Solar Funding Drops 41% Amid Policy Uncertainties, Report Reveals

AUSTIN, Texas — Corporate funding in the solar sector saw a significant decline of 41% year-over-year in the first quarter of 2025, reaching $4.8 billion across 39 deals, according to a report released by Mercom Capital Group on April 16. This decline contrasts sharply with the $8.2 billion raised during the same period in 2024.

Raj Prabhu, CEO of Mercom Capital Group, attributed this downturn to growing investor caution driven by policy reversals, tariff shocks, and regulatory uncertainties. “The drop in funding this quarter reflects growing investor caution… what we need now is clarity and policy certainty to restore confidence in the markets,” Prabhu stated.

Despite this year-over-year decline, corporate funding did see a rebound from the previous quarter, increasing by 20% from the $4 billion raised in 40 deals in Q4 2024. Mercom noted that while the funding environment faces significant challenges, the “fundamentals remain strong.”

Global venture capital funding in the solar industry totaled $1.4 billion across 14 deals, marking a staggering 237% increase compared to the $406 million from 13 deals in Q1 2024. This uptick was largely fueled by a single $1 billion raise from Origis Energy, one of the most notable deals in the quarter.

Other significant venture capital transactions included Terabase Energy, which raised $130 million, Mission Clean Energy with $55 million, and AMPIN Energy Transition and Tandem PV, both securing $50 million each.

In project acquisitions, approximately 13.6 gigawatts (GW) of solar assets changed hands globally in Q1 2025, a notable increase from the 10.8 GW recorded in Q1 2024. Project developers and independent power producers led the acquisition efforts, securing over 8 GW of projects.

Investment firms and funds acquired an additional 2.5 GW, while other buyers, including telecommunications and integrated energy trading companies, contributed to the 2.3 GW of project acquisitions. Electric utilities claimed 485 megawatts (MW) and oil and gas companies took 245 MW during this quarter.

Public market financing experienced a drastic reduction, plummeting to just $20 million from two deals in Q1 2025, down 99% from the $1.4 billion raised via six deals in Q1 2024. Debt financing also took a hit, totaling $3.5 billion across 23 deals — a 45% decrease year-over-year from the $6.4 billion raised in Q1 2024.

Mercom’s report also highlighted that 19 mergers and acquisitions (M&A) deals were completed in Q1 2025, a similar level of activity compared to the previous year’s Q1 results. Prabhu remarked, “Despite headwinds in the broader funding environment, we did see an uptick in project M&A in Q1.”