Project acquisitions soar during solid H1 for global solar funding

Solar project acquisitions reached a record high in Q2, Mercom Capital Group said. Image: Lightsource BP.

Corporate funding in the global solar sector in the first half of 2021 was up almost threefold year-on-year, according to a new report from Mercom Capital Group.

The consultancy said funding reached US$13.5 billion in H1 2021 compared to US$4.6 billion in the same period last year, when the market was severely affected by the coronavirus pandemic. For 2020 as a whole, corporate funding was US$14.5 billion.

While Q2 funding was down 33% sequentially to US$5.4 billion, solar project acquisitions reached a record high in the most recent quarter. The largest such deal covered by PV Tech in the second quarter saw BP announce an acquisition of 9GW of US solar projects from developer 7X Energy.

Solar project acquisitions in 1H 2021 reached 39.3GW compared to 14.7GW purchased in the same period last year.

The transition from fossil fuels to renewables as well as environmental, social and corporate governance investing trends impacted mergers and acquisitions (M&A) activity in the first half of 2021, said Mercom Capital CEO Raj Prabhu.

“Corporate M&A activity was up significantly, with solar developers expanding their pipelines, oil and gas companies diversifying into renewables and funds buying up renewable assets,” he said.

According to Mercom, the 54 solar M&A transactions in 1H 2021 was more than double the same period last year, while venture capital funding reached US$1.6 billion from 26 deals, up on the US$210 million that went into 14 deals in the first half of 2020.

The top venture capital deals in 1H 2021 included the US$800 million raised by Loanpal, a point-of-sale platform for sustainable home solutions that has since rebranded to GoodLeap; the US$250 million secured by software provider Aurora Solar; and the US$127 million raised by renewables developer Intersect Power.

Announced debt financing activity in H1 2021 reached US$8.2 billion from 32 deals, an increase on the first half of 2020 when US$3.7 billion was raised in 17 deals.

Spurred by low interest rates, a record US$2 billion was raised through seven securitisation deals in 1H 2021, Mercom said, while solar public market funding in H1 2021 saw US$3.7 billion raised in 13 deals compared to US$758 million in six deals in the first half of 2020.