OEM giant Flextronic’s US$330 million acquisition of tracking manufacturer NEXTracker could help it take advantage of an expected boom in utility-scale solar installations in the US ahead of the drop in the Investment Tax Credit (ITC) at the end of 2016, according to a leading industry analyst.

IHS Technology forecasts that single-axis tracker installations globally will grow by 20% per year to reach over 7GW in 2019. Meanwhile, in the US alone, single-axis tracker installations are forecast to exceed fixed-tilt installations by a factor of 3:1 in 2016.

Referring to the expanding tracker market, Cormac Gilligan, senior analyst, solar supply chain, IHS Technology, told PV Tech: “If you tie that in with the boom that is going to occur in the utility-scale market, particularly in the US ahead of the ITC reduction, there is a huge market opportunity. I think that Flextronics acknowledge this as a big opportunity.”

Gilligan said that as Flextronics has a large global footprint, it will be able to assist NEXTracker in its expansion into new markets and in the promotion of the benefits of single-axis tracker technology. Meanwhile the scale of Flextronics will also “vastly improve” the bankability of NEXTracker’s technology.

Importantly, both companies were already supplying equipment to PV developer SunEdison before the acquisition. Flextronics produces modules for the developer, while NEXTracker is one of its leading suppliers of trackers.

Gilligan said this makes the acquisition hugely beneficial for SunEdison, because one of the complications of mounting structures for project developers is that they often have to deal with different sizes and different suppliers at each installation, which can be time consuming with high labour costs. However, by dealing with just one supplier as will now be the case for SunEdison, the installation becomes streamlined, reducing the time of deployment and labour costs.

Gilligan said: “This is one of the biggest parts in the supply that mounting suppliers are really trying to tackle at the moment, especially in the US where the hourly labour rate is quite high.”

The analyst also said that one of the key target markets for single-axis trackers is the Americas region where single-axis tracker installations are forecast to reach just under 4GW in 2016.

He added that the next 12-18 months holds such a huge market opportunity in the US and in the Central and South American markets that NEXTracker will most likely focus on these markets before slowly expanding into other markets in EMEA and Asia.

Finally Gilligan said that the tracker market leader Array Technology has acknowledged that NEXTracker is a serious competitor by recently releasing a new third version of its tracker technology.