Funding of European solar startups up 414% YoY at the end of Q2

Note: this story was previously published with data up to the end of May 2023. We have now updated the story to bring it in line with Q2 financial reporting, which you'll find below.

Investment in European solar startups is up 414% year-on-year, by the end of Q2, with companies receiving $6.53 billion by the end of Q2 compared with $1.27 billion raised by this time last year. Globally, investment in solar startups is up 50% to $19.1 billion, and the US market is holding steady, up 2% on last year at $8.5 billion, reveals new research from Avnet Abacus.

Avnet Abacus analysed Crunchbase data for companies listed under the solar category to provide insight into the level of investment activity and innovation happening in this area.

The growth of solar across Europe and the US is set against a backdrop of an overall 49% drop year-on-year in global venture funding in Q2, so while venture markets are slowing amid economic uncertainty, investor confidence in solar remains strong.

Commenting on the study’s findings, Dr Sara Ghaemi, Avnet Abacus’s Technical Director, says “Even though solar technology is relatively mature, there is still a lot of room for growth and innovation. There is growing demand around the world, and government policies and incentives continue to support investment in this area, with engineers continually seeking new ways to make solar more efficient.”
 

European solar startups raise almost as much as the whole of last year - in just 6 months

By the end of last year, Europe’s solar startups had drawn in $7.2 billion in funding, making it the highest year on record by almost 4x the previous peak of $1.9 billion in 2021. So far in 2023, European solar ventures have raised $6.53 billion – that’s 91% of 2022’s annual total – and we’re only half way through the year. 

Globally, so far this year, solar firms have raised $19.1 billion compared with last year’s total for the year of $29.3 billion, and in the USA, they’ve raised $8.5 billion compared with last year’s total tally of $14.3 billion. Despite venture capital cooling off in many sectors, the solar industry is well on track to make 2023 another record-breaking year.

Average investment in solar startups eclipses previous records

Average investment so far this year in European solar is $141.9m, compared with an average of $88.3m in 2022 and $22.9m in 2021. The average amount going into US solar startups in 2023 is $121.6m, peaking above last year’s average of $118.1m. Globally, this year, the average amount of funding going into solar firms sits at $116.1m compared with 2022’s average of $93.2m.

From solar panels to solar parks: the startups raising money

Among the startups receiving investment this year, there are rooftop solar panel manufacturers and installers for residential homes and garages, as well as for buses, lorries and other commercial vehicles. To ensure the efficient use of PV panels for the home, there are also ventures offering solar-powered home energy storage solutions, wallboxes, and smart energy management systems raising funds this year.

On the larger scale, there are companies gathering investment for solar parks, including the use of farmland via agri voltaics, and firms offering to develop, construct and maintain solar power plants, and integrate solar power into industrial operations.

There are also companies developing solar panel materials to enhance the efficiency of the cells, while making the panels more flexible and aesthetic too.

Dr Sara Ghaemi, Avnet Abacus’s Technical Director, comments “While solar energy is gaining attraction globally, Europe's accelerated growth is led by a combination of ambitious European climate goals (a 32% share of renewable energy by 2030), supportive policies and technological advancements.

“Europe has a strong desire to reduce its dependence on fossil fuel imports and enhance energy security. Solar energy offers a decentralised and domestically available source of power, reducing reliance on external energy suppliers. Europe is a pioneer in the technological innovation and industry development of solar energy. Hence, the availability of advanced solar technologies has further accelerated the adoption of solar energy in Europe.”

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