million raised by Sunlight
Financial, a provider of financing for the residential solar market. Two
companies raised $25 million each this quarter; Alcazar Energy, an independent
developer and power producer focused on renewable energy generation and Ampt, a
provider of power conversion technologies for solar PV systems. Completing the
Top 5 was HiQ Solar, a designer and manufacturer of 3-phase solar PV inverters,
which raised $11 million.
A total of 21 investors
participated in Q3 2015, with Infuse Ventures and Hudson Clean Energy Partners investing
in three and two deals respectively.
financing fell to $1.8 billion compared to $2.3 billion in Q2 2015. There were
three IPOs this quarter: TerraForm Global, a yieldco subsidiary of SunEdison,
raised $675 million and Sunrun, a U.S.-based residential solar company, raised
$250.6 million and listed on Nasdaq. Grenergy Renovables, a Spanish solar
project developer and an independent power producer, raised $4.2 million and listed
on the Spanish Mercado Alternativo Bursatil (MAB).
falling out of favor, their fundraising in the public markets fell by half this quarter to $802 million,” commented Prabhu.
Debt financing saw an uptick this quarter
with about $4.1 billion, compared to $3.4 billion in Q2 2015. Chinese companies
dominated debt financing activity, raising more than $2.9 billion compared to
$1.4 billion in Q2 2015. There were three securitization deals announced in Q3,
totaling $335 million, by Solar City, SunRun and AES.
Announced large-scale project funding totaled
$2.5 billion in 23 deals, while Q2 2015 saw $1.9 billion in 26 deals. The Top 5 large-scale project funding deals included the $400 million
debt financing secured by SolarReserve, a solar project developer, and ACWA
Power, a developer and operator of water and power projects, as an investment
guarantee, from the Overseas Private Investment Corporation for its 100 MW
Redstone CSP Tower Project in Northern Cape, South Africa. Recurrent Energy, a
solar project developer and a wholly owned subsidiary of Canadian Solar, a vertically
integrated manufacturer of silicon ingots, wafers and PV cells and modules, followed
with $337 million secured in construction and term debt facility for its 200 MW
Tranquility Solar Project in California, from NORD/LB, Rabobank, Santander, KeyBanc,
CIT and CIBC. Recurrent Energy also raised $266 million in project financing
for its 100 MW Mustang Solar Project located in California, from Santander Bank
and U.S. Bancorp Community Development Corporation. SunEdison, a solar energy
services and technology provider, received $253 million in project financing
for its 156 MW Comanche solar project in Pueblo, Colorado.
Aloe Energy, an
owner and operator of renewable energy projects in France, secured $223.5 million
in debt refinancing for its nine PV projects with a combined capacity of 69.3
MW, from Credit Agricole Corporate & Investment Bank, Siemens Bank and
Societe Generale. The projects are owned by its subsidiary Delta Solar.
After two record quarters, residential and
commercial solar funds announced in Q3 2015 dropped to $997 million in five
deals. Out of $997 million in residential and commercial funds announced this
quarter, $777 million went into the lease/PPA model and $200 million was for
loan products. SolarCity raised the most funding for the quarter, bringing in
$400 million. In Q2 2015, residential and commercial solar funds raised nearly $2
billion in five deals. Year-to-date, $4.8 billion has been raised, already
exceeding the $4 billion in all of last year.
were 22 corporate M&A transactions in the solar sector in Q3, compared to 17
transactions in Q2 2015. Solar
downstream companies accounted for most of the M&A transactions with 12.
largest disclosed M&A transactions by dollar amount was led by the $2.2 billion
acquisition of Vivint Solar, a provider of residential solar systems, by SunEdison,
followed by the $1 billion acquisition of an 80 percent stake in Gestamp Asetym
Solar, a solar PV developer and operator, from Gestamp Renewables by KKR, an
investment firm. Flextronics International, a provider of design, engineering,
manufacturing, real-time supply chain insight and logistics services, acquired
NEXTracker, a solar tracking solution provider, for $330 million. ENGIE
(formerly GDF Suez), an electric utility, acquired a 95 percent stake in
Solairedirect, a solar project developer, for $222 million. Opera Investments,
an investment firm formed for the purpose of acquiring a company, business,
project or asset in the natural resources sector, acquired SoloPower Systems, a
module manufacturer, from Hudson Clean Energy, a U.S.-based private equity and infrastructure
firm, for $220 million.
were 42 large-scale solar project acquisitions totaling $1.2 billion with about 3.9 GW changing hands, compared
to 66 transactions in Q2 2015 for $2.9 billion. The
top disclosed project acquisition by dollar amount was the $320 million acquisition
by utility company Dominion of 50 percent of the cash equity and 99 percent of
the tax equity in the 265 MW Three Cedars Solar Project from SunEdison. Abengoa
Yield acquired the Solaben 1 and 6 solar projects with a combined capacity of
100 MW in the Extremadura region of Spain for $304 million from Abengoa.
SunEdison acquired a 33 percent stake in a 425 MW portfolio of solar assets
from Dominion Resources, an electric utility, for $300 million. United
Photovoltaics Investment acquired a 100 MW solar project from Hubei Jingtai
Photovoltaics Power for $137.1 million. SunPower acquired 1.5 GW of the U.S.
solar project pipeline from Infigen Energy, an Australia-based renewable energy
project developer, for $37.9 million.
also tracked 346 large-scale project announcements worldwide in Q3 2015 totaling
About Mercom Capital Group
Capital Group, llc, is a global communications and consulting firm focused
exclusively on clean energy and financial communications. Mercom’s consulting
division advises cleantech companies on new market entry, custom market
intelligence and overall strategic decision making. Mercom’s consulting
division also delivers highly respected industry market intelligence reports
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text accordingly, as it is a financial advisor