The amount of venture capital (VC)—early-stage funding with higher risks, but high potential returns—going to solar companies continues to shrink, according to a new report from Mercom Capital Group. The report found that solar venture capital in the first quarter of 2013 fell to $126 million, almost a third of the $324 million in the previous year’s first quarter.

The lowered venture capital funding means fewer new solar companies are being funded. But more than that, Mercom saw a shift in where venture capital funding is going from manufacturers of newer solar technologies, like thin-films, to downstream players, like installers. 

“Downstream companies received the most VC funding of all categories. This is the first quarter we’ve seen this happen since we began tracking,” said Mercom CEO Raj Prabhu. In fact, the top venture capital investment in solar was $30 million, oddly enough from a Korean solar manufacturer, Hanwha Group, to a third-party ownership company OneRoof Energy, in California. Similarly, the next highest, according to Mercom, was the $28 million in funding raised by Sungevity. However, that was raised through a number of former investors, included Brightpath Capital Partners, Lowe’s, Vision Ridge Partners, Craton Equity Partners, and Eastern Sun Capital Partners.

Part of the issue is the continued lower prices of well-established silicon PV, which is making it harder for newer technologies to move from research and development stages to competitive commercial entities that can compete with silicon PV. It’s also making venture capitalists less likely to invest in new technologies, particularly after the failure of startup companies like Solyndra or Abound Solar. “After being burned by solar technology investments, especially thin film, we are finally seeing VC investments shift away from technologies and towards downstream or lease companies that are benefitting from record low panel prices,” Prabhu said.

Meanwhile the report also found that companies raised a lot of money to support third-party ownership, with three companies, SunPower, aleo solar and OneRoof Energy each raising $100 million to support such installations. “Mercom has tracked approximately $5 billion in disclosed solar lease funds to date,” the company said.