Investments, venture capital and mergers & acquisitions in the solar sector are up in comparison to the previous quarter, according to the Mercom Capital Group Q3 2013 Solar Funding and M&A Report. It’s the latest positive news for the solar industry, which continues to show signs of recovery after the slump that’s plagued the manufacturing side of the photovoltaic industry. Mercom found that in the third quarter, $2.18 billion was raised by public solar companies through venture capital (VC), debt financing and other equity financings. Another $9.8 billion was spent in merger & acquisitions (M&A) during Q3.
Both figures are significantly higher than in the pervious quarter, during which only $915 million was raised by public companies and $1.3 billion was spent in M&A activities. The amount of M&A deals was slightly higher in the recent quarter, seeing an increase from 18 to 23. The biggest M&A activity, Applied Materials’ $9.4 billion acquisition of Tokyo Electron and its amorphous silicon, accounted for the majority of funds spent on M&A activities, the report found. Most of this quarter’s M&A activity was strategic or represented an acquisition of distressed assets/companies/technologies on the cheap.
“Overall market conditions for the solar sector continue to improve. Project funding and M&A activity were at record levels, reflecting an improved demand outlook," said Raj Prabhu, CEO of Mercom. "Taking advantage of rising market values, we also saw significant financing activity among publicly-traded companies this quarter.”
The report also found that investments in venture capital, which allow solar companies to invest in new technologies and infrastructure, were up - but relatively stagnant. VC funding in the third quarter rose to $207 million, up from $189 million the previous quarter. PV companies received $57 million in VC funding, which was the most across the solar industry, Mercom noted.
“The largest VC deal in Q3 2013 was the $39.9 million raised by Solexel, a developer of high-efficiency crystalline silicon solar cells and modules,” a representative from Mercom stated. “Investors included Technology Partners, DAG Ventures, Northgate Capital, GSV Capital, KCPB Holdings and SunPower. CSP project designer and developer eSolar raised $22 million from Oak Investment Partners.”
Third-party ownership (TPO) companies raised a total of $584 million (disclosed) to support residential and commercial solar installations. Among those companies is Clean Power Finance, which raised $20 million from the UAE Fund. Announced solar lease funding comes to $2.4 billion year to date.