Lack of venture capital investment and reduced public market financing activity due to the COVID-19 pandemic is squeezing cash flows. Between January and March this year, total corporate funding in the solar PV sector amounted to $1.9bn, spanning across 17 deals. This is 31% less than the $2.8bn achieved last year. Furthermore, global venture capital funding in the solar PV sector amounted to $145m in the first quarter, which is significantly less compared to the $350m in Q4 of 2019, says GlobalData, a leading data and analytics company.
Somik Das, Senior Power Analyst at GlobalData, comments: “Funding levels dropped in Q1 2020 as the pandemic brought the global economy to a halt. Most large economies are forced to shut down and there is minimal activity in the solar PV market.
“Even public market financing dropped sharply – a mere $22m in public market activity was recorded over the last three months. In comparison, the previous reporting period saw $259m being raised, this was a reduction of about 91%. The funding levels have dropped for solar PV projects.
“The worst may be yet to come, but the solar PV sector is hopeful that activity will pick up in the second half of the year. Once the pandemic is over, the funding will pick up pace and the solar PV market would be on course to get back to shape.”