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Dan Shugar is just getting started

Dan Shugar is just getting started

Dan Shugar appears on Episode 41 of the Factor This! podcast fresh off Nextracker's $638 million IPO. Subscribe wherever you get your podcasts.

Nearly three decades ago, Dan Shugar looked in amazement at the sprawling wind turbines peppering the Diablo Range in Northern California.

The Altamont Pass wind farm was at the time the world's largest operating wind farm at 576 MW. The project, built in response to the energy crisis of the 1970s, accounted for more than half of global wind generating capacity.

"You looked across the landscape as far as you could see in every direction turbines were up there. It was a windy day, it was just cranking," Shugar recalled.

Shugar was in his mid-twenties working as an engineer in the solar group at Pacific Gas & Electric. Solar was in its infancy with less than 10 MW of grid-connected capacity in the U.S.

He thought about what it would feel like to accomplish something like the Altamont Pass wind farm in his career. Back then, circa 1988, a 500 MW solar farm seemed like an unimaginable scale.

That wouldn't be the last time Shugar underestimated the solar industry's, or his own, growth. He does it all the time, despite the successes he has witnessed and actively supported.

After leaving PG&E, Shugar led PowerLight to a $335 million acquisition by SunPower. He was the CEO of module manufacturer Solaria before spinning off the company's tracker technology to create Nextracker, which just completed an initial public offering on the Nasdaq that valued the company at $638 million.

CEO Dan Shugar and the Nextracker team celebrate the company's listing on the Nasdaq stock exchange. (Courtesy: Nextracker)

Today, Nextracker has deployed more than 70 GW of its trackers around the world and is regarded as a market leader in the space. Shugar has completed his own Altamont Pass many times over, arguably the face, and voice, pushing the industry to heights unthinkable when he started out 30 years ago.

What's next for the industry leader affectionately known by so many as Shug?

He joined the Factor This! podcast from Renewable Energy World to share insights from Nextracker's IPO and his vision for the solar industry.

Nextracker goes public

The Nextracker team celebrates the company's listing on the Nasdaq with a photo in Times Square. (Courtesy: Nextracker)

Nextracker leadership had been mulling the step into public markets for several years.

Flextronics International acquired Nextracker for $330 million in 2015. The merger made sense for a number of reasons, chief among them Flex's international distribution footprint, which allowed Nextracker to quickly scale.

The idea for an IPO came from a desire to provide value to Flex shareholders and help Nextracker recruit engineering talent in its home market of San Francisco, where equity is often a prerequisite to luring top candidates.

Then, last year, Nextracker secured a $500 million investment from the TPG Rise Climate Fund valuing the company at $3 billion.

The stage was set for an IPO, and Nextracker believed it had a special story to tell about clean energy. The company set out on its investor roadshow to sell $500 million of stock. It was met instead with $13 billion of orders from 90 investors.

Nextracker's value goes beyond their trackers, too. The company's software platform, TrueCapture, helps to optimize utility-scale solar farms and presents a lucrative revenue vertical.

"It was a bit like running downhill for me," Shugar said of the experience. "I was working off the great success of our team that had built a really enduring company."

It's back to the basics at Nextracker, Shugar said. He tells employees to resist looking at the daily stock price.

"It's not a report card," Shugar said of the stock price. "What you focus on are customers, on-time delivery, high customer satisfaction, innovation, and technology that delivers."

Performance matters

For all Dan Shugar has accomplished in his career, now may be his true test of performance.

Whether or not companies like Nextracker succeed in the public markets will shape public and investor sentiment toward the renewable energy industry, he believes.

Projects and the people who build them must perform, no matter what conditions are thrown at them.

"I don't care about market share. I really don't," Shugar said." What I care about is that each engagement is successful."

Shugar, and Nextracker, made commitments to customers and investors alike with its IPO. And he said he knows that concessions won't be made for factors outside of the company's control, like a pandemic or supply chain constraints.

"We need to be able to perform no matter what the world throws at us," he said. "And we need to have discipline about how we operate the companies to be able to reliably perform for investors because that will help attract the additional capital our industry needs to keep powering forward."

Nextracker has attempted to insulate itself from those challenges by rapidly scaling its domestic manufacturing capacity to meet project developers where they are.

When Shugar first appeared on the Factor This! podcast, before incentives from the Inflation Reduction Act were unveiled, Nextracker had 10 GW of U.S. manufacturing in place. Today, it has 25 GW.

Telling a story

Courtesy: Nextracker

Nextracker's IPO was the culmination of what was a purposeful storytelling campaign. In the year leading up to the listing, Nextracker methodically timed new domestic manufacturing announcements, not once or twice, but three times with the opening of new U.S. factories.

Shugar now urges all renewable energy leaders to do the same: Open new factories, showcase new jobs, and tell the story of renewable energy that extends beyond climate change.

"I don't even bring up global warming," Shugar said. "We are winning on economics. We're winning on energy security. We're winning on jobs."

He said he feels a sense of urgency to make sure the public hears that message. He just as strongly believes the industry plays an important role in delivering on those talking points.

"We should have tremendous confidence," Shugar said, "that we are a leading part of the solution."