Hey, it's Jigger Shaw. Welcome to Energy Empire.
This is the third and final special episode from the UNC
Clean Tech Summit produced in partnership with Suncast.
Today, I'm talking with Dan Sugar.
Dan Co founded Power Light back in 1996 and sold it to Sun Power
for $332 million. Then he founded Next Tracker,
now branded Next Power, which is shipped more than 90 gigawatts
of solar trackers globally. He has been at the center of
every major wave of the solar industry for nearly 30 years.
Dan Sugar also is an avid player of the guitar and has his own
band, which plays regularly at many solar events.
Here's our amazing conversation. I'm Nico Johnson, your host at
Suncast. But today we're doing a special
collaboration episode for Energy Empire Jiggers new podcast with
our friend Jamie Nolan. Dan is the protagonist of the
conversation today. And Dan, I wanted to start,
first of all, welcoming you back to North Carolina.
Thank you for all the many ways you've contributed to the growth
of clean energy in my home state, but in our industry.
And I wonder as the from the place where you sit as one of
the most well known and important infrastructure
companies building the current energy sector, what's holding us
back right now? OK.
Well, thanks, Nico, and really appreciate what you've done with
Suncast the leadership and congratulations Jigger for your
new podcast Energy Empire. Really looking forward to this
conversation. It's great to be here in North
Carolina at the UNC Cleantech event, which is a fantastic
event. What's holding us back?
Well, I would argue we're, we are up and to the right as an
industry and how are going very, very strong despite a lot of
noise to the contrary. If you look for example in the
United States last year, 83% of the new power generation
capacity was solar and storage. It is working us as a company as
a yardstick About 3 years ago and one month ago, we went
public and at that moment, our backlog at Next Power was 2.1
billion. Today it's well over 5 billion.
So I would say we're not being held back in terms of like
getting because in part we've won on economics where solar is
the lowest cost way to generate power pretty much everywhere on
Earth. And now that we have storage
that's very affordable and at four to six hours now as
storage, it can work pretty much everywhere as firm power terms
of getting to the next level. Where do we go from here?
How do we? I think we're really limited
mostly by our imagination and our talent.
And so we're trying to bring the best and the brightest into our
industries and really evangelize our message.
We need to transition our thinking from being alternative
energy to we are the mainstream energy.
We need to start acting that way, investing more in public
education, public policy, getting evangelizing our message
out there, not only at home but abroad.
We're in 45 countries around the world.
So I would say we're doing great, we can do better and we
are part of the solution for affordable, reliable energy and
play nicely with other power generation technologies.
Now in terms of getting the best and the brightest to join our
industry, I mean, you and I were best and the brightest at some
point in our career and I started at Astropower in 1995.
You started at PG&E and have been working on solar since
1980s. You know, how do you get the
best and the brightest to choose our sector?
And like, what was your journey? How did you decide that this was
going to be your path? Right, I'll answer that.
But again, I'm going to do a quick a quick tangent, which is
there was a golden moment Jigger, you founded Sun Edison.
We were at power light at that point.
What we were both focused on was the right thing, which was drive
down the levelized cost of energy, which then allows
project owners to have the highest unlevered project rate
to return, right. And so I think keeping true to
that and you carried that thought through all the way
through the awesome investments you were making in your tenure
at the Department of Energy. And thanks again for your
incredible service there. So for me, I think staying true
to a vision which is solar, renewables works for all and
we're going to deliver no compromise, high reliability
energy that wins it all the above merits, those are the
things that attract the best and the brightest.
So we've been able to I think deliver on that last year.
Next power, Sorry, this sounds a little promotional, but I think
it's helpful in answering your message.
We were the top performing renewable stock, but also beyond
renewables in all mid market cap companies, we're in the top ten,
right? And so folks are like, wow, this
is not just good for the planet, but this is a really smart
business and that's driven by satisfying customer needs, which
are people need power that's reliable, that's available.
And so we've been able to now in order to deliver a fulsome
solution, we've brought in, for example, robotics where we have
inspection robotics that are doing vision, predictive
analytics, digital all in IT. So to support that business, we
brought in a bunch of, you know, fantastic machine learning teams
and and things like that. So if you look at the scope to
deliver take our products and services to the next level, we
need the best and the brightest and our team is the most
important thing in order to innovate, execute and deliver
those kinds of products and services for our customers.
So I think we need to stay true to our vision, our mission
mission, articulate that, but deliver exemplary operational
performance where folks see this as a real industry.
That's a first order thing. Does that make sense?
It does, but I still think you dodged.
I want to know all of the like uncles who told you that you
were wasting your life by going into solar power or working for
the electric utility. There have been a lot of
naysayers along the way. Right.
But those naysayers are also telling the best and brightest
not to join like your firm, right?
I mean, the real question is like, what did you say to
convince them that like, you were still invited to
Thanksgiving dinner? That's funny.
I did this whole video series called Dinner with Dan.
Yeah, because I'd had this, I was at a wedding and some guy
was like renewable power and he, it was like, although, well,
that's not reliable. The panels are all made in China
and you know, why don't we do nuclear and and those types of
objections. But I think what we need to do
is really have, it's about communications.
That's the number one place we as an industry have
underperformed very consistently.
And so I've, we've leaned in not just at Next Power, but in our
industry associations. I serve on the American Clean
Power Board. You know, we've taken the comms
budget up from a few 100,000 to I believe north of $10 million a
year to really evangelize those messages.
One of the things we did was this manufacture clean energy
manufacturing jobs tours that we've done.
We've done 9 public factory openings and there it's very
popular and it really helps transcend the unfortunate
politicalization that's happened with some of these energy tax.
Everyone loves the fact that, you know, we took a former
Bethlehem Steel facility in Pittsburgh and converted that
into a modern manufacturing facility that's shipping
hundreds of trucks a week of finished goods and rinse,
repeat. We're doing that with
electronics in California where we've got a bunch of, we're
making advanced frames for solar panel using US steel in the
United States. So I think for me, the
manufacturing story has been really important to cut through,
evangelize the message, make it a message that everyone signs up
for, but also really hitting now the affordability that we're
delivering the lowest cost power.
So it's a ground game. We need to again grow up as an
industry. While not alternative, we're
mainstream. Let's start investing.
Dominant 3% feels like a dominant position last year.
That's a great word. I, I, you know, but we, I think
earn what we are basically have created, which is basically
through a lot of hard work, this tech works, the project returns
are happening. We're supporting, you know,
hundreds of projects across United States and the world.
And so I think by really being very factual and concrete about
that, the that's what's attracting talent and and
supporting our industry. One of the things then that I've
been most impressed by watching the last 20 years of your growth
from Power light through to next Power is the continuity of the
team. I think that it's interesting in
an industry that's as fast growing as ours has been it it's
I don't think it's so common to see that level of fidelity to
the same or to a core team. I mean there's like 8 Co
founders I think to next power, maybe 9.
How does that unified experience not only accelerate growth and
value for shareholders, but serve as a beacon for folks that
are looking at the industry? Like how do you think about that
internally as a management team? Yeah.
Thanks for saying it. I mean, it sounds like, you
know, apple pie, but the culture really is the most important
thing, Drucker said. Culture eats strategy for
breakfast everyday and people can read through, they can
really see that. So what do I mean by that?
Like what are some of the things of culture?
So one of the things we say at almost every all hands meeting
is we encourage people to like do the right thing for the
customer, do the right thing for your business, take risk.
If you make a mistake, that's OK, the company has your back.
We can make a mid course correction.
Yeah, but what we don't want it. What's unacceptable is analysis
paralysis, being afraid to make decisions.
And what we do is when we bring people in company, we don't give
them a rule book, you know, as thick as an encyclopedia and say
here's all the stuff you have to follow company.
We brought it down to one thing. We say please make every
decision at the company like it's your own money, your own
company. 99% of the time, that'll be the right thing to
do. So having those types of that
type of culture, also a strategy that people can articulate.
If you walk into 8090% of the companies around the world and
you ask somebody to walk down the hall, what's company
strategy? Most time people will say, I
don't know, I'll tell you what, but if you walk into an X power,
you ask someone what's company strategy?
They'll say it's iced tea. Well, what does iced tea stand
for? It stands for innovation,
customers execution and team innovation that delivers value
that customers understand, credible customer focus to make
sure whatever their needs are met, relentless folks on
execution with everyone we touch and building the best team.
And so being able to have a clear strategy that's
transparently articulated a culture that allows people room
to grow in their career. You know an example, our chief
operating officer at Next Power started three companies ago as a
clerk in the project construction department.
A few years later when it became time in 2004 to build the
world's first ten MW system, which was in Germany, we looked
around and said who's the most qualified person and was Marco
Miller. So he did that and he has a
senior project manager and he's elevated.
So if people work hard, they're diligent, and they deliver the
results you need to provide upward mobility within the
company. In an industry that has had so
many up and down cycles, it's often difficult to provide the
kind of upward mobility and growth that that that talent
desires. And so they end up eventually
moving away to others. Like I think one of the things
that we've struggled with as an industry is being able to gather
enough capital around the idea and enough commercial success,
which you're fantastic at, to be able to create something that
feels like it's a balloon lifting everyone off the ground.
How do we address that in at the time?
Like it seems like right now there are some headwinds, but we
have a lot of tailwinds as an industry.
So how do we address the capital requirements to make sure folks
have a job in 2-3 years? Well, I think this goes back to
what Dan was saying before. I think that part of this is a
narrative challenge. When you look at the employment
in the solar industry since the tariffs that was put on by
President Obama in 2012 and then 2015 and all the other things
has been up and to the right. We've consistently hired more
people every single year to meet the needs of millions of homes
that decide to go solar. Hundreds of thousands of
commercial and industrial facilities have to go solar,
utility scale solar. Now we're adding batteries to
all of those projects. People are busy.
People are really, really busy. I'd look I there are going to be
companies who fail to execute and they're going to go out of
business. And those folks, unfortunately,
are going to lose their jobs, but they are absorbed by the
rest of the companies who make good decisions and, you know,
still need that talent to go to the next level.
I think our biggest challenge right now really is a narrative
challenge. Like we are in a situation where
we are in the middle of one of the largest energy crises we've
had since the 1973 oil embargo. In 1973, we didn't have the
solutions that we have today to be able to get through this
energy crisis. Today, we not only have the
solution, we have billion dollar companies that are providing
those solutions at scale. And we can meet this moment,
right? And so that means that the
narrative has to change. People have to understand that.
Like putting in a backup diesel generator, right, is a cost
center. Putting in a backup battery can
become a profit Center for you and your family while protecting
your family. These are narrative challenges
and it leads to us not growing as fast as we absolutely could,
even though, as Dan suggests, we are still going up and to the
right. So, Dan, let's go back to COVID,
right? In COVID, you had a presidential
election. The president that came in at
the time was all about onshoring and reshoring, right, which
President Trump had been, you know, and starting in 2016.
And I think the solar industry was slow, frankly, to get in
that message. I think they sort of took until
2024-2025 before they were like, oh, I guess people are serious.
We're going to have to onshore and reshore.
You were never slow. Like you went out this, you
know, like head on right in the middle of COVID figuring out
exactly how you're going to onshore and reshore this
capacity. What exactly is it that like
triggered in your mind early to understand that this was a
lasting trend, one that you had to take seriously, one that you
had to attack? Yeah, I appreciate that.
Sometimes there are those moments you don't have perfect
information, but you need to do sort of pattern recognition and
make a decision and go forward. And so for me, at the very early
part of COVID, there was a global meltdown in the logistics
industry. And so prior to that, you could
move a container pretty much from point A to point B anywhere
in the world from any port for about $2500 to $3000.
We saw logistics triple in 1/4 and 1/2.
Warren Buffett came out and said all My Portfolio companies were
caught completely off guard by that.
And we also saw a steel double in that period.
What for our company at the time, we were largely protected
on the steel side through our business practices.
But the the logistics was a huge hit.
We absorbed over $100 million a cost honoring every single
contract we had with customers. We absorbed those costs over 2
years. But I just I took a step back
and I said time out at this phase of my career, there's no
way on a go forward we're going to be subjected to those kinds
of uncertainties for delivering materially reliably to a
schedule to a customer site based on a COVID mandated shut
down in a faraway port or congestion at the Port of Long
Beach or strikes or or all the other things that were
happening. So we just made a decision based
on fundamentals of delivering material reliably to customers
onshore. In creating this narrative
around not just the narrative, but the the concrete facts on
the ground, we stood up like over 35 factories across the
United States. And so and it matters, right,
people notice that you've done that and I think it's actually
LED you to get more market share and you know, and more
enthusiasm for your customers. Like I appreciate some of those
sort of like. I will, but let me finish.
So back on like that decision. I'm a I'm a student of.
I don't want to like agonize about the, but I try to learn
from what was our decision process at the time.
And it was really driven by satisfying customer need.
And So what everybody else was looking at or many people were
looking at, they're like, hey, wait till we get through Chinese
New Year's. The things will decongest and or
wait till this happens or wait till that happens.
We're going to, I'm like, no, we're moving forward on a
massive build out. And I thought at the moment I'm
like, we're going to build out 10 gigs of capacity.
So we started doing that. I thought that was a lot.
And then I was like, took it frankly was harder to do in the
US than we thought it could. It was going to be.
So we said, OK, we're going to 25.
Then we said we're going bigger than that.
And so we made, we pulled that trigger.
That ended up being a defining moment in the history of the
company. It was the right thing to do.
And so, so then it engendered we were able to radically simplify
the whole logistics part of our business and give customers, oh,
buildable megawatts by block in a predetermined sequence where
they had visibility on the all the materials and hit
unbelievably high on time delivery where when we do QB Rs
with EP CS, we ask, have we slowed you?
You down on any project over the last few years, have you been
waiting with people in the field for any material they look
around and the answer's no. We we've been delivering it
engendered a lot of and we're able to reduce lead times.
A side benefit we hadn't really even thought of was the how much
cleaner the US steel is, right? And so this electric arc furnace
steel uses a fraction of the energy that a blast furnace does
as a fraction of the carbon content.
So we're able to use, you know, really do that and build
incredible relationships with three of the top mills in the
country with new core steel dynamics and US steel.
So I think it we did the right thing.
It was really predicated on satisfying customer demand and
customer satisfaction. It then engendered a lot of
confidence, respect, but we're able to completely reengineer
our supply chain operation, save a lot of costs, deliver on time
and bring a whole range of new benefits to the table.
Dan, it's been amazing to see how as Next Power executes gets
bigger, it brings more of a focus to the industry.
A lot of folks like to joke that you're the industry rock star.
You're actually are a literal. Rock star It's with.
Groupies and everything. With groupies and everything,
we're, we're standing around in the hallway, Jigger and people
were walking up going you're the, you're the guitar guy.
No, he's known as the guitar guy as much as the CEO of Next
Power. I guess I have a couple of
things that I wanted to pull threads on because you mentioned
what ACP is doing. Jigger mentioned that the
narrative is really the most important thing.
My question was going to be what, what's the most important
thing to get right over the next five years?
I think it is the narrative, but why don't we see a, more CE OS
like you on CNN and how do we get them there?
And then, B, why don't we see more companies and CE OS leading
with their checkbook to create the kind of political power that
we need? What's that going to look like
over the next five years? Yeah, well, I think, you know,
giving a shout out to some of our brethren and and sister
companies in the space. I mean, amazing leadership from
David Carroll at Ng, from Sandia at, at EDPR, you know, next year
has really stood up and, and done great work with John
Ketchum and, and what Silicon Ranch is on regionally in the
Tennessee Valley area. Leeward has done in, in their
realm, Desiree. And so all these companies,
we've seen some really great leadership folks stepping up to
really tell our, our story about delivering reliable power that
can happen quickly, affordably and, and create a lot of
employment. So we are seeing increased
engagement and leadership with folks getting out there and
doing it. And I think we, but I really
want to encourage anyone that's a participant in this industry
to really lean in on this and be confident about telling the
story of what you're doing with your products and services.
And we really want to see the everyone be successful in this.
The the enemy is not the renewable energy company down
the street that might be a competitor.
The enemy is really old ways of thinking and us not really
because we are the we're not alternative energy as we've been
discussing. We're mainstream energy and we
need to start acting like that. What does that look like though,
Dan? I mean, like, just to finish up
here, I think when you look at the state that we're in right
now in North Carolina, we have over 7000 megawatts of operating
token farms in the state, most of which are have a power
purchase agreement with progress, which is now part of
Duke or Duke, right. And you know, like they have
just issued a 15% rate increase to do things the old way.
The new way would be to take Amazon up on their offer to
build batteries at all of these, these, these sites and build
capacity that way, right. At some point.
I, I guess what I'm trying to understand is there's narrative
and then there's the fight, right?
This is a Public Service Commission.
It's an actual, you know, docket at, you know, the Public Service
Commission, the vertically integrated utility says, you
know, I want to do it the old way.
You're saying we're 90% cheaper if you do it the new way, right?
The data center companies are like, we'd rather do it the new
way because we don't want to get blamed for a 15% rate increase,
you know, like, but as that fight progresses, right?
You've got a governor who may not be a PhD in electricity
regulation, right? Like how?
How do we as an industry help to get those better outcomes?
Right. Well, I think I, I really think
a number of the folks you mentioned are trying to lean in.
Governor Josh Stein will be here today.
I have the pleasure of introducing him and they has
been a champion for a clean power for a decade going back to
his work as Attorney general. He's participating in this
conference with a with an address and these investor owned
utilities. We're trying to lean in to make
it a win win for all the participants.
We've been serving the data centers with the corporate off
takes has been it's not a new thing.
It's probably one of the dominant drivers of demand and
let's make it a win for these utilities.
I think what we're really focused on also is the
engineering around interconnection, making sure the
inverters keep, you know, stay with the grid and keep
supporting it. I think there's so much
opportunity with with our technology is a much better way
to generate power and control the grid than a rotating
machine. We're just, we've engaged with
an X power, we've engaged with Nerx zip to basically we're
working on an engineering bit level to essentially show wow,
the flexibility of these inverters for ancillary
services, Walter support ride through frequency regulation to
be able to do those things and pair with batteries.
There's a tremendous opportunity.
We again, we're mainstream energy now with solar and
storage. Let's start doubling down our
investments with all the stakeholders you mentioned and
really be a solution that also they can win with their current
business models. They want to keep the lights on
and I don't blame them. I used to work at a utility.
So I, I really think we're part of the solution and we're going
to do our best at Next Power. We're building some additional
labs. We're working collaboratively
with those stakeholders to really continue to innovate, to
find solutions that are frankly lower cost, higher reliability,
but create more economy, faster to market and Oh yes, better for
the environment than those legacy ways of generating power.
What's that, Dan? Jigger, thanks for all your
amazing work and Congrats on Energy Empire podcast.
And Nico, always a pleasure to work with you.
Thanks, Dan. Thanks, Jigger.
Give it up. That was Dan Sugar, and that
wraps up our series from the UNC Clean Tech Summit.
If you enjoyed these conversations and you want more,
including our episodes with John Shoka from the conservative
Energy Network and investor Ahmad Shatila, go to Suncast.
Find Nico Johnson wherever you get your podcasts.
Thank you so much for listening to Energy Empire.