2011 Sees $1.9 Billion in Solar Energy Venture Capital, $4 Billion in M&A

"Investment activity in 2011 was robust," said Raj Prabhu, managing partner of Mercom. "Whether you point to the dramatic module price declines, Europe’s diminishing incentives, or the so-called ‘Solyndra effect,’ solar energy continued to gain attention and dollars for technology and innovation through venture capital funding."

Venture capital (VC) funding and M&A activity were strong in 2011, setting record numbers. Notable findings include:

VC investment in solar totaled $1.9B (billion) in 111 deals in 2011 — the highest number of deals ever in a single year.

Thin-film technology raised the most VC funding ($595.5M (million)), beating downstream companies ($339M), crystalline silicon photovoltaic ($338M), concentrated solar thermal ($308M), and concentrating solar power PV ($129M).

Within thin-film, copper indium gallium (de)selenide (CIGS) companies were the most popular, raising $467M. Concentrating solar thermal power company BrightSource Energy raised $201M in Series E funding, making it the largest VC investment of 2011.

Stion, a high-efficiency thin-film module manufacturer, was second with $130M. The other three top VC-funded companies were MiaSolé, Suniva and Heliovolt.

The top VC investor was Kleiner Perkins Caufield & Byers, which completed eight transactions. There were 182 VC investors in solar in 2011.

While Solyndra dominated headlines, over $700M of VC investment came after its bankruptcy announcement on August 31.

Fourth quarter VC funding totaled $511M, compared to $372M in Q3.

M&A activity was more than double that of 2010, with over $4B in 65 deals, of which only 26 were disclosed, compared to $2B in 44 deals in 2010. The largest M&A transaction was Total’s 60 percent stake in SunPower for $1.4B.

"Falling panel prices and oversupply brought about a lot of consolidation activity," added Prabhu. "With valuations of publicly-traded solar companies at record lows, M&A was the go-to exit strategy."

United States led in the number of deals and VC funding, with 84 deals and $1.5B of investment. Chinese loans, credit facilities and framework agreements came to about $15.7B in ten deals, compared to $32.6B in 2010.

Mercom Capital Group, llc is a global clean energy communications and consulting firm with offices in the United States and India. Mercom’s communications division helps clean energy companies build powerful relationships with media, analysts, government decision-makers, local communities and strategic partners. Mercom’s consulting division advises clean energy companies on new market entry, custom market intelligence and overall strategic decision-making. Mercom delivers highly respected industry market intelligence reports covering solar power, wind energy and smart grid. 

www.mercomcapital.com