Tracking the Bright Side
Dan is CEO of NEXTracker, a designer and manufacturer of advanced solar tracking systems. Dan’s designs have led to some of the most significant breakthroughs in solar energy efficiency throughout the industry. Dan speaks about his entrepreneurial lessons through his rise to CEO, as well as on his optimism for why the sector is poised to shine even brighter.
Tell us about your entrance to the solar industry, what drove you to the sector? Do you feel the same way about the sector today?
I got involved through fortuitous circumstances. I was working at PG&E (Pacific Gas & Electric) doing traditional electric transmission planning and operations in the mid-eighties. I saw the opportunity to work in the research and development department and that sounded exciting. I’d been working on providing electric reliability through transmission planning, thinking about the opportunity to strategically locate modular generation at key places in the electric grid to improve the reliability. As soon as I started reading about photovoltaics, I thought that would be a great option. So literally the first day I went in to meet with them, I proposed that we select a plant that was tuned to the transmission distribution system and that ended up happening a few years later as part of the PVSA project, which to my knowledge actually ended up being the largest plant built in the decade of the nineties in the Americas. It was part of a national research project with the U.S. Department of Energy. Once the plant was built, we empirically measured the benefits to the grid. They were tangible, concrete and quantifiable. We published dozens of peer reviewed technical papers on the subject. Much of that work served as the analytical underpinnings for net metering and other policy activities to further promote the solar industry. As a young engineer, the research and development department was a rich environment. We were exposed to a lot of great ideas. I’ve had two aha moments. The first was that solar could uniquely benefit the grid… The second was when I was up in the Altamont Pass in Northern California — which at the time that was the largest wind power area in the world. And looking out as far as you could see were about 500 megawatts of wind turbines. It inspired me to do something like this at this scale and do it with solar. That project ultimately came to fruition. For perspective, it took about 16 years to actually build 500 megawatts. Fast forward to today, at NEXTracker our weekly capacity is 500 megawatts. It took us – the industry - 16 years to build out that kind of volume. And now at NEXTracker we’re docking that out every week. It’s incredible how far solar has come.
Do you feel that this growth will continue its acceleration or will it begin to slow anytime soon?
I think the growth is going to continue pushing innovation. The economic fundamentals are strong. We’re going to keep seeing progress. At first we were subsidized and we were competing in places where solar had unique benefits: where it was super sunny or there was a local state subsidy. For utility-scale solar, those requirements have gone away. Now that we’re installing in geographies that don’t have the best sun or where challenging terrain exists and we don’t need state subsidies. Solar is coming in at half to a third to a quarter of the cost of polluting assets and the risks are considerably lower. We got to this amazing place three years ago when solar became the most cost-effective new resource. Well, now we’re at a place where it’s lower cost than the existing marginal costs of production of coal. We’re seeing these coal plants dropping like flies over hot fire. Recently one of the largest U.S. coal fire plants, the Navajo generating facility out near the four corners, has dropped. And that was a couple of gigawatts. Even though it was fully paid for and depreciated, it could not continue to operate economically because the marginal costs were above the current levelized costs to produce renew-ables and other resources. Given that we’re in this great economic place, we feel good about it. We were quite concerned, a year and a half or two years ago when the then U.S. Department of Energy Secretary, Rick Perry, tried to get these bogus subsidies to support coal and nuclear under the inappropriate banner of grid reliability and resilience. Fortunately, that failed. We now celebrate Perry’s departure from the U.S. Department of Energy. Evil forces haven’t been able to slow this thing down. We’re excited about prospects for accelerated growth. There’s a tremendous technology story related to all things solar. From the solar cells moving toward Mono PERC to better ways to put modules together with shingled cells, bi-facial pan-els and then to advances in components like glass in the modules. There’s also an amazing story on trackers. NEXTracker has revolutionized this technology by incorporating a smart yield enhancing control system called TrueCapture — which pro-duces up to 6% more energy per site. We continue to build on these advances that improve the economics of solar relative to other forms of power generation. Financial institutions have accepted this technology as the lowest risk way to make electricity. The number of locations is growing, we’re getting support to create value-added manufacturing in panels, in optimizing our global supply chain, construction, professional skills development, improvements in long term operation and performance, maintenance and financing— all these things are coalescing. It’s a beautiful story and we’re on the winning side. We’ve completely changed the largest industry in the world, the power sector. We’ve put it upside down in a few decades. It’s extremely gratifying to be in this place.
Are there any initiatives at NEXTracker that you are most excited about?
Well, first we revolutionized trackers. Years ago we introduced a balanced tracker at the center of mass that required less energy than previous systems, which allowed each tracker row to be independently operated by small solar panels on the row itself which avoids needing to run power out to the field. This self-grounded, independent-row architecture radically lowered operations and maintenance costs for cleaning and vegetation management. It had a tremendous amount of connectivity and instrumentation and data capture that allowed us to continuously learn about the health of the plant. That was in the beginning. Two years ago we introduced the True Capture smart control system which produces more energy by dynamically operating the angle of the tracker to be optimized relative to the adjacent structures as well as to changing atmospheric conditions. This is pushing the industry again to think about performance optimization. Today we have over five gigawatts of projects operating with TrueCapture amounting to dozens of projects on three continents. This is the big first thing to alter tracker algorithms since my days at PG&E where a team of us introduced backtracking in 1991. Now we’re developing software, further connectivity, deploying predictive analytics to increase the output out of these systems. This past fall we launched a separate, second tracker platform, adding to our tracker portfolio. The first one is one panel-in-portrait called NX Horizon. The second, known as NX Gemini is a two-in-module-portrait architecture, allowing for a shorter row system yielding the highest power density of any tracker on the market today. It’s also designed to have an extremely efficient foundation profile for sites with challenging soils and terrain. We can now address virtually the entire serviceable market. Both tracker systems have been designed with an evolved control system for plant optimization, including a weather system, weather stations, inverters and energy storage. It’s playing out quite well for us.
What are some of the most important lessons that you could share with entrepreneurs that are trying to build zero carbon energy systems?
The most important thing is getting your team right and that relates to any business. It’s important to build good relationships with the leaders in the company and to create an environment that engenders the best ideas to come forward, not necessarily the loudest voice. This provides upward mobility in career advancement. It’s also important to generously distribute equity throughout the company. Those are part of our core values. If you look the leaders in our company, some came in at entry level positions. They’ve been rewarded through their hard work and ingenuity and team ability to ascend. By far the most important drivers are getting the team right, investing in people and rewarding them accordingly. We also believe in a high degree of transparency. We consistently share information with staff about our strategic direction, what’s working, what’s not, what our challenges are and our plans on addressing customer pain points. It’s important to build culture and establish communication across teams. It’s easy for people to stay with you in good times but when things get difficult, what’s going to keep them with you is how you treated them in the hard times. We really believe in this. With respect to building teams in the renewable energy sector, we look for folks that are mission driven. Building a great company is fun and thrill-ing but changing the world in a positive way is a different level of satisfaction. Engaging and attracting a diverse talent pool. We want both. We want people who are interested in building a great company with a high degree of professionalism. These types of people tend to stay with you for the long term; and of course, when you invest in people, you don’t want them to leave. Other lessons we’ve taken to heart is that we like to really try to put ourselves in the shoes of our customers, understand their pain points and how our products and services can add value for them. We want to make it easier for them to do their job of implementing solar power. We think about that a lot and try to take care of our customers by offering exceptional service. By listening and responding to ingenuity, soliciting their inputs into the product and the business process and into our model, they then come to have a vested stake in NEXTracker, they have ownership of our success and that’s served us well over time. We founded our company six years ago and our goal was to be number one in our space in three years. We did it in two. We’ve been able to maintain strong global market share with a 30% leadership position for four consecutive years. We’ll see what the numbers say for this year, but we feel good about it. We do more than the next three or four competitors combined in any given year. It comes down to the team and stability of the mission and vision to make solar the number one source of energy in the world and then to operate with a lot of integrity and essentially do what we say with customers. These are the big principles I want to share with entrepreneurs. To aspiring younger entrepreneurs that want to found companies: If you have this part right, the other things usually work out.
What are the biggest obstacles to a 100% renewable energy economy in the US?
It comes down to communication and policy. There was a narrative out there about government regulation and war on coal that was erroneous and not based on political fact. We are focused on key messages. One, solar works technically. Two, it lowers costs and three, it creates economic opportunity. We have five times more jobs per megawatt with solar than the polluting power generation like coal. Solar could provide energy independence from foreign sources. It leverages technology and innovation and allows for clean air and clean water. These are key messages we’re promoting and they are being received well across the political spectrum— independent of geography or political affiliation. The public want their energy from the sun. The problem ten years ago was that the cost to produce solar was high. Now it is among the lowest cost options. This message is not yet understood. We get it in our industry and it’s understood in certain geographies. We need that message broad-casted everywhere. The technical barriers for wider adoption are solvable. Storage is part of that answer. Communication and control are also part of the answer where customer loads can be operated more dynamically. For example, if you’re charging your car, does it really matter to you if you’re charging at 25%, 50% or 100% of full capability if you know that your car is going to be charged at the end of your workday? Probably not. Knowing how certain homes or appliances are operated provides dynamic flexibility to integrate renewables into the electric grid. It’s quite solvable and low cost. I don’t see any major issues with getting to very high levels of grid penetration. The grid in California is already about 34% and it’s going to have 50% within 10 years. However, the national grid only has 2.5% percent solar. That’s great for us. There’s a tremendous growth opportunity before us. We’re going to grow, commercialize this technology, kill the dirty technology and bring on more solar. These coal plants keep dying and the nuclear plants are dropping, we can go head to head with gas and generally wind. We’re setting our sights for an even bigger pie, which is to not only be number one in the energy sector, but to convert several appliances in the home from gas to electric.
In California, several cities have passed new ordinances for new home construction. There’s no gas. It’s to be all electric and we really believe in this effort. I’ve personally converted several of my houses to electric to both save money and prevent emissions. We need to stop heating water by burning gas and use electric heat pump technology to provide a cleaner overall environment, especially in the home and we plan to power all of it with solar. We are setting very high goals to not only succeeding in the power industry, but succeeding in the building and transportation sectors, moving away from oil to electric powered mobility. Beyond cars, we’ve seen the scooters take off, the high-speed rail is under construction in California and electric buses are integrating rapidly. Tesla also recently introduced an electric pickup truck and there were 2 million pickups sold in the country this year. Bottom line, there is a huge opportunity for solar to contribute to the power sector, but also the building sector and the electric mobility sector as we transition to a renewable-powered economy.
What advice would you give to your 21-year-old self?
My advice is to go with your instincts and don’t be afraid to take risk. To focus on the idea that what you’re doing in some ways is less important than who you’re doing it with. You need to find the right people and then set out to do something big that adds value to customers. You must also fully commit. I tell young people in these entr
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