Total global corporate funding in the solar sector, including venture capital/private equity (VC), debt financing, and public market financing, raised by public companies came to $9.1 billion in 2016, compared to $25.3 billion in 2015, a 64 per cent drop, clean energy consulting firm Mercom Capital has said.
“It was a tough year for solar companies in terms of fundraising even though demand was robust. Several factors made 2016 a volatile year for the sector,” commented Raj Prabhu, CEO and Co-founder of Mercom Capital Group.
“The Chinese module price crash, the slowdown in US rooftop solar, competitive auctions, net metering uncertainty, high debt levels and lack of profits all contributed to a challenging year across the solar supply chain. However, 2017 looks better than expected as lower module prices are expected to boost installation levels,” he further commented.
Global VC investments came to $1.25 billion in 77 deals in 2016, compared to $1.1 billion in 83 deals in 2015.
Solar downstream companies accounted for 80 per cent of the VC funding in 2016, with $985 million of the $1.3 billion raised. Investments in PV technology companies came to $97 million and thin-film companies brought in $95 million. Balance of Systems (BoS) companies raised $37 million. Service providers raised $24 million. In one deal each, the CPV category raised $10 million and the CSP category raised $2.3 million