Solar receives $600M in VC funding for 2013
Global venture capital (VC) investments dropped 40 percent to $600 million in 97 deals in 2013 compared to $992 million in 106 deals in 2012. Total corporate funding into the solar sector encompassing VC, debt and public market financing was up 25 percent in 2013 to almost $10 billion, compared to about $8 billion in 2012.
Mercom Capital Group, a global clean energy communications and consulting firm, released its report on funding and mergers and acquisition (M&A) activity for the solar sector in 2013.
VC funding in Q4 2013 totaled $87 million in 24 deals compared to $197 million in 28 deals in Q3 2013. Since mid-2012 the new normal for VC funding has been smaller funding quarters and smaller deal sizes.
Solar downstream companies saw the largest amount of VC funding in 2013 with $262 million in 34 deals, accounting for 45 percent of venture funding. Investments in CSP reached $109 million in 12 deals and PV companies were close behind with $104 million in 17 deals. Thin film saw a 77 percent drop in funding from 2012, with $72 million in 2013 compared to $314 million a year earlier.
Read more about solar energy:
“While venture funding levels were down, overall fundraising was up and public market financings were really strong in 2013,” said Raj Prabhu, CEO of Mercom Capital Group. “Higher valuations among public solar companies have opened up the capital markets again as an avenue for fundraising at attractive terms. IPOs are back.”
The top five VC-funded companies in 2013 were Chinese solar project developer Heifei Golden Sun Technology which raised $69 million; followed by Clean Power Finance, a provider of third party financing for distributed PV projects, which raised $62 million; Solexel, a developer of high-efficiency crystalline silicon solar modules, brought in $55 million; Sungevity, a provider of residential solar installations, raised $43 million; and OneRoof Energy, a developer and operator of residential solar energy generation systems, raised $30 million.
The most active investor in terms of deal numbers was New Enterprise Associates, investing in three companies. New Enterprise Associates was also the top investor in 2012 with four deals. This was followed by Kleiner Perkins Caufield & Byers, PACA Investment, Firelake Capital Management, CCM US, and VisionRidge Partners all investing in two companies each.
Public market financings jumped considerably to $2.8 billion in 39 deals in 2013, up from just $893 million in 23 deals in 2012. In 2013, there also were seven IPOs that together brought in more than $1 billion.
Large-scale project funding announced in 2013 amounted to $13.6 billion in 152 deals, compared with $8.7 billion in 84 deals in 2012. Announced large-scale project funding in Q4 2013 jumped as well, with $6 billion in 46 deals. The largest project funding deal announced in 2013 was the $1 billion bond financing completed by Solar Star Funding for its Solar Star 1 and Solar Star 2 projects. Top investors in large-scale projects were Kasinkornbank with 15 projects, and Bank of Tokyo-Mitsubishi UFJ with 10 projects.
Residential and commercial lease funds showed strong growth in 2013, with 22 announced funds totaling $3.34 billion, a 69 percent increase over 2012. Almost $1 billion was raised in Q4 2013 alone. Vivint Solar, SolarCity, Sunrun, SunPower, and SunEdison were top fundraisers in 2013.
The fourth quarter of 2013 was a very active quarter for large-scale project development around the globe. Mercom tracked about 220 project announcements totaling almost 9 GW in the quarter.
Corporate M&A activity in solar amounted to $12.7 billion in 81 transactions compared to $6.7 billion in 51 transactions in 2012. M&A deal activity was up 59 percent in 2013 largely driven by strategic acquisitions and acquisitions of distressed assets.
The largest M&A transaction in 2013 was the $9.4 billion acquisition of Tokyo Electron by Applied Materials, followed by ABB’s acquisition of Power-One, for approximately $1 billion. Shunfeng Photovoltaic International acquired Wuxi Suntech Power, the main Chinese unit of Suntech Power Holdings, for $489 million, and Goldpoly New Energy Holdings acquired China Merchants New Energy Holdings in a non-cash transaction valued at $273 million. Dow Corning acquired Mitsubishi’s 12.5 percent stake in Hemlock Semiconductor LLC, giving it 100 percent ownership, and 12.5 percent in Hemlock Semiconductor Corporation, giving it 80.5 percent ownership.
Announced debt funding in 2013 totaled $6.2 billion in 38 deals, compared with $6.9 billion in 34 deals in 2012, and nearly $20 billion in 41 deals in 2011. The most active provider of credit in 2013 was China Development Bank, which provided debt funding for five Chinese solar companies. Since 2010, an announced Chinese bank loan, credit facilities and framework agreements to Chinese solar companies have reached $53.6 billion. For the first time since 2010, debt raised by non-Chinese companies exceeded those raised by Chinese companies via Chinese banks.
Mercom tracked 28 solar companies that filed for insolvency or bankruptcy protection over the course of 2013. More than 60 percent of these companies were manufacturers, accounting for 18 of the 28. European companies continued to struggle with bankruptcies and insolvencies.
All but two UK regions failing on school energy efficiency
Most schools are still "treading water" on implementing energy efficient technology, according to new analysis of Government data from eLight.
Yorkshire & the Humber and the North East are the only regions where schools have collectively reduced how much they spend on energy per pupil, cutting expenditure by 4.4% and 0.9% respectively. Every other region of England increased its average energy expenditure per pupil, with schools in Inner London doing so by as much as 23.5%.
According to The Carbon Trust, energy bills in UK schools amount to £543 million per year, with 50% of a school’s total electricity cost being lighting. If every school in the UK implemented any type of energy efficient technology, over £100 million could be saved each year.
Harvey Sinclair, CEO of eEnergy, eLight’s parent company, said the figures demonstrate an uncomfortable truth for the education sector – namely that most schools are still treading water on the implementation of energy efficient technology. Energy efficiency could make a huge difference to meeting net zero ambitions, but most schools are still lagging behind.
“The solutions exist, but they are not being deployed fast enough," he said. "For example, we’ve made great progress in upgrading schools to energy-efficient LED lighting, but with 80% of schools yet to make the switch, there’s an enormous opportunity to make a collective reduction in carbon footprint and save a lot of money on energy bills. Our model means the entire project is financed, doesn’t require any upfront expenditure, and repayments are more than covered by the energy savings made."
He said while it has worked with over 300 schools, most are still far too slow to commit. "We are urging them to act with greater urgency because climate change won’t wait, and the need for action gets more pressing every year. The education sector has an important part to play in that and pupils around the country expect their schools to do so – there is still a huge job to be done."
North Yorkshire County Council is benefiting from the Public Sector Decarbonisation Scheme, which has so far awarded nearly £1bn for energy efficiency and heat decarbonisation projects around the country, and Craven schools has reportedly made a successful £2m bid (click here).
The Department for Education has issued 13 tips for reducing energy and water use in schools.