India’s solar sector attracted global corporate investment of $14.5 billion in 2020, a 24 percent jump from $11.7 billion raised in 2019, clean energy communications and consulting firm Mercom Capital Group said in its annual report on funding and merger and acquisition in the sector.
Despite the uncertainties caused by the Covid-19 pandemic translating to a 25 percent drop in funding year on year in the first half of 2020, the recovery thereafter was significant, the report said.
The swift rebound has been largely driven by publicly traded solar companies, with several initial public offerings and securitization deals creating what Mercom Capital Group CEO Raj Prabhu, says is an “investment haven” in the uncertain Covid economy.
“Solar asset acquisitions were at an all-time high in a pandemic year and have become even more sought-after, especially in the uncertain COVID-19 economy” said Prabhu.
Global venture capital and private equity funding in the solar sector in 2020 came to $1.2 billion in 41 deals, compared to $1.4 billion in 53 deals in 2019
Of the total funding, nearly $1.1 billion went to 27 downstream companies. These include, India’s Ayana Renewable Power raising $390 million, followed by Silicon Ranch Corp., which brought in $225 million. Australia’s Brighte raised $76 million, Singapore’s Sunseap Group raised $72 million, and Aurora Solar and Zero Mass Water tied for fifth, each raising $50 million.
Of the remaining VC funding, solar service providers raised $61 million, PV companies raised $17 million, balance-of-system companies brought in $15 million, thin-film technology companies raised $15 million, and concentrated photovoltaic companies raised $5.5 million.
As per the report, the year also saw acquisition of 39.5 Gigawatt (GW) of large-scale solar projects as compared to 26.1 GW in 2019.
It is also the largest amount of projects acquired in a single year to date. The capacity came from 231 large-scale project acquisitions in 2020, compared to 192 such transactions in 2019.
Besides, 2020 saw 62 mergers and acquisitions deals, most of which involved downstream companies. The largest transaction in 2020 was made by Sunrun’s $3.2 billion, all-stock acquisition of Vivint Solar.
Debt financing came to $8.3 billion in 2020, a 6.4 percent increase over 2019. Eight securitization deals totalling $2.2 billion were recorded in 2020, which according to Mercom is the largest amount of securitization financing ever in a year.
As per the report, public market financing also saw an exponential rise, up 101 percent with $5.1 billion in 2020. Array Technologies raised $1.2 billion in its initial public offering in the fourth quarter of 2020.