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$600 Million in VC Funding for Solar in 2013, Strong Public Market Financings,

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Posted: Jan 7, 2014 7:04 AM

Updated: Jan 7, 2014 7:04 AM

AUSTIN, TX -- (Marketwired) 01/07/14 -- Mercom Capital Group, llc, a global clean energy communications and consulting firm, released its report on funding and merger and acquisition (M&A) activity for the solar sector in 2013.

Global venture capital (VC) investments dropped 40% to $600M in 97 deals in 2013 compared to $992M in 106 deals in 2012. Total corporate funding into the solar sector, encompassing VC, debt and public market financings, was up 25% in 2013 to almost $10B, compared to 7/8$8B in 2012.

VC funding in Q4 2013 totaled $87M in 24 deals compared to $197M in 28 deals in Q3 2013.

Figure: Solar VC Funding Q4 2013

Since mid-2012, the new normal for VC funding has been smaller funding quarters and smaller deal sizes. "While venture funding levels were down, overall fundraising was up and public market financings were really strong in 2013," said Raj Prabhu, CEO of Mercom Capital Group. "Higher valuations among public solar companies have opened up the capital markets again as an avenue for fundraising at attractive terms. IPOs are back."

Solar downstream companies saw the largest amount of VC funding in 2013 with $262M in 34 deals, accounting for 45% of venture funding. Investments in CSP reached $109M in 12 deals and PV companies were close behind with $104M in 17 deals. Thin film saw a 77% drop in funding from 2012, with $72M in 2013 compared to $314M in 2012.

The Top 5 VC-funded companies in 2013 were Chinese solar project developer Heifei Golden Sun Technology, which raised $69M; followed by Clean Power Finance, a provider of third party financing for distributed PV projects, which raised $62M; Solexel, a developer of high-efficiency crystalline silicon solar modules, brought in $55M; Sungevity, a provider of residential solar installations, raised $43M; and OneRoof Energy, a developer and operator of residential solar energy generation systems, raised $30M.

The most active investor in terms of deal numbers was New Enterprise Associates, investing in three companies. They were also the top investor in 2012 with four deals. This was followed by Kleiner Perkins Caufield & Byers, PACA Investment, Firelake Capital Management, CCM US, and VisionRidge Partners all investing in two companies each.

Public market financings jumped considerably to $2.8B in 39 deals in 2013, up from just $893M in 23 deals in 2012. In 2013, there also were seven IPOs that together brought in more than $1B.

Large-scale project funding announced in 2013 totaled $13.6B in 152 deals, compared with $8.7B in 84 deals in 2012. Announced large-scale project funding in Q4 2013 jumped as well, with $6B in 46 deals.

Figure: Solar Top 5 Large-Scale Projects Funded in 2013

Residential/commercial lease funds showed strong growth in 2013, with 22 announced funds totaling $3.34B, a 69% increase over 2012. Almost $1B was raised in Q4 2013 alone. Vivint Solar, SolarCity, Sunrun, SunPower, and SunEdison were top fundraisers in 2013.

Q4 2013 was a very active quarter for large-scale project development around the globe. Mercom tracked 7/8220 project announcements totaling 7/89 GW in Q4.

Corporate M&A activity in solar totaled $12.7B in 81 transactions compared to $6.7B in 51 transactions in 2012. M&A activity was up 59% in 2013, largely driven by strategic acquisitions and acquisitions of distressed assets.

Figure: Solar Top 5 M&A Transactions in 2013

Solar project M&A amounted to $1.7B in 2013, compared to $1.9B in 2012. Activity was up 20% Y-o-Y, with 112 transactions in 2013, compared to 80 transactions in 2012. Good solar projects with sound economics are in great demand.

Announced debt funding in 2013 totaled $6.2B in 38 deals, compared with $6.9B in 34 deals in 2012, and nearly $20B in 41 deals in 2011. For the first time since 2010, debt raised by non-Chinese companies exceeded those raised by Chinese companies via Chinese banks.

To learn more about the report, visit: http://store.mercom.mercomcapital.com/products-page/solar-reports/2013-solar-annual-and-q4-funding-report/

About Mercom Capital Group Mercom Capital Group, llc, is a global communications and consulting firm focused exclusively on clean energy and financial communications. Mercom's consulting division advises cleantech companies on new market entry, custom market intelligence and overall strategic decision making. Mercom's communications division helps clean energy companies and financial institutions build powerful relationships with media, analysts, government decision makers, local communities and strategic partners. For more information about Mercom Capital Group, visit: http://www.mercomcapital.com.

Public Relations Contact: Wendy Prabhu Mercom Capital Group Tel: 1.512.215.4452 E-mail: info@mercomcapital.com

Topics: MercomCapita

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