Austin, Texas — ESI-AFRICA.COM — 4 February 2011 – Texas-based Mercom Capital Group (Mercom) has released data t showing that venture capital investment in the global solar and wind industries rose 18% between 2009 and 2010.
Mercom’s latest ‘Solar Funding and M & A Report’ shows that despite a number of potential hurdles, the worldwide effort to increase renewable energy production is on course and continues to expand.
The report revealed that global investors had put more than US$1.66 billion into the solar market by the end of last year, with the US, France, Israel, and Canada representing the top four contributors. While last year’s numbers had improved over those of the previous year, they had fallen short of 2008 figures, which had exceeded US$3.87 billion.
In Ontario, a combination of venture capital investment and government incentives, in the form of a powerful feed-in tariff (FIT) programme, have helped to create a progressive solar market that includes green energy, jobs, photovoltaic training courses, and new manufacturing facilities.
Sunnydale, California’s Calisolar drew the most investment to the Canadian solar market in 2010, totalling US$22.5 million, followed by Toronto-based Morgan Solar, Incorporated, which brought in US$3.5 million.
While solar venture capital grew over the last year, the overall number of deals has dropped steadily since 2008. However, funding for large-scale photovoltaic projects rose over the last two quarters of 2010, which saw the industry add 26 new deals worth a combined US $4.1 billion.
While the trends for solar are mainly encouraging, they do not come without setbacks.
According to the Mercom report, 2010 figures peaked in the first half of the year and this, combined with the drastic fluctuations between the 2008 and 2009 numbers, revealed a level of instability. “Analysts are predicting this to be a continuing trend,” the report explains, “as the capital-intensive nature of solar is not fitting well with traditional (venture capital) models, and exits in the solar sector have been tough for (venture capitalists).”