Corporate Funding for Solar Rose 11% to $8.4B in Q1 2023 Despite Economic Headwinds

Almost 12 GW of solar projects were acquired in Q1 2023


Total corporate funding for solar companies, including from venture capital (VC), public market, and debt financing, amounted to $8.4 billion in 42 deals in the first quarter (Q1) of 2023, up 11% year-over-year (YoY) compared to $7.5 billion raised in 49 deals, according to Mercom’s Q1 2023 Solar Funding and M&A Report.

Funding increased 55% quarter-over-quarter (QoQ) compared to $5.4 billion raised in 44 deals.

“Investments in solar bucked the trend in Q1 despite tough economic conditions. The Inflation Reduction Act is a significant driver for investments in solar. The fundamentals are solid, driven by strong demand from energy transition worldwide, especially in Europe and the U.S.,” said Raj Prabhu, CEO of Mercom Capital Group.

Global VC funding for the solar sector increased significantly during the quarter, with 18 deals yielding $2.1 billion, a 40% QoQ increase from $1.5 billion. The funding was up by 75% YoY.

VC Funding

Silicon Ranch topped the list with the highest venture capital funding at $375 million. The other top-funded companies were Amarenco with $325 million; Enpal with $234 million; Palmetto with $150 million; and Silfab Solar with $125 million.

Solar downstream companies received $1.4 billion in 10 VC deals, representing 64% of the total VC funding. In the preceding quarter, they received $1.3 billion in 12 VC deals, accounting for 85% of the $1.5 billion VC funding.

Public market financing for the solar sector shot up 1,183% QoQ to $2.3 billion in seven deals in Q1 2023 compared to $181 million in five deals noted the report. Funding decreased 8% YoY, with $2.5 billion raised in four deals. Four IPOs were announced in Q1 2023, compared to one in Q1 2022. The largest IPO in the quarter was by NEXTracker, a designer and manufacturer of single-axis PV trackers, which raised $638 million.

In Q1 2023, the announced debt financing for the solar sector was $3.9 billion, a 6% QoQ increase from $3.7 billion. Debt financing rose marginally by 3% from $3.8 billion raised in 19 deals.

A total of 27 solar M&A transactions was recorded in Q1 2023 compared to 38 in the last quarter.

Solar downstream companies led M&A activity with 26 transactions, followed by a balance of system company with one transaction.

Almost 12 GW of solar projects were acquired during the quarter compared to 14 GW in Q4 2022.


Acquirer mix

Investment firms and funds were the top acquirers during the quarter, tying up over 4.8 GW of solar projects. Project developers and independent power producers followed with 3.9 GW, electric utilities 2.2 GW, and oil and gas majors acquiring 200 MW of projects.

The 90-page report covers 318 companies and investors and includes 66 charts, tables, and graphs.

To learn more about Mercom’s Q1 2023 Solar Funding and M&A Report, visit: