€82M for European Solar Startups as Investment Stabilises in 2026

The median funding round across all stages for European solar startups is the highest it's been in over 15 years at €15M. This is a result of venture capitalists focusing on a small number of substantial investments rather than spreading their bets across the sector, as seen in previous periods of more widespread growth.

Investors have largely retreated from the extremes of the investment spectrum, avoiding unproven seed concepts at one end and the heavy capital demands of late-stage growth at the other. Instead, they’re concentrating their capital on select early-stage opportunities that offer a balance of validated technology and upside potential.

Mergers and Acquisitions Rise as Larger Firms Consolidate Across the Solar Value Chain

There have been four mergers and acquisitions involving European solar hardware and software startups in 2026 so far, already making it the second-highest year on record, just behind 2021, which saw six acquisitions.

Image: Avnet Silica

With investors becoming more selective, corporate acquisitions offer an alternative pathway for financing and scaling company growth. M&A activity also allows larger organisations to consolidate their offering across the solar value chain.

Sunotec Group, for example, took a majority stake in Germany’s Kaufmann Electric in June 2026 to help ease grid connection bottlenecks and accelerate infrastructure delivery within their solar park construction business. By absorbing Kaufmann’s core offering of substations, solar cables, and energy connectors, Sunotec successfully moved a critical part of its supply chain in-house.

Capital Flows to Solar Startups Solving Friction in the System

While the solar industry has largely mastered mass production of low-cost PV modules, the sector is now facing second-order challenges such as grid connection bottlenecks, spatial constraints, and supply chain vulnerabilities. 

A closer look at large European funding rounds, mergers and acquisitions in 2026 reveals capital is flowing into companies aiming to solve the friction points within the current system:

• Utility-Scale Connection & Project Deployment: Sunotec’s strategic acquisition of Kaufmann Electric secures cables, connectors and substation engineering within their EPC ecosystem, helping them mitigate grid-connection delays and protect their deployment pipelines.

• Load-Bearing Commercial Rooftops: France’s Heliup secured €16M in funding for their lightweight panels that tackle the weight-bearing limitations of commercial buildings, opening up massive square footage of previously unusable rooftops.

• Renewable Heat for Public Buildings: The UK’s Naked Energy secured €10.35M (£8.8M) for their hybrid solar technology that generates both heat and electricity. Their high-density tubes aim to maximise energy output on space-constrained roofs of high-demand public facilities like hospitals, schools, and leisure centres.

• Residential Energy Estimations & Installation Pipeline: Dutch startup Solar Monkey merged with Swiss firm Eturnity to combine their calculation and quotation software, allowing residential installers to provide more accurate energy estimations, optimise home layouts, and accelerate sales pipelines.

• Building Integration: Solar Capture Technologies (UK) was acquired out of administration by TMS Solar Solutions to secure vital scaling capital. The British startup's composite BIPV roof tiles help bypass local planning restrictions and consumer resistance to traditional rooftop mounting.

• Seasonality & Intermittent Power: Norway’s Photoncycle raised €15M to tackle one of the largest systemic flaws in Northern European solar—seasonality. The company’s home solar system with underground solid-state hydrogen storage transforms summer sun into year-round dispatchable power.

• Recycling & Material Recovery: 43% of venture capital funding for European solar in 2026 went to material recycling and recovery firms. Germany’s Solar Materials and France’s ROSI secured €15M and €20M, respectively, indicating investors have their eye on upcoming solar waste liabilities and raw material constraints.

The Next Wave of European Solar Innovation

The current venture capital market in Europe can be characterised as a period of stabilisation following the boom of 2022–23 and the fall of 2024–25, with capital concentrated in a few select companies and consolidation across the value chain through increased mergers and acquisitions. But where the next wave of innovation in Europe will come from remains an open question for the sector.

Reflecting on the findings, Harvey Wilson, Senior Manager Industrial Vertical Markets EMEA at Avnet Silica, comments:

DATA SOURCES & METHODOLOGY

Source: All companies listed under solar energy in the Crunchbase dataset with headquarters in Europe, as at 31st August 2026.

Further research was conducted by visiting each company’s website, its profile on Crunchbase, its LinkedIn profile, and third-party news articles to provide more granular details on the product and service offerings of each business. This allowed further categorisation of the companies in the list into more specific classifications.

The data was filtered to only include companies specialising in solar energy, and not those offering a general product which serves the soar industry among many others, nor those offering a range of products where solar energy was not the primary focus of the company.

The analysis then focused on startups specialising in the development of solar energy hardware and software, including specialist offerings across the product lifecycle, from developing advanced materials and solar cells through to end of life recycling.

This involved excluding companies that are focused on, for example, energy and commodities trading, online marketplaces, project development, installation, operations and maintenance, consulting services, and other closely related products and services.

Disclosed equity funding includes seed, angel, VC, private equity and corporate funding rounds. It does not include equity crowdfunding. It also excludes grants, debt financing, IPO and post-IPO funding.

Where the stage of a funding round (e.g. seed, venture round A, B, C, etc) was not explicitly stated, this was determined by assessing the information within the full context of the dataset, including other funding rounds the company has received.

It’s worth noting there is often a time lag between recent events and the original dataset being populated. This is especially true of information about new companies being founded or receiving seed and early stage funding.