23 Jan Solar industry experiences considerable rise in corporate funding
A new report has highlighted that corporate funding for the solar industry, including venture capital (VC), public market investments and debt financing, increased by 42% year-on-year, exceeding $34 billion.
Mercom Capital Group, a global specialist in clean energy consulting, released its annual report detailing funding and merger and acquisition activities within the solar industry last year. Based on the report findings, venture capital funding in 2023 totalled $6.9 billion, spanning 69 deals. While the figures for participating VC investors declined slightly, public market financing experienced a significant increase, reaching $7.4 billion across 22 deals, representing a 45% increase compared to 2022.
Raj Prabhu, the CEO of Mercom Capital Group, explained that solar investments have continued to defy people’s beliefs. Despite rising interest rates and a disruptive market, corporate funding in the industry reached its highest level in a decade. Supported by the Inflation Reduction Act, the global focus on energy security, and supportive policies, solar continues to attract considerable investments worldwide.
The solar industry experienced 96 mergers and acquisitions (M&A) transactions, a decrease from the 128 recorded in 2022. Large-scale solar project acquisitions totalled 231 in 2023, declining from 268 in the previous year.
Q4 2023 was a positive period, with more than 13.7 GW of solar projects, a significant increase compared to the 6.2 GW acquired in Q3 2023. During 2023, project developers and independent power producers (IPPs) become the most dominant acquirers, securing about 16GW of solar projects. Closely following, investment companies and infrastructure funds acquired 10.5GW, while utilities completed transactions for nearly 8GW of solar projects.
The financial patterns in 2023 suggest continued support for the solar industry, paving its way towards a transformative period in renewable energy.
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