by Chris Meehan. Originally published on SolarReviews.com
Overall spending on solar in the second quarter of 2015 was down to $5.9 billion, lower than the $6.4 billion in the first quarter of 2015. However, many sectors of the solar industry, particularly residential and commercial solar funds, saw record growth to $1.93 billion in the most recent quarter. That’s according to the Mercom Capital Group, which today (July 13) released its solar market funding and merger and acquisition (M&A) report for the quarter.
Spending on solar in the quarter also was down on a year-over-year basis. In the second quarter of 2014 spending on the solar industry was at $6.3 billion. The biggest drop was in large-scale project funding. In the second quarter of 2015 26 deals totaling $1.9 billion were announced. In the first quarter of the year 29 deals totaling $2.5 billion were announced.
Funds to support residential and commercial solar installations set a record with $1.93 billion in funds raised in five deals. Of that $775 million went to three loan funds and $1.2 billion went to two third-party lease or PPA funds. In the last quarter this sector raised $1.92 billion.
“Overall corporate funding was down slightly this quarter,” observed Raj Prabhu, CEO of Mercom Capital Group. “Yieldcos had a significant impact on the financial activity in the sector and raised $1.6 billion in public markets, about $800 million in debt and accounted for almost a third of all large-scale project acquisitions. Residential and commercial solar funds continue to attract record funding as the investment tax credit (ITC) expiration deadline approaches.”
The report also found that public market financing in the solar sector reached a record $2.3 billion in the recent quarter. That’s compared to $1.3 billion in the first quarter. Abengoa Yield led the industry by raising $670 million. SunEdison’s TerraForm Global Yieldco raised $335 million in the quarter. The yieldco formed by SunPower and First Solar,8point3 Energy Partners, issued its initial public offering in the quarter raising $420 million.
While lower-cost financing like yieldco financing was up in the quarter debt financing in the solar sector fell almost a third to $3.4 billion from $5 billion in first quarter. China’s GCL New Energy led the field with a $1.3 billion loan.
At the same time venture capital financing in solar fell slightly. The Mercom report said it fell to $142 million in 24 deals in the second quarter from $195 million in 27 in the first quarter of 2015.
The market and demand for solar are still strong, however, Mercom also noted 209 new large-scale project announcements totaling 10.4 gigawatts of new projects. Earlier this year the company anticipated the world would see nearly 58 gigawatts of new solar by the end of 2015.