Total corporate financing in the solar industry reached $22.3 billion in the first nine months of 2024, down 23% year-over-year. Mercom Capital Group says global uncertainties are eroding investor confidence, but an increase in debt financing and the resilience of newly announced large-scale project financing are bright spots for the sector.
According to figures from Mercom Capital Group, total corporate financing in the solar sector amounted to $22.3 billion in the first nine months of 2024.
The total figure, which includes venture capital/private equity, public market and debt financing, represents a 23% year-over-year decline compared to the first nine months of 2023, when $28.9 billion was raised. The number of deals is also down, down 6% year-over-year, with 117 deals in the first nine months of 2024 compared to 124 deals in the first nine months of 2023.
The year-to-date performance is largely due to a 39% year-over-year decline in solar venture funding, which has reached $3.5 billion through 39 deals so far this year, and a 71% year-on-year decline in public sector solar. market financing, which amounts to $2.1 billion so far this year, spread across 10 deals.
But an increase in debt financing is reversing this year’s downward trend. Mercom raised $16.7 billion through 68 deals in the first nine months of 2024, compared to $16 billion raised through 54 deals in the first nine months of 2023.
Raj Prabhu, CEO of Mercom Capital Group, said the solar sector is grappling with significant fiscal uncertainties.
“Regulatory concerns around anti-dumping and countervailing duties and tariffs, the US Section 45X guidelines, potential policy shifts due to election results, unpredictable global trade policies, supply chain disruptions, higher costs, tight labor markets and continued project delays have all dampened investor confidence . and delayed key investment decisions,” Prabhu said. “While the recent 50 basis point rate cut is encouraging, the market needs more clarity and direction on future rate cuts to fuel a revival of investment momentum.”
Despite the decline in overall financing, Mercom Capital Group’s analysis adds that announced large-scale project financing is showing resilience this year, reaching $34.3 billion in the first nine months of 2024, up from last year.
Mercom Capital Group also recorded 62 mergers and acquisitions (M&A) transactions executed in the first nine months of 2024, compared to 75 in the first nine months of 2024.
Nearly 28.3 GW of solar projects were acquired in the first nine months of 2024, compared to 31.6 GW in the first nine months of 2023. The number of project acquisitions during the first nine months of both years was the same at 166.
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