Catalyst with Shayle Kann - The reshoring of American solar trackers [partner content]

Episode Date: July 17, 2024

While we were all at home during Covid desperately trying to get our hands on toilet paper, exercise equipment, and home furnishings, solar executives like Dan Shugar were trying to get steel and power electronics to massive PV farms under development. As equipment and workforce disruptions spiraled due to lockdowns, the cost of installed solar started going up for the first time in nearly a decade. “Costs just skyrocketed. And so at this point in my career. I wasn't going to proceed like that,” explained Shugar, the CEO of Nextracker, the world’s top solar tracking company. It became very obvious that Nextracker had to build more US manufacturing to serve local markets, where utility-scale PV was still booming. And within a couple years, they built a large network of factories. “We've catalyzed over 20 factories across the United States with over 30 gigawatts of major components being manufactured here and shipping finished goods today. That's just a huge retooling of the supply chain,” explained Shugar. To date, Nextracker has shipped 100 gigawatts of trackers. More and more of them are being produced in key locations around the US. In this episode, produced in collaboration with Nextracker, Stephen Lacey speaks with Dan Shugar about progress in onshoring, innovations in tracker technology, and where the solar industry is headed next. Learn more about Nextracker’s efforts to bolster domestic content for solar power generation in the US.

This is a branded podcast from Latitude Studios. While we were all at home during COVID, desperately trying to get our hands on toilet paper, exercise equipment, and home furnishings, solar executives like Dan Sugar, were trying to get steel and power electronics to massive PV farms under development. Deliveries through ports, overseas rail, and trucking

was significantly delayed due to congestion and sort of a breakdown in the global logistics system. European Space Agency satellite images capturing the congestion of cargo ships backed up around the Shanghai coast. Some 344 ships snarled in the port of Shanghai. As lockdowns grew, the equipment and workforce disruptions spiraled. And the cost of installed solar started going up for the first time in nearly a decade. Wood McKenzie has slashed its 2022 growth forecasts for the U.S. solar industry.

This is thanks to supply chain problems, rising costs, and policy uncertainty. Costs just skyrocketed. We saw commodities like steel, for example, double in a quarter and costs of logistics triple in some lanes. And so at this point of my career, I wasn't going to proceed like that. So we essentially embarked on a strategy to retool our supply chain very significantly on an accelerated time frame. Dan is the CEO of NextTracker, a company with the biggest global market share of solar trackers. And it became very obvious that NextTracker had to build more U.S. manufacturing to serve local markets, where utility scale PV was still booming. We've catalyzed over 20 factories across the United States with over 30 gigawatts of major components being manufactured here in shipping finish goods today. That's just a huge retooling of supply chain to give you a sense of scale. you know, it could be well over 1,000 trucks a week of material that's being fabricated.

Next tracker has shipped 100 gigawatts of trackers since 2013. That's twice the peak load of the state of California. So you can imagine how many projects that is. And although the supply chain crunch was a very difficult moment, it resulted in more onshoreing of production and a surge of U.S. solar jobs. It's quite a symphony. And that was only possible due to this hybrid. strategy of manufacturing within local markets. It's sort of like bolting on the wing of the airplane

while you're going down the runway for takeoff. The Inflation Reduction Act and the industry's push to make supply chains more secure are creating a boom in U.S. Clean Energy manufacturing. In this episode, producing collaboration with NextTracker, Stephen Lacey speaks with NextTracker CEO, Dan Sugar, about progress and onshoreing, innovations in tracker technology, and where the solar industry is headed next. So it's happening. And the IRA is really more of a jobs bill than anything else. So most recently, you tripled capacity at a steel facility in Pennsylvania, and this plant used to be a steel mill supplying material for ships in World War II.

And we're seeing other stories like this across the industry in the wake of the IRA. How's America doing in its progress and reindustrialization? This particular facility, it's in Leedsdale, Pennsylvania, a suburb of Pittsburgh, at one time was a Bethlehem Steel manufacturing facility, and it had been dormant for many, many decades. As recently as the late 70s and early 80s, over two-thirds of the global steel was actually manufactured in that region and then was transmitted on the river system,

in this case, that facility's right on the Ohio River. You literally, with the cranes, can load barges for transport. Now, Ohio connects to Mississippi, which goes to the Gulf of Mexico and so forth. forth. And so there was a legacy there for manufacturing know-how, for infrastructure with the port system and the locks and so forth that are used in that region and to be able to leverage that infrastructure in this specific facility. And in that exact building, they had actually manufactured land and craft that were used to support the Normandy landing in World War II.

So we had this, a lot of this infrastructure. But there was actually a a lot of work to reestablish skill sets in that facility, which is reflected on many of the other projects that we've been involved with starting up, for example, in Memphis, Tennessee, in St.on, Texas, Phoenix, Arizona, and many of the other places that we've been supporting manufacturing expansion. The granddaughter of one of the workers that worked in the original Bethlehem facility was back on the floor in this facility, actually manufacturing now solar products instead of other technologies. So steel is one of these industries that's notoriously difficult to decarbonize. But moving in the U.S., which is predominantly using recycled steel, we were able to move the needle

and significantly reduce the carbon and environmental impacts of the raw material production. The energy policy through the Inflation Reduction Act is really, resulting in high quality enduring clean energy jobs. And so it's proof positive at the Pittsburgh facility and some of the other facilities that we've been involved with around the country. So it's happening. And we're seeing that not only at NextTracker, but throughout the solar and clean tech industries with over 100 factory announcements that are happening and we're seeing a ramp up throughout the value chain. What do you think we'll say about the, impact of the IRA a decade from now? I believe we'll look back and we'll be able to say that the IRA

was really probably the greatest jobs bill that's ever been created. And Stephen, you know, there was a lot of talk a year ago, year and a half ago that the country was headed to a huge recession. It didn't happen. And I believe one of the reasons it didn't was that we had really good policy. We had the bipartisan infrastructure bill. We had the Chips Act that passed. So a lot of lot of onshoreing of semiconductor manufacturing across the U.S. And we add the IRA, which passed, which is providing over 100 new factories in clean energy jobs as we were just covering. And I think the combination of these factors has created a tremendous momentum around re-industrialization and getting folks back to work. We've seen the unemployment rate drop to historic lows.

The economy is doing great. You know, Wall Street's just hit. record, record values. So looking back, my hope is that the IRA, you know, will remain a key leg on that stool. So I think we're in the, really in the inflection point of just a unbelievable transformation in power generation. And it's, and at a time when we're seeing the greatest need for power we've seen, you know, in the last three or four decades. So the policy that happened with the to unsure could not have come at a better time. And it's at a moment when we're seeing this great need for new energy. So you've got 100 gigawatts of trackers out in the field globally. What's changed evolved the most in tracker design over those deployments in years? Well, I'd like to take a

little longer view, not to be the grand old man. Okay. But I've been involved in solar since the 80s. And I've been a tracker proponent that whole time. So here at Nerember. Tracker, our president, Howard Wenger and I've been collaborating and working together since the 80s. And Howard is amazing. And he had done, he had authored some amazing solar simulation software called PV Grid. And there's many folks who are familiar with PVSys. Howard's model, which predated PVSys does the same types of analysis. And we had using his tools 35 years ago, had evaluated many different ways to build solar at scale and down-selected single-axis tracking on horizontal trackers

as sort of the killer app. And we authored some papers on this and built projects in the 90s using trackers. Well, when at a prior company, we scaled trackers, we actually used this single-axis horizontal tracker, and we used a linked row tracker. this was, again, like 30 years ago. The reason we did was at the time a motor drive controller was quite expensive.

And so the thinking was, let's use one really good motor drive controller, but we'll link together 20 or 30 rows of trackers, similar to as you would of Venetian blind. That technology works. It's reliable. And we built many dozens of projects over the years back at my prior company. The issue with it is that you have a mechanical impact. from vehicular traffic through a field to deal with vegetation management or panel cleaning

or operations and maintenance. So when we founded NextTracker, we had a great CTO who's still with us, Alex Al, who really championed the idea of an independent road tracker to not only allow mobility through the tracker field, but also reduce the amount of grading and facilitate rapid construction. We decided to move forward with that. That architecture allowed us to embed a tremendous amount of sensors in the tracker, for example, integrated angular measurement or in clonometers. We can also, we're also measuring like the motor current and the voltage on each tracker. And this very granular, very accurate information allowed us to then introduce a range of additional technologies. For example, our true capture control system, what that allows you to do is really optimize

the angle of each tracker relative to its neighbor. The trackers are balanced. They move very quickly. They use very little current. Having, though, these embedded sensors in the systems with integrated unerruptible power supply to make sure that the trackers can work whenever the customers need them to, unlocked a range of technology. So later, about halfway through the NexTracker's life, so about five or six years ago, solar panels migrated to panels that are using one-half cell compared to a full cell as they were originally made.

Cells are now being diced in half or into thirds because that has advantages for the solar cell, but it also has advantages in how you track. You can, we invented a third mode of tracking, we call split boost. We, using the embedded sensors and technology and wireless mesh network and connectivity, we're able to basically get more energy out of these solar panels and then control them for a wide range of extreme weather. For example, we have flood sensors embedded, snow shedding, hurricane snow, hail snow, technology. We've seen an increase in extreme weather, and to be able to control the solar panels very quickly.

Additionally, as bifacial really became commercialized, our tracker was contemplated for bifacial, but 10 or 11 years ago, we didn't see that many bifacial panels on the market. Today, most of the crystalline panels are bifacial. So using the inherent architecture of the system with the balanced architecture, we're able to capture. we're able to capture more light on the backside of the solar panels. So this platform has allowed us to essentially capture granular information and provide ever-increasing speeds of control and then provide diagnostic capability of customers

and essentially squeeze more energy out of the system while we're lowering the cost of construction and lowering cost of operation. Those are the basis for levelized cost of energy. And what we're trying to do is deliver the lowest cost. of energy for owners so they get the highest unlevered investment and return on investment. Underpinning all of this is machine learning. You know, you've really focused on machine learning when True Capture was released back in 2017. And I'm wondering since then, what have been the biggest advancements in machine learning? And if we think about the role of AI and improving

yields, squeezing more out of the system, and then integrating renewables in a constrained grid. Do you have any thoughts about how important the technology is? Yeah. We purchased a machine learning company in 2015 or 2016, and that team complemented our existing software team. This was extremely complex stuff. You're essentially, if you can imagine a utility scale plant, you might have 20,000. 35,000 trackers, each one of which is as long as a football field, on over-undulating terrain. And you're trying to optimize the angle of every tracker relative to its neighbor in the early morning and late afternoon when you're building over hills.

And then later, when we had true capture, then become compatible with our extreme terrain-falling trackers. So now imagine those trackers are undulating to follow the terrain to minimize grading costs. Well, how do you optimize the angle of every one of those trackers so it doesn't shade the neighbor? We've seen some other providers do techniques where they have field tuning or folks technicians in the field. You just can't, that's impossible to be able to dial in accurately each tracker relative to its neighbor, you know, because the meteorological conditions are changing over the year, the sun angle is changing. and you really wanted to optimize not for a specific day, but rather for, you know, on an annualized basis

to get the most amount of energy out. And that's only possible with machine learning. And so, and you have to understand the geospatial positioning of these trackers relative to each other. One of the things that was really helpful in us doing that was to have serialized tracker information, meaning each tracker has a unique identifier where there's a, there's a barcode, a serial number on the motor, the drive, the controller.

So the system understands where it is relative to its neighbors. And then as we've gone forward in time, we've invested a lot in this area to support the customers for commissioning, rapid commissioning and automated commissioning, and to be able to drive this out and allow the systems to adapt to these various conditions. recently another innovation we started deploying which uses these techniques is what we call zonal diffuse. Previously, we operated the system monolithically, meaning if it were perfectly sunny, we kept all the trackers perfectly perpendicular to the sun. If it was totally cloudy where you had a tremendous amount of isotropic diffuse irradiation, we tended to keep the trackers closer to horizontal.

Okay, and if it were somewhere in the middle, the whole field would be somewhere in the middle depending on the degree of cloudiness or sunniness. Okay. But in many areas, you actually have rapidly changing cloud conditions. For example, I grew up in the Northeast. You have cumulus clouds, and you have areas of like blue sky

and dark clouds that are changing through the plant. And some of these projects were involved with. They're huge now. they could be five or ten square miles. So what's better ideal is to be able to dynamically operate the system. For that to happen, you need a tracker that's very responsive, and you need the software to be able to adapt to these conditions quickly and then also to provide feedback to make sure that the system is operating as intended.

So again, it's all around squeezing more energy out of these systems. And what do you think the role of AI, and renewables optimization will be broadly? I mean, the notion that OG we're going to hit like an upper limit on renewable penetration in the grid because the resources can't deliver when the power is needed. I think that over time, A.L. be really helpful in us getting much higher levels of penetration.

For me, this is one of the most exciting frontiers in renewable energy is basically using intelligence to control these, these systems. You add to that, you know, the opportunity for regional transmission operators to be able to share energy between networks. And I think there's the opportunity of lower cost for customers while we're driving to an increasingly electric grid and end uses for loads. You are just this repository of experience and execution, and you've been in the solar industry since the 80s. So I have to ask you, when you started in solar, is there anything that happened faster than you expected? And is there anything that maybe didn't happen quite as you expected?

When I first started in solar, I was one day in the Altamont Pass, actually looking at the largest wind farm in the world. It was 500 megawatts. And I was thinking, wow, if we could do this in my career, that would be amazing, in solar. Okay. And so at the time, there was just a handful of megawatts reconnected in solar. And so we hit that 500 and then just kept powering through that. Now we're doing all for 500 megs a week.

Okay. So I underestimated what the growth of solar would be and could be. And I think we're going to continue to see solar break away from a growth standpoint. In terms of things that have taken longer,

I mean, when I was in engineering school back in the mid-80s, people were talking about fusion power, being available in about 25 years. That still feels like, you know, 25 years away, if ever. So, but solar has exceeded all my expectations. It's been a real gift to be part of it. And really looking forward to what's upcoming. Over the last decade, Next tracker has installed 100 gigawatts of solar trackers on five continents, with environmental stewardship and supply chain transparency at the core of the design process.

NextTracker is actively engaged in public policy, workforce development, and related issues. Learn more about NextTracker's efforts to bolster domestic content for solar power generation in the U.S. and its latest product market, a low-carbon solar tracker with 35% less embedded carbon at nexttracker.com.