Global Corporate Funding In Solar Sector At $5.3 Billion In First Half Of 2018

A SolarCity Corp. employee carries a solar panel on the roof during installation at a home in Kendall Park, New Jersey, U.S. (Photographer: Michael Nagle/Bloomberg)

Total global corporate funding in solar sector touched $5.3 billion in the first half of this year, up 15 per cent over last year, amid uncertainty in the industry due to Trump tariffs and the Chinese subsidy pullback, said consulting firm Mercom Capital Group.

Corporate funding, including venture capital, public market, and debt financing, in the solar sector was $4.6 billion in the January-June period of 2017.

“The first half of 2018 has been a roller-coaster for the solar industry marked by uncertainty due to Trump tariffs followed by the recent Chinese subsidy pullback,” commented Raj Prabhu, chief executive officer of Mercom Capital Group.

Though financial activity was better compared to the same period last year, the market is still sorting out the winners and losers that would come out of a potential slowdown in Chinese demand, which is expected to result in an oversupply situation and eventual price crash in components across the globe.

Raj Prabhu, chief executive officer of Mercom Capital Group

On a quarter-on-quarter basis, corporate funding increased in the April-June period of this year with $2.8 billion in 34 deals compared to the $2.5 billion in 44 deals in January-March 2018.

Some of the notable Indian deals in the second quarter of this year in the debt funding segment include Sunsure Energy, a solar turnkey solutions provider, raised zero-collateral based debt capital worth $2.2 million from TATA Cleantech Capital, L&T Finance, and cKers Finance.

Among other major Indian deals, Azure Power raised $135 million in debt financing from a consortium of development finance institutions to finance around 200 MW of Azure Power's rooftop solar PV projects across India.

Meanwhile, globally there were a total of 46 solar M&A transactions in the January-June 2018, compared to 41 transactions in the same period a year ago.

Some of the noted Indian M&A deals include Hinduja Group, acquiring Kiran Energy, and ReNew Power taking over solar and wind energy project developer Ostro Energy valued at close to $1.63 billion and was supported with financing of $247 million from the Canada Pension Plan Investment Board.