TLDR:
Key Points:
- Total corporate solar funding, global venture capital funding, public market financing, and PV mergers and acquisitions all declined year on year in Q1 of 2024
- Sector facing challenges including high interest rates, inflation, supply chain issues, trade disputes, and tariffs
Mercom Capital Group and Wood Mackenzie highlight the challenging investment climate in the PV sector in Q1 of 2024. Total corporate solar funding, global venture capital funding, public market financing, and PV mergers and acquisitions all experienced declines compared to the previous year. Mercom recorded $8.1 billion in total corporate funding in the first quarter, with 41 deals, marking a 4% decrease year on year. Global venture capital funding fell to $406 million across 13 deals, down 81% year on year. Wood Mackenzie noted that high interest rates are disproportionately affecting renewables projects, making the transition to a net-zero global economy more difficult and costly.
Wood Mackenzie’s report highlights that the rise in interest rates negatively impacts the cost of borrowing for renewables projects compared to traditional sectors like oil and gas. Higher interest rates could significantly increase the levelized cost of electricity for renewables, making these projects less attractive. Policymakers are urged to focus on bolstering carbon markets, maximizing subsidy efficiency, and mobilizing green finance to mitigate the effects of high interest rates on renewable energy projects.
