Nextcracker has predicted that its earnings would increase during fiscal 2024 to quite a bit of $2.43 billion to $2.forty eight billion
Dan Shugar, the founder and CEO of Nextracker, a US-based solar tracker manufacturing firm, predicted that given the “unprecedented period of demand growth” for new electricity generation, solar power is expected to quadruple every two to three years. After the company’s latest report, he also mentioned in an interview that “Solar was unstoppable.” Systems to track the direction of the sun are made by Nextracker for solar panels.
“Utility scale offers exceptional intrinsic economics both domestically and internationally. Never before has it been so advantageous,” Shugar remarked.
Nextracker Outperforms Despite Industry Doldrums
After the firm significantly surpassed Wall Street‘s earnings estimates, increased its guidance, and revealed a record order backlog, Nextracker’s shares finished Thursday at $56.50, up over 25% from the previous trading day.
Nextracker is outperforming the solar business by a considerable margin, while the latter is struggling to come out of its current slump. This year, the company’s stock has increased by almost 24%, whereas the Invesco Solar ETF has decreased by nearly 21%.
Due to high hobby rates that have negatively impacted household finances, demand for residential solar has declined, leaving installers with an excess of significant inventory.
However, as demand increases among huge utility-scale clients, Nextracker services continue to rise. The company’s fiscal third-quarter revenue has increased 38% year over year to $710 million. As of December 31, 2023, the company’s order backlog had “significantly exceeded” $3 billion, having increased from $2.6 billion at the conclusion of its fiscal year in March 2023.
According to Shugar, the need for electrical energy is rising due to the use of data centres, the electrification of household appliances and transportation, as well as reindustrialisation in the US. To meet the need, he said, around 300 gigawatts of new energy vegetation are needed over the next five years and 500 gigawatts over the next ten.
Shugar also stated that compared to established energy sources, solar energy is more affordable and quicker to produce. It also provides protection against fluctuations in gas prices.
Based on the reports from the financial management firm Lazard, the utility-scale solar costs are said to be between $24 to $96 per megawatt hour without any subsidies. Nearly 56 % will be priced moderately compared to gas and nuclear peaking. And the remaining 42% will be priced more moderately than coal.
Nextcracker has predicted that its earnings would increase during fiscal 2024 to quite a bit of $2.43 billion to $2.forty eight billion. Previously, it was between $2.43 billion and $2.48 billion. It has also increased its net earnings guidance from $374 million to $429 million in 2024. Previously, it was between $237 million and $266 million. Under the Inflation Reduction Act, this also included the $50 million to $80 million in benefits from the tax credits.
Challenges or Possibilities?
Despite the rising demand, the solar power sector is facing challenges due to the current geopolitical conflicts and upcoming presidential elections in the US. One of the main concerns is the future of the Inflation Reduction Act (IRA). This has offered tax breaks to solar companies.
However, the CEO of Nextracker believes the tax provisions of the IRA will likely remain in place regardless of the outcome of the election. He also acknowledged that there were logistics disruptions caused by the recent events. But he expects that his company will manage all of this. He expected the solar industry to remain resilient despite the current headwinds.