Solar Industry Secures Decade-High Corporate Funding of $34.3 Billion in 2023

Almost 45.4 GW of solar projects were acquired in 2023


Global corporate funding in the solar sector in 2023, including venture capital (VC) investments, public market funding, and debt financing, reached $34.3 billion, a 42% year-over-year (YoY) increase from $24.1 billion. This was the largest amount raised in over a decade.

The numbers were revealed in Mercom Capital Group’s newly released Annual and Q4 2023 Solar Funding and M&A Report.

While the total funding rose, the number of deals dropped 8.5% from 175 to 160.

“Despite facing challenges from inflation and higher interest rates, the solar industry demonstrated remarkable resilience in 2023. This resilience can be attributed to a strong global commitment to achieving energy transition goals and significant demand driven by the Inflation Reduction Act, mainly thanks to lucrative incentives – investment tax credit and production tax credit. These incentives effectively offset the adverse effects of higher interest rates, ensuring the financial viability of solar projects and maintaining the sector’s attractiveness to investors,” noted Raj Prabhu, CEO of Mercom Capital Group.

According to the report, global VC and private equity funding in the solar sector in 2023 came in strong with $6.9 billion in 69 deals, just 1% lower than the $7 billion raised in 2022. There were 26 VC funding deals of $100 million or more in 2023.

Solar VC Funding 2010 - 2023

In terms of attracting VC funding, solar downstream companies dominated the landscape. These companies secured 42 deals amounting to $4.7 billion (68%) in the January – December period. Solar photovoltaic companies raised $1.9 billion, while the balance of system (BoS) companies raised $311 million. Service providers raised $32 million in 2023.

Solar Top VC Funded Companies in 2023

The top VC deals in 2023 were – $471 million raised by 1KOMMA5°, $428 million raised by Enfinity Global, $375 million raised by Silicon Ranch, $360 million raised by CleanMax, and $350 million raised by Juniper Green Energy.

The solar sector witnessed a substantial increase in public market financing during the year. A total of $7.4 billion was raised, representing a 45% YoY increase from $5.1 billion in 2022.

In 2023, announced debt financing came to $20 billion, 67% higher compared to $12 billion in 2022. This is the highest amount raised since 2010. Securitization activity was a key contributor, with $3.4 billion in 11 deals.

M&A activity declined 25% YoY, with 96 corporate M&A transactions in 2023 compared to 128 in 2022. The largest transaction was by Brookfield Renewable, which agreed to acquire Duke Energy’s unregulated utility-scale commercial renewables business in the U.S. for approximately $2.8 billion.

“While funding activity has been strong, macroeconomic and geopolitical uncertainties, recession worries, and elevated interest rates have significantly slowed down both corporate and project M&A activity in 2023,” noted Prabhu. “Higher borrowing costs have put a damper on M&A transactions, with cautious investors biding their time for more favorable valuations. Solar projects continue to attract interest, but high valuations and a lower risk appetite, compounded by unpredictable project completion timelines due to interconnection delays, labor shortages, and scarcity of components, have all contributed to a drop-off in project M&A activity.”

Solar Top M&A Transactions in 2023

Solar downstream companies led corporate M&A activity in 2023, acquiring 84 solar companies, followed by manufacturers with five, service providers with four, and balance of system companies with three acquisitions.

There were 231 large-scale solar project acquisitions in 2023 compared to 268 in 2022. Almost 45.4 GW of solar projects were acquired in 2023 against 66 GW in 2022, a 31% YoY decline.

Over 45 GW of large-scale solar projects were acquired in 2023, with 35% of the total acquired by project developers and IPPs. Investment firms acquired 23%, followed by utilities with 17% in 2023.

Prabhu anticipates that the second half of 2024  may see an improvement in market conditions, depending on the actions of the US Federal Reserve. The uncertainty surrounding interest rates and inflation creates a cautious outlook for the first quarter, with expectations of potential positive changes later in the year.

In all, 250 companies and investors are covered in this 127-page report, which contains 103 charts, graphs, and tables.

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