Array Technologies, a New Mexico-based maker of solar tracking systems, launched onto the Nasdaq Global Market on Thursday, capping one of the biggest U.S. renewable energy IPOs of recent years.
In listing its shares publicly, Array is riding two trends: growing demand for equipment that allows solar projects to squeeze out more power and strong demand for clean energy stocks ahead of November’s presidential election.
Even with an upsized IPO pricing shares at $22, Array surged after hitting the market under ticker symbol ARRY. The shares soared more than 65 percent by Thursday afternoon, to above $36, giving the company a market capitalization of more than $4.6 billion.
Array itself sold 7 million shares of common stock in the IPO, raising $154 million — more than previously expected. Oaktree Capital, the investment manager that bought a majority stake in 2016, sold another 40.5 million shares.
Utility-scale solar is now at cost parity with new natural-gas generation in places, CEO Jim Fusaro said in an interview Thursday. “As we continue to scale and grow with the overall market, we’re at a point now where having access to capital will...allow us to invest in our technologies [and] pay down debt.”
The money raised in the IPO is “a permanent source of capital, which will allow us to enable the growth and the value that we bring to our customers. And in many ways, it serves as an attraction to talent,” Fusaro said.
Knocking soft costs out of solar projects
Array is no newcomer to the solar industry: The company was founded in 1989 by Ron Corio, a pioneer of solar trackers. Oaktree and Corio will continue to own more than half of the company’s voting power.
Today, Array is the world’s second-largest supplier of solar tracking systems, a growing market expected to be worth around $3 billion in 2020, according to Wood Mackenzie.
Array controlled a 17 percent share of the global market last year, trailing only market leader Nextracker’s 30 percent share, said Molly Cox, a solar analyst at Wood Mackenzie Power & Renewables.
Array’s main product is its DuraTrack system, which rotates PV panels across a single north-south axis throughout the day to follow the sun. Trackers add upfront costs to a solar project but allow panels to generate more energy compared to a “fixed-tilt” mounting system. Over the course of a project’s lifetime, that results in a substantially lower levelized cost of energy.
Other leading tracker manufacturers include Spain-based Soltec and China’s Arctech Solar.
As hardware costs continue to fall across the solar industry, greater attention is being placed on soft costs such as customer acquisition and labor, said Cox.
Earlier this year, Array announced a new clamp technology — developed in collaboration with First Solar — that it says greatly reduces the time it takes to fasten a solar panel onto its trackers. Array is also investing in machine learning for its trackers.
Innovations like those are “the wave of the future,” Cox said. “It will be interesting to see how tracker vendors continue to evolve their products to further help installers.”
Array counts renewable energy construction firms, like Blattner Energy, and developers, like EDF Renewables and Lightsource BP, among its major customers.
International market for solar trackers grows up
International markets represent an increasingly important opportunity for tracker suppliers. Roughly 70 percent of new utility-scale solar projects in the U.S. now come with a tracker, compared to just 30 percent of projects around the world.
Solar markets in developing economies like India remain more focused on the initial upfront cost of projects, with less focus on the levelized cost of energy, Cox said. But that is changing.
In 2020, the value of the market for solar tracking systems will surpass sales of fixed-tilt systems for the first time, Wood Mackenzie says. The overall value of the global tracker market will grow 45 percent over the next five years, even as system costs come down.
Array’s IPO is not only big news for the American solar industry — which has seen few floatations in recent years — but also for the state of New Mexico. According to the Albuquerque Journal, Array is the biggest IPO for a homegrown company in the state’s history. As of Thursday, its market capitalization exceeds that of PNM Resources, the utility group based in Albuquerque.
“I’d like to say we’re considered a staple corporation [in New Mexico],” said Fusaro.
Get a deep dive into the global solar tracker market, including vendor market shares, in Wood Mackenzie's new report, The Global Solar PV Tracker Landscape 2020.