Solar trackers are worth $10bn pa. They typically raise solar revenues by 30%, earn 13% IRRs on their capex costs, and lower LCOEs by 0.4 c/kWh. But these numbers are likely to double, as solar gains share, grids grow more volatile, and AI unlocks further optimizations? This 14-page report explores the theme and who benefits?
A solar module is a 2.7 m2 rectangle, whose internal semiconductors convert incoming electromagnetic radiation into a direct current via the photovoltaic effect. To maximize energy production, ideally, the entire 2.7 m2 rectangle will be pointed directly at the sun and receive full sunlight. But this is challenging as the sun arcs across the sky, tracing a different path every day of the year, and varying with latitude, as shown on page 2.
Solar trackers orient solar modules towards the sun. The market size, key parameters of different systems, and “how solar trackers work” are succinctly explained on pages 3-4.
The energy uplifts from solar trackers have been estimated at 10-50% in different studies. But we can do better than this broad range, and actually calculate both the energy uplift and the revenue uplift from first principles, on pages 5-8.
The economics of solar trackers can therefore be modeled more effectively. Our base case yields 13% IRRs and deflates solar LCOEs by 0.4 c/kWh. We can also model how steepening duck curves, battery co-deployments, and AI optimizations will further improve the case for solar trackers, on pages 9-10.
The solar tracker industry is worth $10bn pa, relatively concentrated, and relatively unusual for a solar supply chain in that it is still dominated by US companies. We discuss key conclusions from our screen of solar tracker companies on pages 11-13.
A key mega-theme that has permeated our 2024 research has been the rise of AI, and the benefits of greater digitization and optimization. It is interesting to end by noting that solar trackers, once again, fit this trend, and amplify demand for sensor equipment.