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Total corporate financing for the solar sector reached $22.3 billion in the first nine months of 2024, down 23% year-on-year. Mercom Capital Group says global uncertainties are affecting investor confidence, but increased debt financing and recently announced resilience in large-scale project financing are bright spots for the sector.
Total corporate financing in the solar sector stood at $22.3 billion through the first nine months of 2024, according to figures from Mercom Capital Group.
The total figure, which includes venture capital/private equity, public market and debt financing, represents a 23% year-over-year decline compared to the first nine months of 2023, when $28.9 billion was raised. The number of deals is also down 6% year-over-year, with 117 deals in the first nine months of 2024 versus 124 deals in the first nine months of 2023.
The year-to-date result is largely due to a 39% year-over-year decline in private equity solar funding, which has reached $3.5 billion in 39 deals so far this year, and a 71% year-over-year decline in public market solar funding, which stands at $2.1 billion in 10 deals this year to date.
But the surge in debt financing reverses this years downward trend. Mercom reported $16.7 billion raised in 68 deals in the first nine months of 2024, compared with $16 billion raised in 54 deals in the first nine months of 2023.
Raj Prabhu, CEO of Mercom Capital Group, said the solar sector is grappling with significant fiscal uncertainties.
“Regulatory concerns around anti-dumping and countervailing duties and tariffs, US Section 45X guidance, potential policy changes due to election outcomes, unpredictable global trade policies, supply chain disruptions, higher costs, tight labor markets and continued project delays have dented investor sentiment and delayed key investment decisions,” Prabhu said. “While the recent 50 basis point rate cut is encouraging, the market needs more clarity and direction on future rate cuts to trigger a revival of investment momentum.”
Despite the decline in global funding, Mercom Capital Groups analysis adds that announced funding for large-scale projects is showing resilience this year, reaching $34.3 billion in the first nine months of 2024, up from last year.
Mercom Capital Group also recorded 62 M&A transactions executed in the first nine months of 2024, compared to 75 in the first nine months of 2024.
In the first nine months of 2024, almost 28.3 GW of solar projects were acquired, compared to 31.6 GW in the first nine months of 2023. The number of projects acquired in the first nine months of both years was the same, 166. |
