Dive Brief:

• Corporate funding of the global solar sector in 2019 increased 20% year-over-year, driven primarily by 29% growth in debt financing, according to a report from Mercom Capital Group.
• Indian and Middle Eastern companies were the biggest recipients of solar venture capital investments in 2018, while mergers and acquisitions (M&A) transactions were dominated by European and North American firms, the report found.
• The $11.7 billion in corporate funding for solar raised in 2019 was up from $9.7 billion in 2018, but down from about $25 billion in 2015 and over $35 billion in 2010.

Dive Insight:

“Looking back at 2015, the majority of funding back then was coming out of China as government-owned banks were financing local Chinese companies to ramp up manufacturing,” Mercom CEO Raj Prabhu said in an email to Utility Dive, noting that China was responsible for $11 billion in debt financing in 2015 alone.

Now, America is the leading source of borrowing in the solar industry. In 2019, global debt financing for solar was $7.8 billion from 46 deals, compared to $6 billion from 53 deals in 2018. A significant chunk of that funding was from eight securitization deals worth a combined $1.6 billion, the Mercom report said.

Those securitization deals were primarily done by borrowers in the U.S., and American borrowers accounted for 65% of the $7.8 billlion in debt activity, according to Prabhu.

Meanwhile, global venture capital for solar grew from $1.3 billion in 2018 to $1.4 billion in 2019, and public market funding increased from $2.3 billion to $2.5 billion.

“Solar equities also had a great year with six solar IPOs around the world. These notable metrics, along with robust debt financing activity, including securitization deals, rounded off a strong year for the sector,” Prabhu said in a press release.

India-based wind and solar project developer ReNew Power was the top target for VC investment identified by the report, with $300 million raised from Goldman Sachs, the Abu Dhabi Investment Authority and the Canada Pension Plan Investment Board. The second and third-biggest VC recipients were Hero Future Energies and Avaada Energy, also located in India, followed by Yellow Door Energy, a Dubai-based C&I-scale solar developer and Infinity Solar from Egypt.

The biggest M&A transaction was the acquisition of Pattern Energy, headquartered in San Francisco, by the Canada Pension Plan Investment Board for $6.1 billion, followed by Italian firm ERG’s purchase of Italian solar developer Perseo for $255 million and National Grid plc’s purchase of Geronimo Energy for $100 million.