Corporate funding for solar sector totaled $12 billion in first half of 2022

Mercom Capital Group, a global clean-energy communications and consulting firm, has released its report on funding and merger and acquisition activity for the solar sector in 1H (first half) and Q2 2022.

Total corporate funding (including venture capital [VC] funding, public market, and debt financing) in 1H 2022 was $12 billion, 11% lower than the $13.5 billion raised in 1H 2021. The number of deals increased 28% year over year, with 91 deals in 1H 2022 compared to 71 deals in 1H 2021.

"The current state of the economy—inflation, higher interest rates, supply chain issues—has started to impact fundraising in the solar sector. Even though the first-half numbers held up, there was a pronounced slowdown from Q1 to Q2,” said Raj Prabhu, CEO of Mercom Capital Group. “Besides venture and private equity funding, all other areas experienced a decline in financing activity. But the value of solar is more evident than ever to markets that are dependent on energy imports. Clean energy installation goals are being ramped up around the world, and solar is a long-term beneficiary of this trend.”

In 1H 2022, VC funding activity rose 125%, with $3.7 billion in 53 deals compared to the $1.6 billion raised in 26 deals in 1H 2021. Of the $3.7 billion in VC funding raised, 89% went to solar downstream companies, with $3.3 billion in 39 deals. A total of 145 VC investors participated in solar funding in 1H 2022.

Solar public market financing in 1H 2022 came to $3.3 billion in eight deals, 10% lower than the $3.7 billion in 13 deals in 1H 2021.