A quarterly report from Mercom Capital said corporate funding in solar globally reached about $4.8 billion in Q1, 2025. This is a decline of 41% compared to Q1, 2024 totals of $8.2 billion in Q1, 2024.
“The drop in funding this quarter reflects growing investor caution in response to policy reversals, tariff shocks, and regulatory uncertainties that have forced companies and investors to reassess their strategies,” said Raj Prabhu, chief executive officer, Mercom Capital Group.
However, funding was up 20% quarter-over-quarter from Q4, 2024, and “fundamentals remain strong.”
“The long-term case for solar is intact. What we need now is clarity and policy certainty to restore confidence in the markets,” said Prabhu.
Global venture capital (VC) funding in Q1, 2025 reached $1.4 billion over 14 deals, marking an increase from Q1, 2024.
The quarter was lifted by a $1 billion VC raise from Origis Energy. Other significant VC deals included Terabase Energy with $130 million; Mission Clean Energy with $55 million; AMPIN Energy Transition with $50 million; and Tandem PV also with $50 million.
At the project level, about 13.6 GW of solar assets changed hands globally in Q1, 2025, up from 10.8 GW in Q1, 2024 and increasing quarter-over-quarter.
Project developers and independent power producers led acquisition activity, securing over 8 GW of projects. They were followed by investment firms and funds, which acquired 2.5 GW. Telecommunications, integrated energy traders, insurance firms, and other undisclosed buyers represented 2.3 GW in project acquisitions, electric utilities secured 485 MW and oil and gas majors secured 245 MW.
Public market financing nearly crashed to a halt, declining to $20 million across two deals in Q1, 2025, down 99% from the $1.4 billion raised through six deals in Q1, 2024.
About $3.5 billion in funding was closed via debt financing in Q1, 2025, falling about 45% year-over-year from Q1, 2024.
Mercom reported that 19 merger and acquisitions (M&A) deals closed in the quarter, a similar level of activity to last year’s Q1 total.
“Despite headwinds in the broader funding environment, we did see an uptick in project M&A in Q1,” said Prabhu.
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