Total global solar sector financing down 11% in first half of 2022

On July 13, Mercom Capital Group, a global energy consultancy, released the "Total Corporate Financing of the Solar Energy Industry in the First Half of 2022". According to the report, in the first half of the year, due to the decline in the number of new projects (especially in the second quarter), the first 50% of 2022 Commercial financing in the global solar market fell 11% year over year.


Total solar corporate financing (including venture capital funding, public market and debt financing) in the first half of 2022 was $12 billion, down 11% from the $13.5 billion raised in the first half of 2021. The number of financings increased by 28% year-on-year, with 91 deals in the first half of 2022 compared to 71 in the first half of 2021.


In the first half of the year, venture capital (VC) surged 125% to $3.7 billion. Among the largest venture capital financing projects, Guangdong Gaojing Solar in China is on the list.


Raj Prabhu, CEO of Mercom Capital Group, said: “The current economic conditions – inflation, higher interest rates, supply chain issues – have started to impact financing for the solar industry. Although the first half figures remain unchanged, from the first Significant slowdown in Q2 to Q2. Financing activity declined in all sectors except VC and private equity financing. But for a market that relies on energy imports, the value of solar is more evident than ever. Cleaner Energy installation targets are increasing globally, and solar is a long-term beneficiary of this trend.”


A total of 145 VC investors participated in solar investments in the first half of 2022. Venture capital financing activity grew by 125%, with 53 deals reaching $3.7 billion, while 26 deals raised $1.6 billion in the first half of 2021.


Notably, 89% of the $3.7 billion in VC funding raised in the first half went to solar downstream companies, with $3.3 billion coming from 39 deals.


The largest VC financings in the first half of 2022 include: Intersect Power financing $750 million, Palmetto financing $375 million, Agilitas Energy financing $350 million, Sun King financing $260 million, Guangdong Gaojing Solar Technology financing $251 million and Ignis energy $237 million in financing.


Solar open market financing in the first half of 2022 reached $3.3 billion in eight deals, 10% lower than the $3.7 billion in 13 deals in the first half of 2021.


Solar debt financing activity announced in the first half of 2022 ($5 billion in 30 deals) decreased by 39% compared to the $8.2 billion raised in 32 deals in the first half of 2021.


The five securitization deals totaled $1.4 billion in the first half of 2022, a 26% decrease from the $1.9 billion raised in seven deals in the first half of 2021. Since 2013, more than $12 billion has been raised through securitization transactions.


There were 53 solar M&A deals in the first half of 2022, compared to 54 in the first half of 2021. In the first half of 2022, Macquarie Asset Management and a consortium of British Columbia Investment Management Corporation (BCI) and MEAG agreed to acquire Reden Solar from InfraVia Capital Partners and Eurazeo for an enterprise value of $2.72 billion.


In the first half of 2022, a total of 148 projects acquired 38GW of solar projects, while in the first half of 2021 there were 136 project acquisitions for a total of 40GW.


Project developers and independent power producers were the most active solar project acquirers in the second quarter of 2022 with 4.1GW, followed by oil and gas majors with 4GW. Electric Utilities acquired 3.4GW of projects and investment companies acquired 1.6GW. Other insurance, pension funds, energy trading companies, industrial groups and IT companies acquired a combined 1.2GW.


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