Massive Power Demand Boosting Solar in US, Nextracker CEO Says

(Bloomberg) -- Insatiable demand for electricity in the US will overpower headwinds facing the solar industry, leading to an unprecedented buildout of panels, according to Nextracker Inc. Chief Executive Officer Dan Shugar.

Utilities are desperate to line up new supplies to meet the needs of power-hungry data centers,  plug-in cars and electric heating and cooling systems, said Shugar in an interview at Bloomberg's bureau in San Francisco. At the same time, legacy fossil fuel and nuclear power plants are retiring and solar is one of the cheapest and fastest options available -- so there will be a lot more built, he said. After more than a decade of relatively unchanged annual electricity demand, utilities now are expecting the biggest rise in electricity use in a generation. Consumption at US data centers alone is poised to triple from 2022 levels to as much as 390 terawatt hours by the end of the decade, according to Boston Consulting Group. That’s equal to about 7.5% of the nation’s projected electricity demand.

“Utilities need to keep the lights on and they need power,” said Shugar, whose company provides sun-tracking equipment and software that serve as the skeletal and nervous systems of solar plants. For the solar industry, “it’s kind of showtime,” he added. 

Solar is the fastest growing US energy source and is forecast to expand by 26% annually compounded through 2028, according to US government data cited by Nextracker.  That will come despite delays in permitting and connecting solar farms, and higher capital costs from increased interest rates, Shugar said. A big driver of the growth is the sheer number of solar projects in the works that can now be penciled in due to the plunge in panel costs, he said.Helped by tax incentives built into President Joe Biden’s Inflation Reduction Act, Nextracker has announced over 25 gigawatts of annual manufacturing capacity in the US.  

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