The solar energy sector has experienced a dynamic landscape of mergers and acquisitions (M&A) over the past decade, reflecting the industry’s rapid growth and evolution. M&A activities in this sector are frequent, driven by factors such as market consolidation, technological advancements, and strategic expansions. Globally, more than 4,500 M&A transactions were completed between 2018 and the first half of 2023 in the renewable energy space, with Europe accounting for approximately 43% of these transactions.
Reasons Behind M&A Activities in the Solar Energy Sector
- Market Consolidation: As the solar industry matures, companies aim to increase market share and operational efficiency through consolidation.
- Technological Advancements: Acquiring firms with advanced technologies or innovative solutions allows companies to stay competitive.
- Geographical Expansion: M&A enables companies to enter new markets and diversify their geographical presence.
- Financial Synergies: Combining resources can lead to cost reductions, improved financing options, and enhanced project pipelines.
Notable M&A Activities by Region
- Europe: In 2022, Spain accounted for 45% of utility-scale solar acquisitions in Europe, with 12.2 GW of projects acquired, primarily driven by favorable policies and stable power prices.
- United States: The U.S. witnessed a 2.5-fold increase in M&A activity for solar-plus-storage assets in 2022 compared to 2020, totaling 21 GW of transactions. This surge is attributed to strong economics of storage systems and incentives from the Inflation Reduction Act.
- Asia: India’s renewable energy sector is poised for significant M&A activity, with over a dozen wind and solar power generators expected to change ownership. Major players like Brookfield Asset Management and Siemens are considering exits, influenced by investment challenges and valuation concerns.
- Africa: The acquisition of Lekela Power for $1.5 billion by Africa Finance Corporation and Infinity Group highlights the continent’s growing appeal in the renewable energy sector.
- Australia: The Australian solar market has seen increased M&A activity as companies aim to capitalize on the country’s abundant solar resources and supportive regulatory environment.
List of 10 Largest Solar Energy M&A Deals
- Tesla’s Acquisition of SolarCity (2016): Tesla acquired SolarCity for approximately $2.6 billion, integrating solar energy solutions with its electric vehicle and energy storage products.
- RWE’s Acquisition of Con Edison Clean Energy Businesses (2022): German energy producer RWE acquired Con Edison Clean Energy Businesses for $6.8 billion, expanding its renewable energy portfolio in the U.S.
- KKR’s Acquisition of Albioma (2022): KKR & Co acquired French renewables company Albioma for $2.75 billion, enhancing its presence in the European renewable energy market.
- Hydro-Québec’s Acquisition of Great River Hydro (2022): Hydro-Québec acquired Great River Hydro for $2.25 billion, marking a significant investment in renewable energy assets.
- Shell’s Acquisition of Nature Energy Biogas (2022): Shell Petroleum acquired RNG producer Nature Energy Biogas for $2 billion, diversifying its renewable energy portfolio.
- Brookfield’s Acquisition of Duke Energy’s Commercial Renewables (2023): Brookfield Renewable acquired Duke Energy’s commercial renewables arm for $2.8 billion, strengthening its position in the U.S. renewable energy market.
- Global Infrastructure Management and Actis’s Acquisition of Atlas Renewable Energy (2022): The firms acquired Latin American renewables company Atlas Renewable Energy for $2 billion, expanding their footprint in the region.
- Shell’s Acquisition of Sprng Energy (2022): Shell Petroleum acquired Indian renewable energy developer Sprng Energy Private for $1.55 billion, marking a significant entry into the Indian market.
- JP Morgan’s Stake in Falck Renewables (2022): JP Morgan acquired a 60% stake in Italian renewable energy company Falck Renewables for $1.4 billion, enhancing its renewable energy investments.
- Toyota Tsusho’s Stake in Eurus Energy Holdings (2022): Toyota Tsusho Corporation acquired a 40% stake in Eurus Energy Holdings Corporation for $1.38 billion, expanding its renewable energy portfolio.
Recent Activities in 2024/2025
The period of 2024 and early 2025 has been marked by notable M&A activities in the solar energy sector:
- BP’s Strategic Divestments: BP announced plans to sell its lubricants business, Castrol, and a stake in its solar power developer, Lightsource BP, aiming to generate $20 billion by the end of 2027. This move is part of BP’s strategy to address investor concerns by cutting costs and improving returns on investments.
- Iberdrola’s Search for Partners: Spanish energy company Iberdrola is seeking a partner to acquire a minority stake in a 1 GW renewables portfolio. This strategy aligns with Iberdrola’s approach of selling minority stakes in advanced projects to finance new investments.
- TotalEnergies Expands in the U.S. Solar Market:
In early 2024, TotalEnergies acquired a 2.5 GW solar and storage portfolio from Core Solar for an undisclosed amount. This acquisition aligns with the company’s broader strategy to expand its renewable energy footprint in North America. The deal strengthens TotalEnergies’ position in the U.S. solar market and supports its commitment to achieving 100 GW of renewable capacity by 2030.
- NextEra Energy’s Unsuccessful Bid for Ørsted’s U.S. Operations:
NextEra Energy attempted to acquire Ørsted’s struggling U.S. offshore wind assets to diversify its renewable energy portfolio. However, the deal fell through due to regulatory hurdles and valuation disagreements. Ørsted’s financial struggles, exacerbated by rising interest rates and supply chain disruptions, led the company to reassess its U.S. market strategy. - Brookfield Renewable’s Aggressive Expansion:
Brookfield Renewable Partners continued its acquisition spree by purchasing a 3 GW solar-plus-storage pipeline in India. This move is part of Brookfield’s strategy to gain a foothold in emerging markets with high solar potential. The deal was valued at approximately $1.6 billion and positioned Brookfield as a key player in India’s rapidly growing renewable energy sector. - Enel’s Partial Exit from Latin America:
Enel, one of the largest renewable energy developers globally, announced the sale of a 1.8 GW solar portfolio in Brazil and Chile. The company cited a strategic realignment towards European markets as the reason for this divestment. The deal, valued at around $2 billion, attracted bids from regional players and international investors seeking to enter Latin America’s expanding solar market. - China’s State-Owned Enterprises Consolidate:
In a major domestic restructuring, China’s National Energy Administration (NEA) facilitated the merger of two state-owned solar developers, China General Nuclear Power Group (CGN) and China Three Gorges Renewables. This merger, worth approximately $10 billion, aimed to create a national solar champion with enhanced financial strength and project execution capabilities.
Key Takeaways from Recent M&A Trends
- Strategic Shifts by Oil Majors:
Companies like BP and Shell are reassessing their renewable energy investments. BP’s partial exit from Lightsource BP signals a strategic pivot toward higher-margin energy investments, while Shell is focusing more on energy trading and storage rather than direct solar development. - Market Consolidation in Emerging Markets:
The surge in acquisitions in regions like India, Brazil, and Africa reflects growing investor interest in high-growth solar markets. Brookfield, TotalEnergies, and other global players are capitalizing on these opportunities. - Challenges in Offshore Wind and Large-Scale Solar:
Ørsted’s failed U.S. expansion highlights the risks associated with offshore wind and large-scale solar projects, particularly in markets with complex regulatory environments and financing challenges. - China’s State-Led Consolidation:
China is strengthening its solar sector through mergers of state-owned enterprises, ensuring financial stability and dominance in the global solar supply chain.
As the solar energy industry continues to evolve, M&A activity will remain a key driver of growth, enabling companies to scale operations, enhance technological capabilities, and expand into new markets.