Corporate solar funding slumps in Q2, Mercom says
Total corporate funding of the global solar industry slumped further in the second quarter of 2016, continuing what has been a weak year of financing for the sector, according to Mercom Capital Group.
The total amount of corporate investment into the solar industry – including public markets, debt financing, and venture-capital funding – fell to $1.7bn in the second quarter, says Mercom, a market researcher. That compares to $2.8bn of investment in the first quarter of this this year, and nearly $6bn during the second quarter of 2015.
Solar stocks remain under heavy pressure, amid ongoing weakness in energy and commodity markets and persistent concerns about the state of the global economy.
The Guggenheim Solar exchange-traded fund, which owns shares in a wide variety of solar companies around the world, from US-based SolarCity to China’s Xinyi Solar, is down more than 30% in 2016 and more than 45% in the past year.
“The solar industry continues to experience weakness in terms of financing activity, and corporate funding in Q2 2016 was at its lowest level in three years,” says Mercom chief executive Raj Prabhu.
Few solar companies made explicit plans to list shares on the public markets in the last quarter, aside from Sungevity’s recently announced merger with Easterly Acquisition Corp, a blank-cheque that values California-based Sungevity at $357m.
Total public market financing amounted to just $179m in the second quarter, compared to $2.3bn in the same quarter last year.
Meanwhile, debt financing slumped to $1.3bn, compared to $3.4bn in the year-ago period. Among the big loans secured by solar developers in recent months was a $588m package for Engie’s 100MW Kathu concentrated solar power project in South Africa, and $482m for Samsung Renewable Energy’s 100MMW Grand Renewable project in Ontario, Canada.
However, there were bright spots for the industry. Global solar venture-capital funding rebounded to $174m in the second quarter, from $142m in the year-ago period. A big chunk of that – $100m – went to Silicon Ranch in the funding it raised from private-equity firm Partners Group. Tigo Energy, 1366 Technologies, and Sol Voltaics also raised VC funding.
It was also a good quarter for residential and commercial solar funds, Mercom notes. All told distributed PV companies deepened their pools of funding by $1.36bn, led by SolarCity, Mosaic and Sunnova, with $800m earmarked for solar leases and $555m for loans.