Residential/commercial funds bring in $1.36 billion
in Q2 2016, debt and public market financing slump continues
Mercom 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 second quarter of 2016.
To learn more about the
report, visit: http://bit.ly/MercomSolarQ22016
Total corporate funding,
including venture capital funding, public market and debt financing into the
solar sector in Q2 2016 fell to $1.7 billion this quarter, a 41 percent drop compared to the $2.8 billion
raised in Q1 2016. Year-over-year total corporate funding was down
significantly compared to $5.9 billion in the second quarter of last year.
“The solar industry
continues to experience weakness in terms of financing activity, and corporate
funding in Q2 2016 was at its lowest level in three years,” said Raj Prabhu,
CEO and Co-Founder of Mercom Capital Group.
Global solar VC funding (including
private equity) saw a large decline this quarter with $174 million in 16 deals
compared to $406 million in 23 deals in Q1 2016. Year-over-year (YoY) VC numbers
were slightly better compared to Q2 2015 with $142 million in 24 deals.
Solar downstream companies raised
the most (64 percent) VC funding in Q2 2016 with $112 million in seven deals. A
large part of the total came from the $100 million raised by Silicon Ranch from
private equity firm Partners Group.
Other VC deals this quarter
included the $20 million raised by Tigo Energy, 1366 Technologies’ $15 million raise,
and the $12.5 million raised by Sol Voltaics. A total of 21 VC investors
participated in funding deals.
Solar public market
financing in Q2 2016 came to $179 million in four deals compared to $94 million
in four deals in the first quarter of
2016 and $2.3 billion in 12 deals in Q2 2015.
Announced debt financing
came to $1.3 billion in 12 deals in Q2 2016 compared to $2.3 billion raised in
19 deals in Q1 2016 and $3.4 billion in 14 deals in Q2 2015.
The top large-scale project funding deal in Q2 2016
was the $588 million secured by Engie for its 100 MW Kathu CSP solar project
located in Northern Cape Province of South Africa. Connor, Clark & Lunn
Infrastructure, Samsung Renewable Energy and Six Nations of the Grand River
Development secured $482 million for their 100 MW Grand Renewable solar
project. DE Shaw Renewables received a $226 million syndicated loan for its 100
MW North Star solar project. Suzhou GCL
New Energy secured a loan of $200 million for the construction of Hubei
Jiangling Sanhu solar project and Hefei Changfeng Mingcheng Reservoir solar
projects (60 MW). Mytrah secured a $175 million loan for the development of a
portfolio of solar and wind projects in the company's pipeline.
It was a good quarter for residential
and commercial solar funds, led by SolarCity, Mosaic, and Sunnova Energy, with
$1.36 billion in 11 deals in Q2 2016, a 36 percent increase over the $1 billion
raised in six deals in Q1 2016. Of the $1.36 billion announced in Q2 2016, $800
million went towards the lease model and $555 million went to loan funds. Since
2009, almost $20 billion has gone into residential/commercial solar funds.
There were 17 solar M&A
transactions in the second quarter of 2016 compared to 14 in Q1 2016. Almost
half of the M&A transactions involved solar downstream companies with eight
deals, which was followed by BOS companies with five.
Sungevity announced a merger
with Easterly Acquisition Corp, a blank check company traded on Nasdaq in a
deal valued at $357 million.
There were 38 large-scale
solar project acquisitions (13 disclosed for $1.9 billion) in Q2 2016, compared
to Q1 2016 with 50 transactions (22 disclosed for $1.2 billion). More than 2 GW
of solar projects were acquired in the second quarter compared to the 2.4 GW in
the previous quarter.
The largest disclosed
project acquisition by dollar amount in Q2 2016 was the $1.4 billion acquisition
of 1,140 MW (solar 994 MW and wind 146 MW) renewable energy project pipeline of
Welspun Renewables Energy by Tata Power Renewable Energy, a Tata Power
subsidiary. NextEnergy Solar Fund, a UK-based investment fund, acquired a
portfolio of five solar projects totaling 84.3 MW for $140 million. United PV
(Changzhou) Investment, a wholly owned subsidiary of United Photovoltaics
Group, acquired a 99 percent equity interest in Guodian Wulateqianqi
Photovoltaics Power from Forty-eighth Research Institute of China Electronics
Technology Group for $75 million, which gave them a 50 MW solar project located
in Inner Mongolia. 8point3 Energy Partners, a yieldco formed by First Solar and
SunPower acquired an interest in the 40 MW Kingbird solar project located in
Kern County, California, from First Solar, for $60 million. Sky Capital
America, a wholly owned U.S. subsidiary of Sky Solar, acquired 22 operating
solar projects in California and one operating solar project in Massachusetts
for a combined 22 MW from Greenleaf-TNX and SunPeak Universal Holdings for $57
Mercom also tracked 196 new large-scale
project announcements worldwide in Q2 2016 totaling 11.3 GW.
Mercom Capital Group
Mercom Capital Group, 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 covering Solar Energy and Smart Grid. Our
reports provide timely industry happenings and ahead-of-the-curve analysis
specifically for C-level decision making. Mercom’s communications division
helps clean energy companies and financial institutions build powerful
relationships with media, analysts, government decision makers, local
communities and strategic partners. For more information about Mercom Capital
Group, visit: http://www.mercomcapital.com.
To get a copy of Mercom’s popular market intelligence reports, visit: http://mercomcapital.com/market_intelligence.php.