The impact of the import duties imposed by President Trump on capital flows in the solar industry the first quarter of 2018 was clear and undeniable. According to the latest quarterly report by Mercom Capital, total corporate funding fell to only $2 billion, a 65% fall from the fourth quarter and its lowest level since the second quarter of 2017.
Venture capital funding, debt financing and public market financing all fell on both quarter-over-quarter and year-over-year basis. While in previous quarters one or more of these categories falls, in the most recent quarter all were down.
Additionally, large-scale project funding fell to $2.7 billion, down 27% from the fourth quarter but still marginally higher than in the first quarter of 2017. Residential and commercial solar project funds, however, actually increased quarter-over-quarter due to one $400 million deal.
Given the fewer number of deals in this space, total volumes have been more uneven from quarter to quarter.
Plenty of companies, projects changing hands
However, one category boomed – corporate mergers and acquisitions. Global Infrastructure Partners’ $5 billion acquisition of Singapore’s Equis Energy was larger than the total in any one quarter over the last year, and was one of five acquisitions where the value was disclosed.
Additionally a record 80 large-scale project acquisition deals were closed, however the value at $1.9 billion was around the mid-point of the last six quarters. The top five transactions include BayWa’s $197 million acquisition of a 70% stake in the GroenLeven Group’s solar project pipeline.
It remains to be seen how the global solar funding landscape will recover during the second quarter. While the tariffs are now a known quantity and can be factored into business plans, the trade war that President Trump has engaged in with China continues to introduce new uncertainties.