Array Technologies Shares Surge After First Big US Solar IPO of 2020

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 60 percent by Thursday afternoon, to nearly $36,
giving the company a market capitalization of more than
$4.5 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 not only
allow us to invest in our technologies but pay down debt.â€

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, and was
majority acquired by Oaktree in 2016. 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, 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 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 like 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.â€

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.

Source: FS – GreenTech Media
Array Technologies Shares Surge After First Big US Solar IPO
of 2020