All the segments recorded by Mercom – venture capital (VC) and private equity funding, public market financing, debt financing and mergers and acquisitions (M&A) – have dropped in 2024 compared with 2023.
Debt financing dropped by 6% year-on-year from US$20 billion in 2023 to US$18.8 billion in 2024. The second half of the year saw a significant drop in debt financing after a record high – for any H1 period – in the first half of 2024 with US$12.2 billion.
Global VC funding in the solar industry had a bigger drop year-on-year, with a 36% decrease. In total, US$4.5 billion was raised across 60 deals in 2024, down from the US$7 billion raised in 70 deals the year before.
The largest VC funded deal in 2024 was made by US solar project company Pine Gate Renewables, which raised US$650 million.
It was followed by US community solar developer Nexamp, which raised US$520 million to expand its operations into new markets; US independent power producer (IPP) BrightNight, which secured US$440 million investment from Goldman Sachs in August to fund its five-year business plan and US IPP Doral Renewables secured US$400 million to support its pipeline of over 13GW of renewables.
“2024 was a year of uncertainties for the solar industry, with inflation, high interest rates, trade disputes, and policy ambiguity contributing to declines in funding and M&A activity,” said Raj Prabhu, CEO of Mercom Capital Group.
M&A activity in 2024 decreased from 96 solar transactions in 2023 to 82 last year, while 217 utility-scale solar project acquisitions were made in 2024, down from the 231 registered the year prior. In terms of volume capacity, a total of 37.7GW of solar PV projects were acquired in 2024, which represents a 17% decrease year-on-year from the 45.4GW of capacity sold from PV projects in 2023.
According to Mercom, project developers and IPPs were the most active acquirers in 2024 with 14.4GW of solar PV projects, followed by investment firms and infrastructure funds with 13.1GW.
“The market is awaiting clear policy signals from the new administration on the IRA provisions, ITC extensions, and tariff measures before investors come off the sidelines and deal-making can return to healthier levels,” added Prabhu.
