Have tracker, will travel

Solar tracker companies are becoming more active in the far corners of the globe as utility-scale demand mushrooms in new country markets. Some European companies already sell the majority of their trackers outside of their home country. But U.S. tracker companies, primarily focused on the domestic market until now, are preparing for more overseas sales as the 2016 deadline for the federal tax benefit approaches.
Cormac Gilligan, Senior PV analyst at IHS, puts forth the opinion that the existing U.S. share of new global tracker installations will fall from 45% over the past three years, to around 20% for the next three years. If that prediction comes to pass, tracker companies dependent on the U.S. market for revenue will be forced to become more international in order to survive.
At the same time, global tracker installs will swell the overall value of the market, Grand View Research suggests. Analysts there predict that the single axis tracker market will increase from 3 GW to 4.5 GW over the next five years. Adding dual axis installations, which are forecast to continue but not accelerate year-on-year at 1.5 GW per year, the total tracker market will hit 7 GW globally by 2020 and be worth $2.12 billion.
IHS also predicts that global single axis tracker revenues could grow 120% to almost $2 billion in 2019. “I think we’ll see a huge surge of single-axis installations in the future,” says Gilligan. This year, single-axis trackers will exceed fixed-tilt installations for the first time in the Americas, IHS adds.
One reason that trackers are gaining ground is that prices have continued to fall. Several manufacturers suggest that over the last year, tracker prices have declined by 30%. Furthermore, tracker pricing has begun to balance out in the global market, the manufacturers say, so that product lines can compete more on their merits.
Tracker quality has increased as prices have decreased, so that operations and maintenance are also expected to cost less. The drive to higher quality has come in part from the due diligence that financiers have paid to tracker system analysis through bankability studies, especially in very large projects.
Several tracker companies have launched new versions of their products in the past year, including but not limited to Array’s DuraTrack HZ v3, NEXTracker’s self-powered unit, and Exosun’s HZ tracker.

Latin America the next market?

Where to pursue international tracker business is thankfully a rich topic for manufacturers. Array Technologies, Inc. (ATI) has “taken the dive into international markets, working to identify the size, timing and risks leading up to country decisions,” says Thomas Conroy, the new President of the Albuquerque-based company. “Latin America appears to be the biggest near-term opportunity, but the Middle East also presents fantastic opportunities and [these] are the most strategically obvious for the medium and long term,” he says. “The Asia-Pacific region is also promising: We are currently pursuing several projects in Australia, which holds tremendous possibilities for growth.” “Array is not inexperienced in international markets: We have sold trackers into 20 countries over the last 25 years,” points out Conroy. “In 2012, we opened our first international office in Chile, and our next large countries of interest in Latin America are Mexico and Brazil,” he says. “ATI’s goal is to grow our non-U.S. sales to be 50% of our total business over the next two to four years,” he says.
Latin America will be the fastest-growing global region for tracker installations for the next five years, reckons Grand View analysis. “Latin America is anticipated to be the fastest growing regional market, at an estimated com xAdvertisement
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pound annual growth rate (CAGR) of 22.5% from 2014 to 2020.” The analysts single out “increasing demand for electricity and rising concerns for sustainable and renewable energy, especially in Brazil, Mexico, and Argentina” as a chief reason behind increased solar tracker market growth in the region over the next six years.
Clavijo has also recently begun working with Canadian Solar in Brazil, where negotiations for a 300 MW plant are being finalized. Elsewhere in Latin America, the tracker maker is working with Madrid-based Isolux Corsán Group on a PV project in Honduras.

Africa and the Middle East

Similarly, Exosun is pursuing Latin American countries including Chile, Brazil, and Mexico, but also sees “expansion in countries like South Africa, and maybe India and China, but we choose not to be present [elsewhere] in Asia, because you can’t do everything at the same time,” says Jean-Noel de Charentenay, Director of Strategy and Public Relations for the Martillac, France-based company. “Within six months, we expect 60 to 70% of our sales to be outside of Europe,” he adds.
IdeemaTec also is focusing on several of these regional markets. “We have new projects in Chile, Mexico, and Namibia, and have offices in those countries and in Turkey, as well,” says Axel Hartung, Director of Global Sales and Marketing for the Wallerfing, Germany-based company. “About 90% of our sales are outside of Europe already,” he notes, adding that the company has sales in multiple countries in Europe, Africa, and the Americas, including growing U.S. sales.

The lure of China

China is also a target of several large tracker providers. “There is definitely opportunity there, but it is a market that must be considered very thoughtfully because you do business there differently than in any other country,” says Dan Shugar the CEO of NEXTracker, based in Fremont, California.
SunPower in May announced a partnership with Apple to build two solar power projects totaling 40 MW in ABA Tibetan and Qiang Autonomous Prefectures, in the Sichuan Province of China. The projects will be co-owned by Sichuan Shengtian New Energy Development, SunPower’s project development joint venture, and Apple. The projects utilize SunPower’s LCPV single axis tracker and SunPower Maxeon cells, and is slated for completion this year.
SunPower also announced its Shengtian partnership in China in October, involving Tianjin Zhonghuan Semiconductor, Sichuan Development Holding, Leshan Electric Power, and Tianjin Tsinlien Investment Holding to develop and own at least 3 GW of photovoltaic power plants in China. SunPower has committed $20 million to the venture, the company reports.

Strategic EPC partners

Like SunPower, many other tracker makers are partnering with regional if not global engineering, procurement and construction companies (EPCs). “In some countries we are observing that local EPCs are winning the business, and partnering with them is a solid market entry strategy, but we still will analyze each region and each country, which may necessitate a different answer,” Conroy says.
For its first penetration of the Mexican market, Exosun selected Forza Systems, a Mexican solar PV commercial developer and EPC, to build its first project in the country, a 146 kWp pilot PV plant in Caborca, Sonora State.
NEXTracker has worked with groSolar and SunEdison as EPCs in the United States, and more recently with SunEdison in Chile and Honduras. With a 1.85 GW purchasing agreement involving “an aggressive cost reduction road map,” SunEdison stands out as a global strategic partner for NEXTracker.
NEXTracker also just completed a plant in Australia with Madrid-based EPC Elecnor, a 70 MW project on the Moree Plains of New South Wales. “We also now have a small project in India,” notes Shugar. NEXTracker has offices in Spain, Germany, and Chile.
One unusual tie-up between a tracker company and a solar thin film manufacturer is the budding agreement between Spain’s Grupo Clavijo and Solar Frontier, notes Kevin Logue, the North American Business Development Manager for Viana, Navarra-based Clavijo. Since Solar Frontier earlier this year acquired the 280 MW U.S. project pipeline of EPC Gestamp Solar, Logue suggests that the new Clavijo partnership may mean the fulfillment of the U.S. projects with Clavijo trackers. Tokyo-based Solar Frontier has a U.S. subsidiary in San Jose, California.
Clavijo developed a partnership with Schletter several years ago to enter the South African market. This year, Clavijo added Abu Dhabi to its list of international offices.

Asian players target U.S., EU

While most major tracker makers are European or originate from the United States, some Asian companies are seeking to penetrate these two established markets. In May of this year, Topper Sun Energy, the Hsinshu-based subsidiary of Taiwan’s Big Sun signed an MOU with Gräss Solartechnik Schweiz, of Avegno, Switzerland, “for 100 MW of PV project business deploying its dual-axis iPV Solar Tracker system,” Big Sun reports. “The MOU follows on from the signing of an exclusive distribution deal for the iPV Solar Tracker in Italy and Germany with Taiwan-based wafer producer Sino-American Silicon Products (SAS), also the majority owner of Aleo Solar,” the company reports.
The Big Sun/Gräss partnership will help the tracker maker reach global targets. “Over the last three years, Big Sun Group has delivered over 1,500 sets of our tracker system to projects in Japan, China, and Taiwan,” the company reports. “We are actively engaging in a number of pilot demonstration sites as well in countries such as Germany, Poland, and the United States.”

Financial wherewithal a must

When considering global partners, financiers might seem to be a given requirement. “A financial partner is not currently in our tactical plan, but we are in discussions with multiple financial entities in the U.S. at the moment, so we’d be well positioned if we decided to offer adjunct financing or financial services,” says Conroy. “Ultimately, I would anticipate bringing those services in,” he says.
Producing bankability studies that are globally recognized is also a strategy some tracker companies are utilizing to compete in new markets. Big Sun recently announced a study by Black and Veatch for the former’s iPV Solar Tracker. One way that larger vertically-integrated tracker manufacturers are funding global development is through domestic spin-offs of completed projects. SunPower and First Solar in February announced the formation of a yieldco, 8point3 Energy Partners, which in March filed to list an initial public offering (IPO) with the U.S. Securities and Exchange Commission.
Similarly, SunEdison formed a yieldco, called TerraForm Power. In June, TerraForm Power announced the acquisition of 23 MW of operating distributed solar power plants from a wholly-owned subsidiary of Integrys Energy Group. Such acquisitions can generate income for the original parent companies.

Supply chains must expand

The combination of varying labor rates, local content rules, and shipping costs around the world dictate robust supply chains for global tracker players. “We are also in preparation to set up supply chains to support different markets around the world,” ATI’s Conroy says. “For the ATI project currently being commissioned in Chile, we shipped the majority of steel from the U.S., and we also procure components out of Europe and China. ATI is developing a more global production footprint across more countries,” he adds.
Clavijo also is building up its supply chain. “We ship to 19 countries including Japan and are working on a global supply agreement,” Logue says.
Similarly, “Exosun has manufacturing platforms in Europe and North America, and we are doing the same thing now in South Africa; by the end of this year, we will have one in Brazil as well,” says de Charentenay. “All the long metal pieces are manufactured locally, but we keep the manufacturing of high tech pieces, and some value-added parts like plastic with Kevlar reinforcement, in Europe,” he says.

Tracker market competition

Several tracker manufacturers suggest that the existing market is too crowded. “There are too many single axis tracker companies in the market,” Hartung says. “The issue of quality eventually may correct the situation,” he adds.
Inevitable new entrants, with poor quality products could tarnish the hard-won reputation that tracker companies enjoy. “Perhaps there will be a backlash from new entrants emerging from the fixed frame players,” suggests de Charentenay. “It might be easy for a startup to develop a tracker design, but once they get onto the field, they have to deal with problems. It is clear that there are not that many tracker companies with strong experience at this moment,” he says.
One diversified U.S. fixed racking manufacturer, SunLink, acquired a tracker company, ViaSol, in March. Such vertical integration will continue in the PV market, and increasingly, tracker companies are likely to be a part of any broader verticalization strategy.