Solar Sector Corporate Financing Falls by $7 Billion Amid Market Uncertainties
Corporate financing in the solar sector has dropped by nearly $7 billion in the first nine months of 2024, compared to the same period in 2023, according to a report from clean energy research firm Mercom Capital Partners. Global corporate funding reached $22.3 billion by the end of September 2024, down from $28.9 billion in 2023, as the total number of deals fell by 6%.
Mercom highlighted that debt financing was the only segment to see year-on-year growth, with $16.7 billion raised in 68 deals, up from $16 billion in 54 deals the previous year. However, other key areas—venture capital (VC) funding, public market financing, and mergers & acquisitions (M&A)—all experienced declines.
Raj Prabhu, CEO of Mercom Capital Group, attributed the decline in investments to “significant uncertainties” in the solar sector, including regulatory concerns, unpredictable trade policies, supply chain disruptions, and higher costs. He noted that while a recent interest rate cut is encouraging, more clarity is needed to boost investor confidence and reinvigorate the market.
VC funding, in particular, fell to $3.5 billion across 39 deals, down from $5.5 billion in 51 deals last year, while public market financing dropped sharply to $2.1 billion from $7.2 billion in 2023. M&A activity also saw a decrease, with 62 transactions compared to 75 in 2023. Despite these challenges, investment firms remained active in acquiring solar projects, with 166 solar project acquisitions totaling 28.3GW of capacity.
