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Renewables will be main power source for data centers: Nextracker CEO


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Photoelectric modules at a solar farm in Hanstholm, Denmark. The solar panels are part of the renewable energy sources that power Apple’s European data center in Viborg. 

Christoph Dernbach | Picture Alliance | Getty Images

The surging power needs of artificial intelligence and data centers will be met primarily with renewable energy — not fossil fuels, according to the CEO of a leading solar company.

The natural gas industry believes it is best positioned to fulfill the surging power demand from data centers, arguing that renewables aren’t reliable enough to power these energy-hungry projects alone.

But Dan Shugar, the CEO of Nextracker, said the low cost and rapid deployment of solar as well as the ambitious climate goals of Big Tech will make renewable energy the preferred power choice for data centers.

Nextracker builds systems that allow solar panels to track the position of the sun, increasing the efficiency of renewable power plants. The company has beat Wall Street expectations for four straight quarters. Nextracker has a backlog of more than $4 billion and has shipped 100 gigawatts to date, twice the peak power load of California.

Nextracker shares are up 19% year to date and 37% over the past two months. About 80% of Wall Street analysts who cover the company rate its stock as buy or overweight, according to FactSet.

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Nextracker shares year to date

Shugar pointed to the more than 1,500 gigawatts of power generating projects requesting connection to the electric grid. Solar represents 70% of those projects, or 1,028 gigawatts, according to the Lawrence Berkeley National Laboratory, a Department of Energy sponsored lab.

When including wind power, there are about 1,400 gigawatts of renewables seeking connection, which is more than the entire installed capacity of the U.S. electric grid. Gas projects, on the other hand, make up 79 gigawatts, or 5%, of the power in line for connection.

“There’ll be some gas, but we believe based especially on the data published by the DOE, the predominant energy source for these data centers is going to be renewable energy,” Shugar told CNBC in an interview Thursday.

“Our industry is just way ahead, no matter how you slice it,” the CEO said.

Big Tech wants clean energy

The U.S. is our strongest market, says Nextracker CEO Dan Shugar

Goldman estimated that carbon emissions from data centers could more than double by 2030 to about 220 million tons, or 0.6% of global energy emissions, assuming gas provides most of the power….



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