The first quarter of 2016 saw $2.8 billion in corporate funding, that’s according to a new report from the Mercom Capital Group. It found that the amount of corporate funding for the first quarter of 2016 was significantly lower than last year’s first quarter, which saw $6.4 billion in corporate funding.
“It’s a tough environment out there,” said Raj Prabhu, CEO of Mercom Capital Group. “Solar public companies in general have had a difficult time raising capital at depressed market valuations. Yieldcos, which accounted for significant financial activity in the debt and public markets last year, have faded this quarter. On the bright side, VC funding held up well, securitization deal activity picked up and residential/commercial funds raised a billion dollars in Q1.”
Venture capital funding was a high-point for the solar sector. It saw $406 million in investments across 22 deals. That’s compared to $195 million in 27 venture capital deals in the first quarter of 2015. It’s also more deals than in the fourth quarter of 2015, which saw 17 venture capital deals but $457 million in investments.
The biggest declines in funding were in public market financing. Mercom said that only $94 million was raised in four deals in the first quarter. That’s compared to $1.3 billion in 10 deals in the first quarter of 2015. Debt financing also was significantly lower. The first quarter of the year saw $2.3 billion in investments in 19 deals. The prior year’s first quarter saw $4.9 billion and 27 deals. Mercom said it was the lowest amount raised since the fourth quarter of 2014.
Residential and commercial solar funds continued to see investments in the first quarter for leasing and power purchase agreements. That sector raised $1 billion in six deals in the first quarter. That’s significantly more than the $650 million in three deals announced in the fourth quarter of 2015 and shows a continuing trend in investments in the sector. “Since 2009, approximately $18 billion has gone into residential and commercial funds,” Mercom said.
Despite the lower investments, the solar industry is still expecting a strong year in 2016. One of the biggest factors is the extension of the Investment Tax Credit in the latter days of 2015.Tweet