The solar industry is in for an atypical "negative growth" year in 2017 -- but some sub-sectors within the solar value chain will still experience healthy expansion. The solar tracker market is one of those growth sectors.

Trackers can improve solar output by 20 percent in Las Vegas and 30 percent in Chile, at a price approaching a single-digit premium to fixed tilt. Trackers can also provide a better match to utility load.

In a recent report, The Global PV Tracker Landscape 2016, GTM Research forecasts 12.6 gigawatts of PV trackers to be installed around the world this year, up from 5 gigawatts in 2015. That's a remarkable 250 percent jump. By 2021, tracker installations will grow to 37.7 gigawatts and account for nearly half of all ground-mount solar systems.

Scott Moskowitz, solar analyst at GTM Research and the author of the report, noted, “Over 70 percent of U.S. ground-mount projects are now being installed with trackers.” While tracking was not always easy to justify five years ago, Moskowitz spoke of the "overwhelming economics" of tracking today that have made it the obvious choice in large-scale solar. The market will top $4.9 billion in 2021, up from just under $1.0 billion in 2015.

"Global tracker market growth will be temporarily subdued in 2017 [with growth at 19 percent], compared to 83 percent annual growth from 2013 to 2016 and 21 percent annually from 2017 to 2021," said Moskowitz. That's a "subdued" 19 percent in an off-year for the industry.

The report finds, "Though the United States will remain the leading market for trackers through 2021, China and India will experience the most significant growth, given that trackers make up only 6 percent and 7 percent, respectively, of ground-mount installations in those countries in 2016." Gaining access to those markets will require competitive pricing while working with a local partner or making use of a licensing model, according to the analyst.

PV tracker pricing will "continue falling 5 percent to 7 percent per year through 2021. The majority of price reductions will come from iterations on trackers that eliminate parts, minimize electrical components and trenching, and lower structural requirements."

FIGURE: Global PV Tracker Installation Forecasts by Region, 2015-2021E (MWdc)



Source: GTM Research report The Global PV Tracker Landscape 2016

As we've covered, the PV system price drops over the last six months in the U.S. utility market have been steep -- 17.4 percent for fixed-tilt and 14.9 percent for single-axis tracking, according to GTM Research.

A concentrated, complex vendor landscape

The tracker market is still developing, but the current market landscape is highly concentrated -- both competitively and geographically. The top four vendors (NEXTracker, Array Technologies, First Solar and SunPower) together accounted for 72 percent of global shipments in 2015, of which 76 percent landed in the United States.

Array Technologies and NEXTracker are the market-share elephants in the tracker field, with First Solar and SunPower's "captive" business close behind. After that, things quickly become more fragmented with vendors grabbing small shares along with new suppliers such as GameChange, SunLink, Optimum Tracker and Solar FlexRack fighting for customers.

Tracking technology varies significantly among the single-axis tracker vendors. Bob Bellemare, CFO at Array Technologies, has pointed out the varying design and engineering philosophies, saying, "The most we have in common is we track east to west."

Array Technologies uses a centralized approach. NEXTracker uses a distributed architecture, as do several other firms. SunLink believes a centralized tracker architecture is the right solution for the preponderance of projects in the U.S., while a site with extreme terrain variation would call for a distributed architecture.

Dan Shugar, CEO of NEXTracker, has said the most significant edge his firm has is this: "We [need] less steel, and at the end of the day, we win on less steel." According to GTM Research, raw steel has risen from around 50 percent of a tracker’s price in 2012 to around 70 percent in 2016.

Moskowitz sees the battle for dominance between NEXTracker and Array Technologies as emblematic of an interesting market dynamic, akin to the rivalry between SolarEdge's optimizers and Enphase's microinverters in the module-level electronics market.

As GTM Research analyst Ben Gallagher has said, "Solar hardware firms will not only need to compete on price, but they'll also have to provide an additional value to the EPC -- to reduce installation time or help reduce soft costs." He added, "Not everyone will succeed at that, but the smarter firms will survive."

While the solar industry as a whole might look to be in stasis or retreat as it braces for 2017, beneath the surface, where the GTM Research analysts lurk -- there are still crucial shifts underway in market share, technologies, allegiances and balance sheets.

Source: GTM Research report The Global PV Tracker Landscape 2016

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