Funding and M&A activity for the solar sector in 2020

“Following a tough first half when corporate funding was down 25% year-over-year, recovery has been swift and broad, with corporate funding up 24% for the year. Publicly-traded solar companies had an unprecedented year. The solar ETF was up 225%, with 15 solar stocks up over 100% in 2020. Public market funding was also up with the help of several IPOs, and debt financing was up on the back of securitization deals. Solar asset acquisitions were at an all-time high in a pandemic year and have become even more sought-after as an investment haven, especially in the uncertain COVID economy,” said Raj Prabhu, CEO of Mercom Capital Group.

Key findings

Total corporate funding, including venture capital (VC) funding, public market, and debt financing into the solar sector, was up by 24 per cent totalling $14.5 billion from 114 deals in 2020.

In 2020, Global Venture Capital funding for the solar sector came to $1.2 billion in 41 deals, a 14 per cent decrease compared to $1.4 billion in 53 deals in 2019.
Public Market Financing activity in 2020 came to $5.1 billion in 27 deals compared to $2.5 billion in 18 deals in 2019.
There were three IPOs in 2020 that raised a total of $1.3 billion compared to six IPOs in 2019 that raised $1.3 billion.
In 2020, announced Debt Financing increased by 6.4 per cent with $8.3 billion in 46 deals, compared to $7.8 billion raised in 46 deals during 2019.
Announced large-scale project funding came to $18 billion in 167 deals in 2020 compared to $16.1 billion in 152 deals in 2019.

Merger and Acquisition (M&A) activity in the solar sector was flat, with 62 transactions in 2020 compared to 65 transactions in 2019.
There were 20 solar M&A transactions in Q4 2020, compared to 17 solar M&A transactions in Q3 2020.
There were 231 large-scale solar project acquisitions in 2020 compared to 192 transactions in 2019.
There were 83 large-scale solar project acquisitions in Q4 2020 compared to 57 transactions in Q3 2020.
39.5 GW of large-scale solar projects were acquired in 2020.
Over 15 GW of solar projects were acquired in Q4 2020.
Project Developers and Independent Power Producers were the most active acquirers in Q4 2020, buying 10.7 GW of solar projects, followed by Investment Firms which acquired almost 3.8 GW of solar projects.