Daniel Shugar heads the world’s leading tracker company, Nextracker. As the founder and chief executive officer of Nextracker, Shugar has played a leading role in making it a billion-dollar company despite the tumultuousness of the solar industry. The company continues to make significant progress even in the face of the ongoing COVID-19 pandemic. REGlobal got an opportunity to interview him and know his thoughts on how COVID-19 has changed solar project development, what has been the impact of recent oil shock, and where is the solar industry headed in terms of policy landscape and capacity installations.
What has been the impact of the ongoing COVID-19 crisis on project development timelines and clean energy sector jobs so far?
While we have seen some minor project development delays from our developer/EPC clients globally due to the closure of government entities in terms of permitting and interconnection during COVID-19, projects that have been under construction are getting completed. For the most part, we have been full speed ahead over the past five months. By most accounts, on project sites we have witnessed worldwide, solar power plant installation is considered an “essential service”. According to Solar Power Europe’s recently released Global Market Outlook, solar is expected to enter the Terawatt (TW) age in 2022, only four years after the 0.5 TW level was reached despite a potential 4 per cent market contraction in 2020 due to COVID-19.
Have you seen any impact on module and other material pricing so far?
As the global market share leader in solar trackers, Nextracker works closely with best-in-class module manufacturers to collaborate on PV system optimization, and to provide our clients with a simplified procurement process and streamlined project design. The question regarding module pricing impact does not apply to our business per say.
As the head of the world’s leading solar tracker company, what are your top-most concerns and strategies to storm through the crisis?
Nextracker is made up of a group of creative, collaborative and passionate problem-solvers from diverse backgrounds. Employee safety is always paramount to our company, and even more so today. We, at Nextracker, have formed a COVID Task Force since the beginning of the pandemic and have been working hard to ensure the safety of our 364 employees across the eight offices globally.
Another big concern is that the global equity market has taken a hit by the pandemic, and this has been a concern for our customers.
What has been NEXTracker’s experience with the projects it is supplying to? What has been your customers’ experience?
Early on in the company’s history we diversified our supply chain. This allows us to meet customer site construction timelines and requirements. While we experienced a slight contraction as we all tried to figure out how we could safely proceed with installation schedules, most of the projects we had anticipated completion did so without much interruption.
Solar is providing a triple win today of providing safe jobs, lowering costs for consumers, and improving air quality – all needed now more than ever to combat the pandemic. Solar is becoming more and more cost competitive compared to traditional energy sources, especially when the oil and gas market is plummeting, and coal plants are phasing out.
Remote monitoring solutions are proving to be extremely useful in the current situation. What is your perspective on the potential for these solutions in future?
Indeed, remote monitoring solutions are making it easier to commission projects – from both a speed and now safety standpoint. By delivering the most comprehensive portfolio of intelligent solar tracker and control software solutions for solar power plants, Nextracker is transforming PV plant performance with smart technology, data monitoring and analysis services. We have a command and control center located in our Nashville office in Tennessee. And 75 per cent of all our installed base has been connected. It offers solar asset owners and operators with extreme performance and availability advantages on preventive maintenance, digital O&M as well as performance-enhancing opportunities by up to 6 per cent with TrueCapture and NX Navigator.
While the short-term impact is visible in terms of delayed project development across the world, what can be the long-term implications of this crisis on the solar power sector?
We are not experiencing too much from the crisis in terms of slow down on deal signing, product deployment and overall construction. We are being very careful and working closely with our developer/EPC partners each and every day we start work on a given project site.
In the long run, the COVID-19 pandemic just presents an opportunity to adopt smart, green policies that favor solar investments, clean energy and green job creation.
Do you think this pandemic could shape the future of energy differently?
No, this will not take away our momentum. The cost has come down so much – we are winning on solar economics even without subsidies. Our mission is to make solar the leading source of energy, and therefore, to shape the future of energy.
What are the industry’s expectations from the government, be it in terms of stimulus package or duty exemptions?
Yes, we are cautiously optimistic – especially consider the current US Administration. Just a few days back, the US government’s House Ways and Means Committee introduced the Growing Renewable Energy and Efficiency Now (GREEN) Act as a part of the $1.5 trillion House infrastructure package. The bill would push out deadlines for the solar Investment Tax Credit (ITC), which is the biggest incentive driver in the US solar industry. It also provides a direct payment option for the ITC. At the same time, support is growing for solar and a bipartisan letter led by Representatives Cook and Panetta was released on last Friday.
In many other regions and countries as well, climate change and renewable energy industry legislation is moving in a positive direction. Take for example India – where recently proposed draft bill, the Electricity Act (Amendment) by the Ministry of Power will bring about the much-needed reforms in the renewable energy sector, such as cost-reflective tariff, simplification of tariff structure and reduction of cross subsidies. All this movement is a positive indicator. The global solar industry is expecting smart policies as such so that solar adoption can grow and drive economic recovery across the globe.
The recent oil price shock has the industry divided in terms of its impact on clean energy investments. What’s your take on the same?
We could not be more thrilled. The recent oil price shock can post a short-time negative impact since lower oil and gas prices make clean energy less competitive. Some oil companies could switch their focus to natural gas production, driving prices down than renewable energy. However, it can also make a long-term positive impact on the clean energy investment as a turning point for the clean energy transition as ESG investing has been a market trend in the past few years. Clean energy investment just makes economic and environmental sense in the long run.
What new trends and technologies can we expect in the solar module tracking space after the market opens up?
Just to be clear, the market is OPEN. The U.S. Midcontinent Independent System Operator (MISO) and WoodMac’s COVID installation forecast trend as well as the data from National Solar Energy Federation of India (NSEFI) in the Global Market Outlook report by Solar Power Europe point towards that.
Source: Wood Mackenzie
As you can see, despite a number of challenges strongly exacerbated by COVID-19 in 2020, the Indian solar sector to a large extent remains unaffected.
Source: National Solar Energy Federation of India
We’re witnessing the ongoing professionalization of the solar sector every day. The forecast for solar installation or deployment is overwhelmingly excellent now and it will continue to accelerate.
While continuing to lead the industry with our state-of-art design and engineering at Nextracker, we embody cutting-edge innovation and pioneered in smart solar tracking technology with meticulous R&D and engineering.
Early this year, we released NX Navigator, a next-generation software and smart control system which enables power plant operators to efficiently monitor and securely control their solar assets for increased production and reliable operation across a wide range of weather conditions. In 2017, TrueCapture Small Control System was launched. As an intelligent, self-adjusting tracker control system, TrueCapture can increase typical PV power plant energy by 2–6 per cent through continuously optimizing the tracking algorithm of each individual row in response to site features and changing weather conditions.
We are continually and consistently optimizing our hardware and software systems for top performance. Whether offering solar tracker software-based upgrades to increase energy yields in non-peak sun conditions, reimagining tracker design or stow positions to optimize for wind or adding advanced data analytics, at Nextracker we are redefining premium performance.
At the end of the day, we want to add value for customers to boost their bottom line, either through high performing smart solar tracking systems or other system infrastructure solutions.
