Raj Prabhu, CEO of clean energy communications and consulting firm Mercom Capital Group, announced that solar companies raised $34.3 billion in corporate funding in 2023, the highest amount raised in over a decade. This funding includes venture capital (VC) funding, public market financing, and debt financing.
Key points:
- Corporate funding in the solar sector reached $34.3 billion in 2023, a 42% increase from the previous year
- Global VC funding and private equity investment in the solar sector reached $6.9 billion in 2023.
- Public market financing in the solar sector totaled $7.4 billion in 2023, a 45% increase from 2022
- M&A activity declined in 2023 with 96 corporate M&A transactions compared to 128 in 2022
The report also found that VC and private equity funding in the solar sector remained strong, reaching $6.9 billion in 2023, just 1% lower than the previous year. Of this funding, $4.7 billion went to solar downstream companies. Among the top VC-funded companies in 2023 were 1KOMMA5°, Enfinity Global, Silicon Ranch, CleanMax Solar, and Juniper Green Energy.
Public market financing in the solar sector also saw significant growth, totaling $7.4 billion in 2023, a 45% increase from the previous year. Debt financing reached its highest level since 2010, with $20 billion raised in 2023, a 67% increase from 2022. The securitization market also played a role, with $3.4 billion raised in 11 deals.
M&A activity, however, declined by 25% in 2023, with 96 corporate M&A transactions compared to 128 in 2022. Solar downstream companies led the M&A activity, acquiring 84 solar companies.
The report concludes that while funding activity remains strong, macroeconomic and geopolitical uncertainties, elevated interest rates, and recession worries have slowed down both corporate and project M&A activity in the solar sector. Additionally, high valuations, unpredictable project completion timelines, and a lower risk appetite have contributed to a decrease in project M&A activity.
