Intersect Power

Jan 23, 2023

BIPV installation. Author: James Cridland. Total corporate funding in the global solar sector, including venture capital (VC), public market and debt financing deals amounted to USD 24.1 billion (EUR 22.18bn) in 2021, marking a 13% year-on-year drop in annual terms. The figures were released last week in a report by consultancy Mercom Capital Group. According to the statistics, while the value of deals decreased, their number was 20% more than in the previous year. Demand for solar power was spurred on a global level mainly due to the war in Ukraine and the passage of the Inflation Reduction Act in the US. “In 2022, we saw record venture capital and private equity funding; solar companies were acquired in record numbers; and solar projects saw its second best year for acquisitions,” said Raj Prabhu, CEO of Mercom Capital Group. Nevertheless, he noted that the higher interest rates have already started to debt financing in the solar sector. Global VC funding in the past year rose by 56% on the year to the record USD 7 billion raised in 90 deals, with 21 of them worth more than USD 100 million each. Solar downstream companies were the major contributor to the increase, accounting for 84% of the total with USD 5.9 billion raised. Solar photovoltaic (PV) companies secured USD 864 million in funds, while companies focused on balance of system (BOS) works obtained USD 83 million. The top players were clean energy firm Intersect Power LLC, which secured USD 750 million in growth equity capital from TPG's global impact investing platform and others, followed by Longroad Energy and Yellow Door Energy with raisings of USD 500 million and USD 400 million , respectively. Solar public market financing in 2022 came at USD 5.1 billion, down 32% in annual terms, and debt financing activity slipped by 24% to USD 12 billion. Meanwhile, the merger and acquisition (M&A) activity improved and included 128 solar corporate M&A transactions, which was the highest reached since 2010. A total of 66 GW of projects saw a change of their ownership in the past year, with project developers picking up 35.7 GW of the total. (USD 1.0 = EUR 0.920)