Total corporate funding in the global solar sector, encompassing venture capital (VC), public market, and debt financing deals, reached USD 16.6 billion (EUR 15.25 billion) in the first half of 2024, marking a 10% year-on-year decrease, according to data from Mercom Capital Group's latest Solar Funding and M&A report. The report compiled figures from 258 companies and investors, highlighting 87 transactions recorded from January to June 2024, up from 80 deals in the same period last year.
“Financing activity in the solar sector remains restrained despite tailwinds from the Inflation Reduction Act and favorable global policies,” noted Raj Prabhu, CEO of Mercom Capital Group. He attributed the sector's subdued performance to challenges such as high interest rates, trade barriers, supply chain disruptions, and the impact of the US presidential elections on development and investment decisions.
Global VC funding in the first half of the year declined by 29% year-on-year to USD 2.7 billion raised across 29 deals, with significant investments from solar downstream companies totaling USD 2.5 billion. Pine Gate Renewables led with a USD 650 million raise, followed by Nexamp with USD 520 million.
Public market financing for solar projects amounted to USD 1.7 billion in eight deals, down 75% from the previous year, while solar debt financing surged by 53% to USD 12.2 billion, marking the highest six-month level in a decade.
Mergers and acquisitions (M&A) activity in the sector also slowed, with 40 deals reported compared to 48 in the first half of 2023. Despite these challenges, project acquisitions involving 18.5 GW of solar capacity occurred, with developers and independent power producers (IPPs) accounting for a significant portion of the transactions in the second quarter.
