Global corporate funding in the solar energy sector totalled $4.8 billion in the first quarter of this year, according to new data from Mercom Capital Group.
While this is down by more than two fifths (-41%) on the corresponding period a year earlier, it does mark a 20% increase on the fourth quarter of 2024, indicating a potential rebound despite current market turbulence.
Investor caution
“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,” commented Raj Prabhu, CEO of Mercom Capital Group. “But the fundamentals remain strong, and the long-term case for solar is intact.
“What we need now is clarity and policy certainty to restore confidence in the markets. Despite headwinds in the broader funding environment, we did see an uptick in project M&A in Q1.”
VC interest in the renewable energy sector has soared, with global venture capital funding for solar rose to $1.4 billion in the first quarter, a 237% increase year-on-year, however this was primarily driven by a single $1 billion transaction.
Public market financing totalled $20 million, across two deals (compared to six in Q1 2024), while debt financing came to $3.5 billion across 23 deals, compared to $6.4 billion across 23 deals in Q1 2024.
M&A activity
Some 19 solar corporate M&A transactions took place in Q1 2025, compared to 20 in the fourth quarter of 2024.
Some 13.6 gigawatts of solar projects were acquired in Q1, the data showed, with most of these acquisitions (8 GW) coming from project developers and independent power producers, followed by investment firms, diversified energy companies, utilities, and oil and gas businesses.
Some 263 companies and investors were featured in the report, which can be found here.
