The amount of corporate funding allocated to solar power initiatives hit its highest level in a decade as of the end of 2023.
Findings featured in the Mercom Capital Group’s annual report on the solar power sector show that up to $34.3 billion was raised over the past year, specifically to support the development of numerous solar initiatives. Around 250 companies and individual investors were covered in the 2023 report.
While there were only 160 deals finalized last year, the total amount raised is much higher than the $24.1 billion recorded in 2022. 2023’s total includes at least $6.9 billion in venture capital (VC) from 26 VC deals worth over $100 million; this is the second-highest amount from VCs invested in the sector since 2014. Mercom experts added that financing from the public sector also hit a ten-year-high last year, hitting a total of around $7.4 billion.
Going Against the Odds
Given these figures, experts say that solar investments have certainly bucked an array of roadblocks, including a highly volatile market and the US Federal Reserve’s aggressive interest rate hikes. Debt financing for solar power initiatives was also at its highest in a decade.
According to Mercom chief executive Raj Prabhu, the solar power sector remains highly attractive to investors, mostly due to the incentives offered under the US government’s Inflation Reduction Act (IRA), as well as the emphasis put on energy security by many national governments worldwide.
Interestingly, the Mercom report shows that mergers and acquisitions in the solar power industry dropped considerably last year. 2023 saw only 96 of these transactions, compared to the 128 done in 2022. Brookfield Renewable Partners’ acquisition of Duke Energy’s unregulated commercial renewables arm was the largest for 2023, coming in at $2.8 billion.