Solar vs Wind: Funding To Wind Industry Rises As Investment In Solar Tumbles

Investors lost confidence in the greentech sector after Solyndra’s collapse in late 2011. Since then, funding to solar has fluctuated, dropping more than 50% from 2012 to 2013, before rising again in 2014 with $1.8B invested, only to fall again in 2015.

However, funding to wind — a market smaller than solar in terms of deals and dollars to private companies — has grown tenfold from 2012 to 2015 and seen three straight years of growth. In 2015, funding to wind companies grew 6% over the previous year, while dollar investment in solar dropped 34%.

Despite tumbling fossil fuel prices, a total of 216 solar and 78 wind energy companies have drawn deals between 2012 and 2016 year-to-date. The companies raised more than $6.8B in aggregate. Our funding analysis takes into account all equity funding and includes convertible note rounds.

The deals have continued in 2016, even as oil dropped below $30 a barrel. In just the first two months of 2016, two wind energy startups — US-based United Wind ($200M) and India’s SITAC RE ($168.5M)— raised financing.

Global yearly deal activity and funding

The peak in solar investments in 2014 was led by two $200M+ rounds: Japan-based Nippon Renewable Energy’s $250M private equity round and $250M in financing raised by Texas-based Sunnova Energy Corp. That same year, California’s Sunrun raised a $150M Series E round, from investors including Accel Partners, Foundation Capital, Madrone Capital Partners, and Sequoia Capital.

The top 3 funding rounds in wind last year were all raised by Indian startups: a $265M private equity round by ReNew Power Ventures,  a $230M private equity round to Ostro Energy and $165M in financing to Welspun Renewables Energy.

Though the number of wind deals dropped to below 15 last year after a peak of over 30 in 2014, the average deal size increased from $2.7M to $55.5M, according to our data, meaning there were fewer but larger deals.

In quarterly terms, deals and dollars in solar peaked in Q4’14, led by the previously mentioned $250M round raised by Sunnova Energy Corp and a $140M private equity round raised by Tennessee-based Silicon Ranch Corporation.

Investment in wind slowed in the second and third quarters of 2015, but rapidly increased in the last quarter, driven by the previously-mentioned mega rounds raised by ReNew Power Ventures and Welspun Renewables Energy.

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