72% increase in venture capital funding in solar energy sector
CHENNAI: Global venture capital (VC) funding into the solar energy sector in the second quarter of 2014 increased 72% to $432 million in 21 deals, from $251 million in 26 deals in the first quarter of the year, according to a report by Mercom Capital Group, a global clean energy communications and consulting firm.
The largest VC/PE deal during the quarter was a $150-million raise by Sunrun, a provider of residential solar-power systems. Investors included Foundation Capital, Accel Partners, Sequoia Capital, Madrone Capital and others.
Sunnova Energy, another provider of residential solar services, raised $145 million. Other large deals included a $72.5 million funding raised by residential solar installer Sungevity, a $15-million deal by Siva Power (formerly Solexant), a manufacturer of CIGS solar modules, and a $14.2 million deal by Brite Energy Solar, a provider of residential and commercial solar services.Simpa Networks, a distributed energy solutions provider, which raised $2.2 million in funding and AK Surya PowerMagic, a provider of solar-based irrigation services for farmers, which raised about $0.5 million in funding from Intellecap Impact Investment Network (Icube-N) and Infuse Ventures, IIM Ahmedabad’s clean-tech focused fund, were two Indian companies which received large VC funding this quarter.
“It was a solid quarter for the solar sector in terms of fundraising. VC funding was up, public markets remained strong and we are seeing new and innovative financial structures. Residential/commercial solar funds continue to raise record amounts,” Raj Prabhu, CEO of Mercom Capital Group, said in a statement from the company.
Third-party residential and commercial solar funds continued to attract significant attention, with more than $1.3 billion raised during the quarter. SunPower topped the list, raising $492 million in three different funds, and its investors included Google, Admirals Bank and Hannon Armstrong Sustainable Infrastructure Capital.
There were 33 large-scale project funding deals totaling $3.5 billion during the quarter, which included a $820-million funding raised by Megalim Solar Power for a 121 MW project in Israel, Tenaska’s $450 million raise for the development of the 150 MW Tenaska Imperial Center West solar project in California, a $290-million raise by First Solar for its 141 MW Luz del Norte solar project in Chile, a $190-million raise by SunEdison for the 72.8 MW Maria Elena solar project in Chile, and a $142-million raise by Abengoa for its 100 MW XiNa Solar One CSP project in South Africa.
In India, Welspun Renewables Energy, a renewable energy project developer, raised $24 million from GE Energy Financial Services for a 151 MW solar PV project in the state of Madhya Pradesh, and CaptureSolar Energy, a solar project developer, raised $125 million from PG Concept, a Cyprus-based PV solutions provider, for a 75 MW solar PV project in Pune, Maharashtra.
The quarter also saw 25 corporate mergers acquisitions (MA) transactions in the solar sector, down from 38 transactions in the first quarter.
The largest disclosed MA transaction by dollar amount was the $350-million acquisition of Silevo, a solar cell and PV module manufacturer, by SolarCity.
This was followed by the $29 million acquisition of Zhejiang Ruixu Investment Company, a solar project development company and wholly-owned unit of ReneSola, by Jiangsu Akcome Solar Science Technology Company.
Jun Yang Solar Power Investments, an independent power producer, acquired the remaining 32.1 percent of Jun Yang Holdings, from Sun Reliant International, a wholly owned subsidiary of Hanergy Solar, for $14 million.
RBI Solar, a provider of solar mounting systems, acquired Renusol, a subsidiary of Centrosolar Group, for $3.5 million, the statement said.
Project acquisitions during the quarter totaled $229 million in 34 transactions with 1.1 GW changing hands. The top disclosed project acquisition by dollar amount was Foresight Solar Fund Limited’s acquisition of SunEdison’s 17.8 MW Castle Eaton solar project in Castle Eaton, UK, for $37.6 million.
This was followed by the sale of the 19.5 MW Great Glemham solar project in Suffolk, UK, by BayWa to Allianz Renewable Energy Fund, an Allianz Capital Partners fund, for $35.7 million. Bluefield Solar Income Fund, an investment company focusing on large scale agricultural and industrial solar assets, acquired the 17.5 MW Hertfordshire solar projects from Solarcentury for $32.5 million, and ContourGlobal, an independent power producer, acquired a 5 MW solar portfolio in Italy from Sorgenia Solar for $27.5 million.
Rounding out the Top 5 was another transaction from Foresight Solar Fund Limited, which acquired the 12.2 MW Highfields solar project in Essex, UK, for $26.3 million from SunEdison.
Overall global corporate funding in the solar sector, which includes venture capital (VC), private equity (PE), debt financing, and public market financing raised by public companies, however, fell to $6.3 billion in the second quarter of 2014, compared with $7 billion the first quarter of the year.