May 2018

Landscape for the Australian solar tracker market

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The market for solar trackers in Australia has positively exploded in 2018. At the end of 2016, Australia was host to only 117 MW DC of operating capacity that used trackers. At the time of writing, we estimate that confirmed contracts for trackers plus operating assets with trackers amounts to 2.8 GW DC.

What makes solar trackers so attractive? Solar trackers are mechanical devices that allow the panels to track the path of the sun during the day. This increases the amount of electricity that can be produced from a given capacity of panels. Depending on the design of the solar farm, this can dramatically increase the capacity factor and potentially the project economics for solar developments.

As the Australian solar project pipeline has expanded, so has the planned use of tracking. We cover 33 GW DC of utility-scale solar projects, and of the projects which have a confirmed design, 83% will use single-axis tracking.

Who are the major players? The market for solar trackers in Australia is currently highly concentrated; only seven manufacturers have publicly won projects and almost 90% of confirmed orders are accounted for by the top two companies.

Based on operating assets, projects under construction and confirmed orders for projects under development,the top-ranking manufacturer is US-based NEXTracker. It was the first to be involved with Australia’s large-scale solar sector during the development wave in 2015 and 2016. It has steadily built a large order book from there with 1.4 GW DC currently confirmed. This provides NEXTracker with almost 50% of the confirmed market.

The second-largest tracker manufacturer in the local market is Array Technologies, also US based. Array won its first bids with projects that participated in the ARENA large-scale funding round in late 2016 and has grown its market share rapidly since then. With 1.1 GW DC publicly under contract, Array is the only company that has been able to make inroads into NEXTracker’s dominance of the market. It currently holds 38% of the sector.

But several global players are present in the Australian market, and while their portfolios are currently small compared to the market leaders, they are pursuing growth. NCLAVE, PV Hardware, Soltec, Exosun and Sunpower have all supplied operating assets or have confirmed projects under construction or close to it.

A key to success for tracker manufacturers is building partnerships with engineering, procurement and construction (EPC) companies active in the local solar sector. So far EPC companies have shown a high degree of allegiance to their chosen tracking manufacturer. Of the 13 EPC companies which have won projects in Australia involving single-axis tracking, only three have used multiple tracker brands across their various jobs.

The remaining 10 EPC firms have channelled their business to a single tracker manufacturer. While there is little to suggest these links will remain constant, it appears clear that the smaller tracker players will need to be not only cost competitive but will also need to overcome strong existing relationships in order to grow their market share.

How big is the future prize for tracking manufacturers? We estimate there is 3.5 GW DC of projects which are designed as single-axis tracking systems, have development approval (DA) but are yet to secure a tracker supplier. And the upside potential does not end there. Beyond the stock of DA-approved, tracking projects, there are 10 GW DC of projects which are yet to confirm a racking design. Given the current preference for tracking projects, there may be 14 GW DC for tracker manufacturers to go after in Australia.