Nextpower has become the "backbone" of the American solar industry by lifting solar panels and orienting them towards the sun, and this role is increasingly extending to a global scale. However, co-founder and CEO Dan Shugar might see his company as the "stem" rather than the "backbone" of this industry.

Nextpower focuses on solar trackers, which are those arrays and devices that operate slowly to keep the solar panels always facing the sun, in order to maximize the daily power generation of the solar panels.

"What the tracker does is just what sunflowers have been doing for millions of years," Shugar told Fortune, "They basically follow the sun during the day, and it's possible to generate nearly 30% more electricity as a result. This depends on the location and the design of the project."

Shugar indicates that Nextpower currently controls 55% of the US solar tracker market and approximately 30% globally. At the same time, the company has recently undertaken a round of acquisitions to enter the battery business and expand its solar product portfolio to cover almost all aspects except for the solar cells themselves.

This company has been established for 13 years, but last year it changed its name from Nextracker to Nextpower to reflect its increasingly diversified business model.

"We have evolved from a company that focused solely on trackers to a platform strategy, engaging in everything related to solar energy except for the manufacturing of solar cells," said Shugar. "And we are also involved in everything related to battery production except for the fabrication of individual cells."

Nextpower This year, the stock price has risen by 12%, and the market value has reached $15 billion. The company was also ranked 24th on Fortune's list of the fastest-growing companies this year.

This month, Jefferies energy analyst Julien Dumoulin - Smith has listed Nextpower as the “preferred target” for the institution in the utilities sector, as it represents “betting on the highest quality in an industry that has been completely overlooked.”

This analyst added that the clean energy industry hit rock bottom in the first two years after the new Trump administration took office and should begin to rebound after the mid-term elections and when the Democrats take over in January. Since Nextpower is now not only a target for solar investment but also involves the battery storage industry, its diversification of business is a significant plus.

Expansion mode

Despite the Trump administration's ongoing suppression of renewable energy, particularly offshore wind power, solar energy remains the fastest-growing source of electricity in the United States. "It is the dominant form among new installations," says Shugar.

Even Texas, a major oil-producing state, has now caught up with California in terms of solar power installation capacity at the utility level in the United States, with both states having over 15 gigawatts of solar power installed. One gigawatt is roughly sufficient to power 750,000 households at full capacity.

There is also a reason why about 80% of new solar projects in the United States are equipped with battery energy storage systems. With the help of batteries, solar power can come closer to providing base load electricity throughout the day and night, as the battery systems can release the stored electricity when the sun is no longer shining at night.

In July this year, Nextpower acquired the battery energy storage business of Prevalon Energy for up to $365 million, and at the same time, it also purchased the Spanish power inverter business Zigor and its American subsidiary Apex Power for $80.5 million.

Shugar believes that as hyperscale cloud service providers build data centers that consume a large amount of electricity, the battery business will particularly make Nextpower more attractive to AI and the robotics industry.

In October, Nextpower completed a transaction to acquire German Zimmermann PV - Steel Group for $378 million, in order to further expand its solar energy business in Europe.

In addition, last year the company also acquired Bentek for $78 million to expand its solar electrical components and hardware business; Nextpower also acquired Origami Solar and its solar panel frame business, with the transaction amount being $53 million.

In addition, in the early stages of the pandemic, Nextpower began to push for the return of equipment manufacturing to the United States, establishing new factories or acquiring existing ones within the country. Shugar stated that over the past five years, the company has completed 13 acquisitions. Since a large portion of the manufacturing process takes place domestically in the U.S. and is distributed across various regions, the impact of last year's tariff increases and this year's surge in diesel prices on Nextpower has been relatively limited, he said.

Advances in the solar tracker industry have also made solar energy more efficient in areas with limited land and harsh terrain, thereby expanding the potential geographical scope for this business. Improving solar energy production efficiency has made solar energy economically viable in areas beyond just flat wastelands.

In the long run, the biggest setback may be the tax credits for solar and wind energy projects that were canceled by the Trump administration last year. However, what is favorable for Nextpower is that most of the solar projects currently under construction can be completed before 2030 while still retaining the tax incentives.

“Since we went public four years ago, our project backlog has tripled,” said Shugar, “At that time, our backlog of orders was 2 billion dollars. Now it has exceeded 6 billion dollars.”

Currently, the U.S. Congress is also reviewing legislation for infrastructure licensing reform, which theoretically should facilitate the approval and construction of transmission lines and solar power plant projects.

The question is what will happen in the next decade. Although solar energy has become an increasingly cost-effective source of power, energy research company Enverus indicates that new solar contracts still need to grow by about 49% to offset the impact of the cancellation of tax credits. Of course, a new presidential administration starting in 2029 could also work with Congress to restore renewable energy tax credits.

Shugar pointed out that nuclear power and fossil fuel power plants still receive federal subsidies in other forms. He said that either these subsidies should be eliminated or tax incentives for renewable energy should be reinstated. The Biden and Obama administrations were criticized for supporting clean energy and suppressing fossil fuels, while during Trump's tenure, the situation reversed.

"If more electricity becomes a necessity at the national level, then all projects should be encouraged to proceed," said Shugar, "but we don't want to see the government picking winners and losers."