The global solar market is currently upbeat and solar equities rebounded strongly in the first quarter but China is still a wild card
New Delhi: Total corporate funding — including venture capital funding, public market, and debt financing — into the solar power sector in the first quarter of 2019 (Jan-March) stood at $2.8 billion, 10 percent higher as compared to $2.5 billion recorded in the same period last year.
“Funding levels were up slightly year-on-year in Q1 2019 but the solar industry was on a much stronger footing at the beginning of this year compared to a year earlier, when the industry was hit with tariffs, subsidy and installation cuts in China, and a module oversupply situation,” said Raj Prabhu, Chief Executive Officer (CEO) of clean energy consultancy firm Mercom Capital Group.
He also said that the global solar market is currently upbeat and solar equities rebounded strongly in the first quarter. “However, China is still a wild card and depending on its 2019 policy direction, it could have a significant impact on the solar industry,” Prabhu added.
Global VC funding for the solar sector in the first quarter of 2019 totalled $176 million in 13 deals, compared to $161 million raised in 22deals in the corresponding period last year. The majority of VC funding raised in the quarter went to solar downstream companies with $111 million in seven deals.
The top VC deals in the first quarter of 2019 included $65 million raised by Yellow Door Energy, $41 million raised by Oxford PV, $37 million secured by BBOXX in two funding deals, $20 million raised by Aurora Solar, and PEG Africa’s $5 million deal. A total of 28 VC investors participated in solar funding in the Jan-March period of 2019.
Solar sector’s public market financing stood at $247 million in 3 deals in Q1 2019 compared to $103 million raised in 4 deals in Q1 2018. Ginlong (Solis) Technologies had a rare solar IPO in the last quarter. Also, announced debt financing came at $2.35 billion in 19 deals during the first quarter of this year compared to $2.3 billion in 18 deals in the same period of 2018.
The announced large-scale project funding in the first quarter of 2019 touched a record high with $5.68 billion in 43 deals compared to $2.8 billion in 47 deals during Q4 2018. Around $2.7 billion was raised in 57 deals in Q1 of 2018.
According to Mercom, Mergers and Acquisitions (M&A) activity in the sector was steady with 18 solar transactions in Q1 2019 compared to 19 transactions in Q1 2018. Led by investment firms, about 5.9 Gigawatt of solar projects were acquired in Q1 2019 compared to 4.8 GW in Q4 2018 and 7.7 GW in Q1 2018.
The firm said there were 18 investment firms and funds that acquired 20 projects in Q1 2019, totalling 3.5 GW, followed by fourteen Utilities and IPPs which picked up 19 projects totalling 1.15 GW. Also, 13 project developers acquired 14 projects for 803 MW during the quarter.
News Source: ET Energyworld