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Boom in venture capitalist investment for solar
2022-12-06
Venture capitalists investment in the global solar sector saw a boom in 2022, recording the second highest level of funding since 2015, according to a report by Mercom Capital. Despite higher interest rates impacting public market and debt financings, overall activity declined only 13 percent to $24.1 billion last year. The record VC activity of $7 billion limited the decline further.
Recent events such as Inflation Reduction Act have bolstered demand for solar energy around the world, including in the US under President Joe Biden’s signature climate law. The increased costs of capital did however take their toll on financing activities towards the end of 2022 with public market and debt financing declining 32% and 24% respectively compared to 2021.
VC funding for companies in the sector amounted to $7 billion across 90 deals, with 222 VC investors participating. Of this amount, funds raised by sub-sectors included $5.96 billion for downstream; $864 million for PV balance of systems; $83 million for thin-film solar cells; $76 million for service providers, and $13 million for concentrating solar power.
The initial public offering of Jinkosolar Holding’s main subsidiary Jinko Solar was the biggest deal of last year raising $1.57 billion while debt financings came to a total of 12.1 billion due to securitisation activity accounting for 3.1 billion alone.
Mergers and acquisitions activity saw a significant uptick in 2022, with a total of 128 transactions recorded - the highest since 2010. 8 deals exceeded $1 billion each. The top VC-funded companies were Intersect Power ($750 million), Longroad Energy ($500 million), Yellow Door Energy ($400 million), Palmetto (375 million) and Aspen Power Partners ($350 million). All in all, it was an encouraging year for the solar sector despite some challenges towards the end.
Venture capitalists investment in the global solar sector saw a boom in 2022, recording the second highest level of funding since 2015, according to a report by Mercom Capital. Despite higher interest rates impacting public market and debt financings, overall activity declined only 13 percent to $24.1 billion last year. The record VC activity of $7 billion limited the decline further.
Recent events such as Inflation Reduction Act have bolstered demand for solar energy around the world, including in the US under President Joe Biden’s signature climate law. The increased costs of capital did however take their toll on financing activities towards the end of 2022 with public market and debt financing declining 32% and 24% respectively compared to 2021.
VC funding for companies in the sector amounted to $7 billion across 90 deals, with 222 VC investors participating. Of this amount, funds raised by sub-sectors included $5.96 billion for downstream; $864 million for PV balance of systems; $83 million for thin-film solar cells; $76 million for service providers, and $13 million for concentrating solar power.
The initial public offering of Jinkosolar Holding’s main subsidiary Jinko Solar was the biggest deal of last year raising $1.57 billion while debt financings came to a total of 12.1 billion due to securitisation activity accounting for 3.1 billion alone.
Mergers and acquisitions activity saw a significant uptick in 2022, with a total of 128 transactions recorded - the highest since 2010. 8 deals exceeded $1 billion each. The top VC-funded companies were Intersect Power ($750 million), Longroad Energy ($500 million), Yellow Door Energy ($400 million), Palmetto (375 million) and Aspen Power Partners ($350 million). All in all, it was an encouraging year for the solar sector despite some challenges towards the end.