Mercom Capital Group, llc, a global clean energy communications and consulting firm, released its annual and fourth quarter funding and Merger and Acquisition (M&A) activity report for the solar sector in 2011.
“Investment activity in 2011 was robust,” said Raj Prabhu, Managing Partner of Mercom. “Whether you point to the dramatic module price declines, Europe’s diminishing incentives, or the so-called ‘Solyndra effect’, solar continued to gain attention and dollars for technology and innovation through venture capital funding.”
Venture Capital (VC) funding and M&A activity were strong in 2011, setting records for number of deals and M&A activity. Notable findings include:
-VC investment in solar totaled US$1.9 billion in 111 deals in 2011─the highest number of deals ever in a single year. By comparison, there were 65 VC deals in 2010, 84 in 2009, 93 in 2008, and 71 in 2007.
-Thin-film technology raised the most VC funding (US$595.5 million in 17 deals), beating downstream companies (US$339 million in 26 deals), crystalline-silicon PV (US$338 million in 20 deals), concentrated solar power (US$308 million in 13 deals), and concentrated PV (US$129 million in 10 deals).
-The solar thermal power company BrightSource Energy raised US$201 million in Series E funding, making it the largest single VC investment of 2011. Stion, a manufacturer of high-efficiency thin-film solar modules, came in second when it announced a US$130 million. The third and fourth highest VC fundraising rounds were by thin-film solar panel maker MiaSol (US$106 million, Series F), and solar cell developer Suniva (US$94.4 million, Series D) respectively.
-The top VC investor of 2011 was Kleiner Perkins Caufield & Byers, which completed eight transactions, followed by GE and Good Energies, with six transactions each. There were 182 VC investors in solar in 2011.
-M&A activity in 2011 was more than double that of 2010 in terms of dollars, and approximately 33% more in deals. There were US$4 billion in M&A activity in 65 deals of which only 26 were disclosed, compared to just over US$2 billion in 44 deals in 2010. The largest single M&A transaction was Total’s (the French oil & gas company ) 60% stake in the solar manufacturer SunPower, accounting for US$1.4 billion of the US$4 billion.
-While Solyndra dominated headlines in the United States and globally, over US$700 million worth of VC investment came after the solar manufacturer’s bankruptcy announcement on August 31, 2011.
-Fourth quarter VC funding totaled US$511 million, compared to US$372 million in Q3, US$354 million in Q2, and US$658 million in Q1.
“Falling panel prices and oversupply brought about a lot of consolidation activity,” added Prabhu. “With valuations of publicly-traded solar companies at record lows, M&A was the go-to exit strategy.”
The United States led all other countries in number of deals and VC funding, with 84 deals and over US$1.5 billion of investments. The United Kingdom completed the second highest number of deals with five, and India garnered the second highest amount of VC funding with US$95 million.
Globally, debt financing totaled US$20 billion. The top debt investor was the China Development Bank. Chinese loans, credit facilities and framework agreements came to US$15.7 billion in ten transactions.
Further Information: Mercom Capital Group, llc (www.mercomcapital.com)
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