Solar finance race is on in decade of action!

The private financiers at New York and other global hubs are increasingly investing in solar projects but overall funding volumes have not returned to 2014 and 2015 highs, according to Mercom (Image credit: Sam Valadi / Flickr)

Solar finance has entered a new decade riding a wave of corporate attention and upbeat stats but must pick up the pace in the coming years if the world is to avoid destructive global heating, according to global experts.

Mercom Capital Group’s latest annual update shows solar projects raised US$11.7 billion from private sector sources worldwide throughout 2019, a 20% jump on the US$9.7 billion secured the year prior.

The consultancy linked last year’s “strong” figures to the renewed solar appetites of private equity and venture capital investors, who went from pumping US$1.3 billion (65 transactions all in all) into the industry in 2018 to deploying US$1.4 billion (53 transactions) in 2019.

According to Mercom, the year-on-year boost was even more marked in the debt segment, with funding volumes rising 29% between 2018 (US$6 billion, 53 deals) and 2019 (US$7.8 billion, 46 deals). In particular, 2019’s US$1.6 billion of solar securitisation deals marks a record, the firm said.

Last year’s funding bonanza extended to stock exchanges – Mercom recorded six solar IPOs between January and December – and project acquisitions, with a 26GW large-scale solar pipeline sold off where 29GW changed hands in 2018.

IRENA: Green energy needs annual US$750bn 

Despite the 2018-to-2019 boost, last year’s solar corporate finance volumes of US$11.7 billion fall short of those recorded by Mercom in 2017. As shown by the graph below, the industry has not recovered from the corporate funding slump taking place between 2015 and 2016.

Judging by estimates from the International Renewable Energy Agency (IRENA), also released recently, global financing to broader renewables will have to speed up significantly for deployment to reach the scale required to avert catastrophic climate change.

On Sunday, the global body said annual green energy funding must more than double over the coming “decade of action”, soaring from US$330 billion today to US$750 billion by 2030. The figure would ensure renewables cover 57% of global power needs by the end of the decade, IRENA said.

While sizeable, the annual investment gap could be met by diverting funding to fossil fuels, the agency argued, pointing at the US$10 trillion in non-renewable energy funding already planned worldwide through 2030.

Should it refocus on renewables in such a scale, the world would save US$1.6-3.7 trillion in climate change costs every year by the end of the decade, IRENA believes “We know it is possible,” IRENA director-general Francesco La Camera said, “but we must all move faster.”

Image credit: Mercom Capital Group