Mercom Capital Group llc, a global clean energy communications and consulting firm, has released its annual report on funding and merger and acquisition (M&A) activity for the solar sector in 2021.
The total corporate funding for the solar sector worldwide, including venture capital and private Equity (VC), debt financing and public market financing, was $27.8billion. This is a 91% increase over the $14.5billion raised in 2020. 2021 saw the highest level of corporate funding in ten decades.
“2021 was the best year for solar corporate funding as well as mergers and acquisitions since 2010,” says Raj Prabhu, CEO of Mercom Capital Group. “Financing activity bounced back strongly following a COVID-19-affected 2020. There was more money than ever chasing deals and more demand than supply of attractive companies and assets as organizations and funds look to fulfill their ESG and clean energy mandates.”
The global venture capital and private equity funding for the solar sector in 2021 was $4.5 billion. This is a 281% increase over the $1.2 billion in 2020. This is the largest amount of VC financing for the solar sector since 2010, In 2021, 11 VC funding deals totaled more than $100 millions.
$3.9 billion (89%) of the $4.5 billion in VC financing raised in 58 deals by 2021 went to 43 solar downstream businesses. Balance of system companies raised $219 millions; concentrated solar power companies bought $108 million; solar PV firms raised $91 million; service providers raised $35 Million; and thin-film technology businesses raised $18 million.
GoodLeap, formerly Loanpal, a residential solar loan provider, was the top VC-funded company in 2021. It raised $1.6 Billion in two separate transactions of $800 M each. Nexamp (which raised $240 M), Nexamp (240 M), Nexamp (175 M), Enpal (175M) and GameChange Solar (151.5M).
There were 154 VC/PE investors that participated on funding deals in 2021. Seven of them were involved in multiple rounds.
In 2021, public market financing totaled $7.5 Billion. This was 49% more than in 2020 ($5.1 Billion). Shoals Technologies Group, a supplier of BOS components for solar project, was the largest deal. It raised $2.2 billion through an IPO. In 2021, ten companies in the solar industry went public through IPOs or SPACs.
Announced debt financing reached $15.8 billion in 2021, an increase of 91% compared to the $8.3 billion raised in 2020. Record levels of securitization activity were a key factor in the rise in debt financing activity in 2021. 13 deals brought in $3.7 billion.
M&A activity in the solar sector soared with 126 transactions in 2021 – the highest number of deals ever recorded. Most transactions involved solar downstream companies. Adani Green Energy Ltd. was the largest transaction in 2021, acquiring a 100% stake at SB Energy India for an enterprise value of approximately $3.5 Billion.
There were 280 large scale solar project acquisitions in 2021, compared with 231 transactions in 2020. The sector saw the highest level of project acquisition activity in 2021 in terms GW, with more that 69 GW being sold than 40 GW in 2020.
This 131-page report contains 108 tables, graphs and charts that cover three hundred sixty-seven (367), companies and investors. View Mercom’s 2021 Solar Funding and M&A Report here.