Rise Of Corporate Funding in The Indian Solar Sector


The solar sector is growing and glowing! With abundant opportunities and innovations, people across industries are identifying the potential of solar. With the enhanced recognized potential, there has been a steep rise in corporate funding in the solar sector, globally. India too is not left untouched from this pattern of increase in the investment. With the increase in demand for solar assets, there has been a subsequent increase in the funds. The following section of the article discusses certain numbers which will make it evident that there has been a subsequent hike in solar assets and investments. 


Let’s Talk Numbers 

As of April 2021, there were five securitization deals for $1.4 billion in a single quarter. In the first quarter of 2021, global corporate finance for the solar sector totaled $8.1 billion in 36 deals, up 21% from $6.7 billion in 43 deals in the fourth quarter of 2020. These recorded numbers covered almost 340 investors and companies. One can think of various reasons for this hike in the funds. But the obvious reason behind the same is increased debt financing in the first quarter of 2021. Different companies contribute differently to this activity of increased funding. 


For an economy that had been hit so badly with the pandemic, it was strange to record such enhanced numbers so soon. Overall fundraising totals were boosted by a large IPO and record securitization activity while the state was still recovering from the COVID-19 pandemic. In a pandemic year, solar asset acquisitions were at an all-time high, and the industry has become increasingly more sought-after as an investment refuge, particularly in the COVID-19 economy. Solar stocks saw a rough start in the first quarter of 2020 but with the increase in demand, they picked up pretty quickly. And since then, solar assets have been constantly in demand. In Q1 2021, global venture capital funding for the solar sector totaled $1 billion, up 33% from $773 million raised in Q4 2020. In the first quarter of 2021, almost 15 GW of projects were acquired. Investors from across industries started investing in solar assets and the increase in solar projects seen was dynamic. 

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The $2.2 billion raised by Shoals Technologies Group through an IPO, the $1.1 billion raised by Enphase Energy, Loanpal’s $800 million raise, Intersect Power’s $482 million raise accompanied by Loanpal’s $390 million securitization deal, and Sunrun’s $389 million raise were among the top corporate-funded deals of the quarter. These are some of the deals that greatly contributed to the increase in corporate funding.

The Global Solar Outlook 

From $11.7 billion in 2019, global corporate funding into the solar business, including venture capital, private equity, debt financing, and public market financing climbed by 24% to $14.5 billion in 2020. Solar project acquisitions were dispersed across 26 nations in the first quarter of 2021. Spain led the way in terms of acquisitions with 5.5 GW, followed by the US with 4.8 GW and Greece with 1.6 GW.

India’s Renewable Future 

India is recently working on its world commitments to rethink and rework its energy mix and its dependence on carbon powered energy sources. For the same, the Indian government is also providing various subsidies and is planning different strategies and policies to encourage investment in renewables. The above-mentioned details about the increase in solar investment come as good news. Renewable energy can help India’s electrical industry decarbonize while also providing a source of electricity that is cheaper or at least competitive with fossil fuel-based alternatives. Solar seems to be the leader when one thinks about renewables for India. This is particularly because of the abundant sunlight available in the region. Solar energy has emerged as the most viable and environmentally beneficial choice for India to meet all of its energy needs, including the 50% of its rural residents who still lack access to electricity. This has significant policy implications for India’s electrical sector in terms of preparing for a low-carbon future. 

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The increased funding in the Indian solar sector makes it evident that Indian investors and companies understand the improved benefit that the solar sector could bring to the Indian subcontinent, both environmentally and economically. The startling conclusion that today’s renewable energy investments could play a significant influence in lowering India’s overall energy dependence and prices in the future.

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