• Solar hardware maker Nextracker scores $638M in 2023’s biggest IPO so far
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Solar hardware maker Nextracker scores $638M in 2023’s biggest IPO so far

Eschewing the SPAC siren song, the tracker manufacturer went public in an old-school IPO that exceeded analysts’ expectations.
By Eric Wesoff

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hundreds of black solar panels in an array in a valley surrounded by mountains
The Quilapilún solar plant in Chile uses Nextracker's solar trackers. (Atlas Renewable Energy)

Nextracker, a company that makes solar trackers, launched its initial public offering last week and did it the old-fashioned way — by growing revenue and profits in a manufacturing business. Nextracker sold 26.6 million shares of its Class A common stock at $24 apiece, at the higher end of the indicated range, giving the company a valuation of over $3.5 billion and raising $638 million in proceeds.

Solar trackers like Nextracker’s optimize power plant output for utility-scale project developers and builders by enabling solar panels to follow the sun as it moves across the sky. Nextracker’s product design relies on a more distributed architecture that allows the company to more fully take advantage of price drops in motor and control technology.

Founded in 2013 and incubated for a year within solar module maker Solaria, Nextracker raised venture funding, grew spectacularly and was acquired by contract manufacturer Flex for $330 million in 2015. Private equity firm TPG invested $500 million in Nextracker last year, in preparation for it going public as a separate company. Nextracker shipped 15 gigawatts’ worth of trackers in 2022.

Nextracker generated revenue of $1.2 billion, $1.2 billion and $1.5 billion in the fiscal years 2020, 2021 and 2022, respectively, along with net income of $118 million, $124 million and $51 million across the same three fiscal years, according to its S-1 filing with the SEC.

Nextracker’s closest competitor is Array Technologies, which went public in 2020, raising just over $1 billion. On its Q3 2022 earnings call, Array forecast that its full-year revenue for 2022 would be in the range of $1.5 billion to $1.6 billion.

Solar wave

Nextracker has been part of the U.S. utility-scale solar industry’s decade of blistering growth, a wave that shows little sign of slowing down, despite some recent hiccups. There are more than 91 gigawatts of utility-scale solar projects currently operating, with another 91 gigawatts under development, according to the Solar Energy Industries Association.

Analysis firm Wood MacKenzie forecasts that the global tracker market will be a $71 billion cumulative opportunity in the 20202030 timeframe, with approximately 682 gigawatts of solar capacity expected to be installed over that decade.

Nextracker CEO and founder Dan Shugar said in a July episode of the Factor This! podcast, which is produced by Renewable Energy World, that the pandemic and recent logistics crises provided an opportunity to reimagine the solar supply chain with cleaner steel mined, melted and made in America. Seizing that opportunity, Nextracker and BCI Steel, a Pittsburgh-based steel fabricator, reopened a historic Bethlehem Steel manufacturing factory that’s been retooled to produce solar tracker equipment. It was the third domestic solar tracker fabrication line Nextracker commissioned in 2022.

Flying with CEO Dan

Nextracker’s traditional” public offering stands in contrast to the special-purpose acquisition company (SPAC) route that a number of energy companies have taken to a public listing. Companies such as QuantumScape, a pre-revenue solid-state battery company; Energy Vault, a company that pivoted from its original gravity-storage business plan; and Heliogen, which is attempting to revive concentrating solar power, have all gone public in reverse-merger SPAC style.

How Nextracker and these other companies will spend the proceeds they’ve raised differs significantly: Nextracker will use the capital to scale its business to 20 or 30 or 40 gigawatts of production per year. SPAC-funded companies like QuantumScape will use the money for research and early product development.

Shugar has seen the costs of solar power production drop more than eightfold since he was at solar pioneer PowerLight. That firm built the world’s first 10-megawatt solar project (in 2004) and was acquired by SunPower in 2007.

Before the SunPower acquisition, I shared a plane ride with Shugar and watched him survey the landscape as we landed in Palm Springs, California. He said that he saw every flat roof as a potential customer.

That single-mindedness and drive have allowed Team Shugar to execute and succeed at scaling solar into the coming terawatt era. 

Eric Wesoff is editorial director at Canary Media.