On October 4th, 2010, Mercom Capital Group LLC (Austin, Texas, US) released funding and merger and acquisition information for solar electric industries in the third quarter of 2010, noting that while venture capital (VC) funding transactions fell sharply during the quarter, other funding transactions, mostly from national governments, remained strong. Among the significant trends Mercom noted is that Chinese solar photovoltaic (PV) manufacturers disclosed transactions of over USD$20 billion from Chinese banks tied to the nation's government.
Fall in VC funding
Disclosed VC funding for the solar industry fell to USD$169.35 million for 11 transactions during the third quarter, a decline from USD$922 million in the second quarter of 2010, remaining much lower than the USD$298 million in the first quarter of 2010. Solaria Corporation (Fremont, California, US) was the recipient of USD$65 million, by far the largest VC transaction during the quarter.
Chinese government invests heavily in Chinese solar manufacturing, outpaces United States
However, while VC funding fell sharply, other types of funding increased sharply in the third quarter of 2010 to over USD$20.7 billion in disclosed transactions, a large increase over the USD$12.9 billion in the second quarter of 2010. Chinese solar manufacturers received over USD$20 billion of this funding, led by a USD$8.9 billion credit facility to LDK Solar Company Ltd. (Xinyu, China), a USD$5.3 billion loan to Yingli Green Energy Holding Company Ltd. (Baoding, China) and USD$4.4 billion loan to JA Solar Holdings Company Ltd. (Zhabei, China). All three of these were granted by the state-run China Reconstruction Bank/China Reconstruction Bank Corporation.
In the United States, the U.S Department of Energy (DOE) also increased its funding to renewable energy industries in the third quarter, though nowhere near Chinese levels. The DOE distributed USD$3.04 billion in the quarter, an increase from USD$1.75 billion in the second quarter of 2010. The DOE has a total of USD$32 billion in funding commitments to for clean energy technologies through the American Recovery and Reinvestment Act of 2009 ("stimulus package").
Mergers and acquisitions in solar electric industries also increased to a total of USD$586 million in disclosed transactions, USD$305 million of which represents Sharp Corporation's (Osaka, Japan) acquisition of Recurrent Energy LLC (San Francisco, California, US).
