Environment and Energy

Nucor Signs Supply Agreement with Solar Manufacturer

May 13, 2021

Nucor has signed a supply agreement with Array Technologies to produce components for Array’s solar tracking system. Nucor will supply Array with torque tubes and rolled steel for the production of clamps, foundations and brackets, and other components. The steel manufacturer will also partner with Array on the co-development of company’s next generation of solar products.

“As the largest recycler of steel in the U.S., Nucor is an ideal partner for Array. Nucor’s longstanding commitment to recycling, as well as their efforts to source a portion of the power they use in their production process from renewable generation, is consistent with Array’s corporate mission and values. As Array invests in innovation and develops technologies that will decrease installation time and bring down levelized cost of energy for our customers, we are proud to say that our products will be made with sustainably sourced materials,” said Jim Fusaro, chief executive officer of Array Technologies.

During Array’s first-quarter 2021 earnings call earlier this week, Fusaro said that demand in the solar industry is strong and quoting activity is at the “highest levels we have seen in our history. More than ever before, solar energy is becoming the first choice for a new generation. Unfortunately, at the same time we are seeing record demand for solar, our industry is contending with increases in steel and shipping costs that are unprecedented, both in their magnitude and rate of change.”

Steel represents half of Array’s cost of goods sold and the company does not keep large amounts of steel in inventory. “A significant increase in the price of steel over a short period of time can negatively impact our results,” said Fusaro. Rising prices necessitate the use of long-term fixed-price contracts with both steel suppliers and freight providers that will give greater control of costs and supply.

“We believe that what we are seeing in steel prices and shipping costs is temporary and does not suggest to us a permanent change in our cost structure or margins,” said Fusaro. “We believe there is more than sufficient steel production and shipping capacity globally to meet the world’s needs, and we expect prices will normalize once the restart of the global economy is complete following the pandemic shutdowns. As inventory is rebuilt and supply chains refilled, we are confident we will see more rational pricing ahead.”