Total corporate funding into the solar sector fell 16% year-on-year across 175 deals in 2025.
Mercom Capital Group said the decrease of $22.2bn compared with $26.3bn raised in 157 deals in 2024.
The company added that 2025 was marked by policy uncertainty, trade and tariff risks, and higher interest rates that weighed on overall funding levels.
“2025 was a year of recalibration for the solar industry, shaped by policy uncertainty, trade and tariff risks, and higher interest rates that weighed on overall funding levels,” said Raj Prabhu, CEO of Mercom Capital Group.
“Despite these challenges, corporate funding activity was resilient, with deal counts increasing to multi-year highs even as total capital raised declined, reflecting a shift toward smaller and more selective transactions,” Prabhu stated.
Global VC and private equity funding reached $3.5bn in 75 deals, down 22% on the $4.5bn secured in 60 deals in 2024.
Of this, $2.7bn went to solar downstream companies, while solar PV companies raised $581m and balance of system companies secured $99m.
Public market financing totalled $2.6bn, 13% lower than the $3bn raised in 2024.
Announced debt financing came to $16.1bn, a 14% decrease on $18.8bn the previous year.
M&A activity rose 17% year-on-year to 96 transactions, led by Ares Management Corporation’s $2.3bn acquisition of a 20% stake in Plenitude.
Large-scale solar project acquisitions increased to 246 in 2025, though total acquired capacity edged down 1% to 37.4GW.
Project developers and IPPs accounted for 52% of the acquired 37.4GW, with investment firms taking 24.5%.