In the first quarter of 2011, the solar industry attracted venture capital investments of $658 million, more than doubling the $311 million in such investments in the first quarter of 2010.

That’s according to a new report, “Solar Funding and M&A Q1 2011 Report,” by Mercom Capital Group, LLC. The report looks at non-governmental funding of the solar industry and mergers and acquisitions across the globe.

“M&A [i.e., merger and acquisition] and venture capital, everything overall, has been on the positive side,” said Raj Prabhu, managing partner and co-founder of Mercom. That’s building on the successes of last year. “2010 was the best year by far for solar.”

The report found that the solar industry attracted $2.1 billion in non-Chinese credit or debt funding in the first quarter of 2011. In the whole of 2010, the industry attracted $2.2 billion in non-Chinese credit or debt funding.

“It shows that the market is recovering,” Prabhu said.

Still, the investments China is making through Bank of China are outpacing spending from all other countries combined. In the first quarter of 2011, it extended $7.6 billion in credit to Jinko Solar. That deal dwarfed the whole sector, according to Prabhu.

“The amount of money they’re getting from the government bank is just huge,” he said.

In all, the solar industry saw 18 M&A deals in the first quarter of 2011, valued at $1.4 billion, up from $909 million from the first quarter of 2010.

“One [theme we saw] was vertical integration,” Prabhu said. “The vertical integration allows margins to be higher.”

In the M&A market, a lot of project developers were getting bought by manufacturers, according to Prabhu.

“Now when a manufacturer has a project to develop, they can sell their modules to their developer,” he said.

The M&A sector, however, was led by one large transaction.: the $904 million purchase of Italian solar generator company Rete Rinnovabile S.r.l. by U.K.-based private equity firm Terra Firma Capital Partners Ltd.

Given the positive first quarter for the industry, 2011 could see more explosive growth.

“This year, the momentum is there for the first quarter. But it remains to be seen [how the year will go],” Prabhu said.