Green Giants – Episode 98

Wes Ashworth (03:23)

Absolutely. I like a lot of that. I like the early line, just curiosity and kind of seeing some early technology as even as a kid. Reminder out there, those parents, like take your kids to go see cool stuff. You never know that could end up being a career and peak that curiosity, which I love. What stands out to me is just that through line and not just industry experience. It’s a way of thinking about complex systems, asking better questions, helping ideas really become real world outcomes.

As I shared there and you’ve kind of touched on too, you’ve worked inside some very different environments, across Dow, to consulting, Motiva, Aramco, Honeywell, now ARRAY. What did each chapter teach you that still shaped how you lead today?

Aaron Gabelnick (04:01)

Sure, so each is a different layer. I’ve had a little bit of a tortuous path through my career and done a lot of different things, but they all reinforce the same core idea. It’s really how you take complexity and make it work at scale. Chemicals and starting out at Dow really taught me some discipline on the systems and systems that don’t forgive mistakes. A lot of the industries that I’ve worked in are very humbling.

Small mistakes or small miscalculations can have some pretty significant and serious consequences. Starting at Dow, you take that into not only what you’re doing, but how you’re leading as well and how you’re thinking about problems with your team. Consulting really, it’s more about structured thinking, right? How to break down problems, make decisions and uncertainty. Oftentimes the projects that we were working on in consulting had impacts, not just to the systems and the assets that we were working on, but the people. Taking that and seeing that the decisions that you’re making and recommending to clients have real world implications to employees, to people, and that is always something to keep in your mind as you’re thinking through what makes the most sense, not only technologically, but also for for the organization.

Refining in my time at Aramco, that’s scale, right? That is huge, huge, huge scale. Execution, there’s massive decisions where again, small decisions can have big consequences. Aramco was thinking through the nation’s natural resource and what it is for the future of their society. So those decisions and thinking through those strategic options have tremendous implications for the organization and treat things in a very risk averse type of way. Then now it all sort of comes together at ARRAY and it’s building infrastructure that has to perform not just on day one, but consistently over decades.

Wes Ashworth (05:44)

Absolutely. All those environments are very different, but I like some of the similarities to and kind of thinking that that sort of small decisions with very big impact and big consequences as well too and kind of thinking that way. With that too, just kind bringing you to where you are today, like much of your career has been spent around like large capital intensive systems. What does that experience just teach you about how serious infrastructure actually gets built in the real world?

Aaron Gabelnick (06:09)

The infrastructure and especially those large capital projects, there’s a lot of thought and review that needs to go into that. That’s a little bit different from the renewables perspective, where oftentimes speed is most important and oftentimes very valuable. But certainly in the large petrochemical world and oil and gas world, decisions have to be made and they have very serious and significant consequences.

Both economically and then also for the people that are impacted by those investments and those decisions. It’s a matter of balancing speed and reliability and making a good decision and being a good steward of the company’s money or looking at the project. Understanding risk, understanding the reward and the broader strategy of the company and how things fit is critically important.

Wes Ashworth (06:59)

Absolutely. Critically important, such an important grounding point in energy. The real challenge is really the idea itself. It’s the discipline required to turn it into durable infrastructure. Kind of through your career, you obviously you were in some adjacent areas. But at what point did renewable energy maybe become just a little bit more of a place you wanted to help shape the future directly? What brought you there?

Aaron Gabelnick (07:18)

Sure, so early on renewables was an opportunity, right? There were certain projects, certain things where whether it was looking at bioplastics with Dow, biofuels, renewable supply chains, et cetera, or even solar in a number of the projects or methanol economy or looking at other renewables. It was always viewed as sort of an opportunity of this is a different way to do things, but it’s sort of solving the overall problem.

But now it’s more about, to me, there was a little bit of a change in terms of sustainable development and really thinking about the energy transition and not just opportunities. It’s not just environmental, but it’s now economic, it’s now strategic in terms of these opportunities. The well-executed energy transition, it’s about economic growth, it’s local employment, it strengthens energy security.

Itt creates a more resilient system. Bringing that all together in renewables, it’s not just an opportunity anymore. It’s really something that I wanted to drive and help shape and get involved in in a more significant manner.

Wes Ashworth (08:19)

Yeah, I love that. To me, it’s just a sign of the industry doing well, heading in the right direction. You see so many like oil and gas folks or chemical folks or other places coming into the industry saying what you’re saying as well, too, that they really do see the power and potential and where it’s it’s headed and it’s gotten to. I always love to see that. Kind of seeing both of those worlds. Right, so being in traditional energy and renewable energy, really from the inside, what do maybe people in each world often misunderstand about the other?

Aaron Gabelnick (08:47)

That’s a very good question. I think, it’s sort of a generality here, but I think oftentimes both sides seem to oversimplify the other. Fom a traditional energy perspective, there’s sometimes the view that renewables are intermittent or they’re less reliable. You still see that in media and commentary today, and they’re not ready yet to support the overall energy system.

I think that perspective is underestimating how quickly the technology has advanced, how much progress there’s been made in solar and batteries and scaling and cost reduction and system integration. Solar today is not what it was even five years ago in terms of its competitiveness, its scale and its reliability and being part of the energy mix.

If I had to say on the renewable side, I think there’s a bit of a tendency to underestimate the complexity of the traditional energy systems. These systems are huge. They’ve been built and optimized for decades. They’re deeply integrated, just even down to the local gas station. They’re highly reliable and operate at very, very large scale. There’s also some of the execution discipline around safety and reliability that is part of these large scale projects. I think both sides do miss something. Again, this is more of a generality. But I think the reality is that we need both perspectives. We need some of that reliability and discipline that comes from the traditional energy space. We need the innovation and the speed and adaptability of renewables, especially with data centers and AI and some significantly increased energy demand that, especially in the US and around the world that we’re seeing, renewables play an incredibly important part of fueling and of providing energy to those, to those endeavors.

Wes Ashworth (10:32)

Great point on both sides there. I know a little bit of generalities, but I think those main themes though are pretty much true that I hear pretty often. Let’s now bring the lens into ARRAY a bit because this is one of those companies that plays a critical role in project performance, even if many people from outside the industry don’t fully understand it yet. Listeners who are less familiar, what does ARRAY really do, and why do trackers matter so much in the performance of a project?

Aaron Gabelnick (11:00)

At a basic level, we build solar tracking systems that allow the panels to follow the sun from sunrise to sunset. The story of ARRAY begins with our founder, ARRAY’s founder, Ron Corio, who was working on efficiencies of solar cells 30 years ago. He realized that moving the cells, physically moving them and following the sun, had a higher efficiency gain than many of the ideas that he was working through for improving the cells from a physics and chemistry perspective.

Depending upon your latitude and the amount of sun and number of cloudy days and the terrain, a properly designed and engineered solar tracking system can improve efficiency of the solar panel by up to 25% or more. That efficiency gain is critically important to the utility scale projects that are trying to get out as much energy as possible.

That’s fundamentally what ARRAY does is build that infrastructure, build that backbone for the solar panels to move from sunrise to sunset and also provide some of the, it’s more than that from that basic level of on cloudy days, being in a different position, not tracking the sun is better than tracking the sun from an energy production perspective. Having that system work day in day out for 30 years, outside in the weather, in the rain, in the cold, in the heat, having a system that does that is what ARRAY does and what we’re known for doing well.

Wes Ashworth (12:30)

It’s great framing. To me, it makes clear that trackers are really not some peripheral component, which some may be outside of the industry would think so, but they are really central to how a project performs over time. We’re talking about 25% efficiency gains. Like those are huge numbers in the grand scheme of things. When you talk to customers who really understand the space, what part of ARRAY’s value specifically tends to just click with them immediately?

Aaron Gabelnick (12:51)

Different customers, they have different things that they’re looking for, whether they’re EPCs or developers, et cetera. But they’re generally interested in different factors. Cost is always part of it. But design, energy production, your ability to deal with terrain because you want to not move as much dirt as possible, whether you can work in severe weather conditions, bankability, but all that sort of boils down very quickly into a levelized cost of energy or LCOE.

It’s not just the upfront cost, but it’s how do you reduce the lifetime cost of energy for the asset? That really comes down to the risk and the design of what you’re providing. On the risk side, it’s about execution, right? On time delivery, support.

The aspects of sort of running a good quality supply business, which ARRAY does well and then that reliability. Then the design, it’s that mechanical architecture. It’s the number of components that we have at ARRAY, which is fewer than most of our competitors and behavior in extreme weather conditions and our ability to produce in those conditions.

Wes Ashworth (13:56)

Absolutely and you mentioned sort of design, so get into that a little bit. Industrial businesses, differentiation usually comes down to very specific design decisions, not broad marketing language. What are those key choices that define ARRAY’s approach?

Aaron Gabelnick (14:09)

There are a couple of things that we offer in our design and think about in our design. One of them clearly is a windstow methodology. That’s the condition where in higher wind gusts of repeated duration, of longer duration, the system can become unstable. How you deal with that, and ARRAY has a patented windstow technology that deals with that differently than many of our competitors.

We have design flexibility when it comes to terrain following trackers. Again, you want to minimize the amount of earthworks in a system just from an environmental perspective and honestly just a cost dirt moving perspective as well. We have fewer parts and sensors. Many systems, most of the systems have no batteries.

There’s an O&M aspect, an operations and maintenance aspect as well. Our reliability comes down to sort of our 30 years of experience of having systems in the field that customers can look to and see the reliability and the performance.

Wes Ashworth (15:06)

You mentioned too like one of those differentiators being Windstow and touching on it a little bit there. I guess in simple terms, how does it kind of work? Like what’s happening when you talk about Windstow? What should listeners know?

Aaron Gabelnick (15:20)

Sure. At a technical level, windstow is about aerodynamic stability. Higher sustained wind gusts, the trackers can become unstable. They’re like a sail. They can begin to resonate with the wind. It’s similar, I’m sure many listeners have seen that famous video of the Tacoma Narrows Bridge in Washington, which starts to undulate and eventually break apart, even a steel and concrete suspension bridge. Well, those same forces in that same resonating with the wind can occur with our solar systems as well.

There are sort two approaches to deal with that from a tracker perspective. There’s what’s known as active systems and they monitor and respond to wind site conditions. They use protocols and algorithms and motors and controls and say; hey this is a dangerous situation. The panels move to a safer position for their wind stow and then the second is a passive system and that’s what ARRAY uses. That uses physical and mechanical design of the tracker to safely stow the system under these conditions. That’s ARRAY’s patented approach.

That approach is a mechanical clutch mechanism. It’s a mechanical system. It allows the system to move, the solar system to move into a safe position when the forces build. Importantly, it operates just on the affected rows. With an active system, you have to say, listen, there’s dangerous conditions. Therefore the entire site needs to go into stow. With ARRAY’s system, only the rows that are affected are basically forced or pushed into a stow position. That leads to improved reliability. You don’t have to depend on weather station, controls, or software to make a decision or a measurement device. It also maintains energy production. Only the rows that are affected move and the rows that are unaffected keep tracking the sun to that 25% efficiency gain.

Wes Ashworth (17:09)

Absolutely. It’s such a good example of how a technical design choice can really translate it directly into better project outcomes. It sounds kind of simple, but there’s complexity that goes into that. Clean energy sometimes does fall into that trap of assuming that more complexity means more innovation. Where do you think simplicity and elegance in design matter more than people realize?

Aaron Gabelnick (17:28)

You think about these systems that are outside for 30 years. An ARRAY system has no scheduled maintenance. There are no batteries, there are no batteries to change, there’s no scheduled maintenance. That simplicity comes in into long lived infrastructure. If you don’t have to constantly maintain these systems and they’re constantly performing, that’s sort of our thinking and our motto and our design ethos is working in that space.

If you think about it just from a reliability perspective, even if a step in the process is 99% reliable, if you stack those up over 10 steps, you have 99%, 99%, 99%, the whole system has a reliability of 90%. The fewer steps that you have improve overall reliability and reduce that O&M cost and that risk, and that’s important to the power producers and to our customers.

Wes Ashworth (18:20)

Absolutely. I love the kind of simplicity and keeping that in mind when we were looking at design for exactly the reasons you just shared. I love how put that sort of the stacking of the 1%. Really valuable point. I think in infrastructure reliability, repeatability and ease of operation often end up being really the real breakthroughs. Another place that the theory meets reality very quickly is weather. We started to touch on this briefly as we’re talking about some of those things, but it’s become one of the most important sort of practical conversations in solar.

Severe weather has become obviously a much bigger part of the solar conversation. How has the industry’s understanding of weather risk changed in recent years from your perspective?

Aaron Gabelnick (18:57)

It’s moved. Weather has moved from a sort of a boundary condition to a core design driver and how we think about and how we build our systems. The real-world events, hail and wind and extreme cold and extreme heat have exposed some of the vulnerabilities of the previous designs of systems. We’ve seen some failures under those conditions.

It’s not just about, surviving those, it’s about performance during them at this point. It’s really sort of upped the game in terms the need for an engineered and well-designed system that not only survives reliably during some of those extreme conditions, but also, performs, that protects the system, protects the panels, protects the overall infrastructure. That’s really changed in the past several years.

Wes Ashworth (19:44)

Absolutely. I think in part just we’re thinking more long term and in these 30 year systems and kind of keeping that in mind as we’re designing. But probably these weather events are happening more and more often as well, too. We can’t really ignore it. It is interesting that that the industry you’ve seen that sort of move from like more of a side issue to really treating it as a design finance and operational issue really is built in from the beginning. As anything kind of else, we mentioned sort of the passive stow technology and that sort of stuff like any other things that you’ve sort of recent design changes that that ARRAY has had to deal with sort of these severe weather events or these things that are happening as well?

Aaron Gabelnick (20:19)

Absolutely. Part of this is driven significantly by hail. Roughly, if you look at some of the projects that are moving forward, roughly a third of the projects in the US are in the hail belt area, lot in Texas and moving up in that corridor. Those storms, can be catastrophic. They can destroy hundreds of thousands of modules, cost hundreds of millions of dollars and destroy the systems.

I think there was a recent report from Kilowatt Hour Analytics that said that the number of insurance related events that hail caused, it was 6% of the total number of recorded events, but it was 72% of the financial losses. These events don’t occur as often, but when they do, they can be catastrophic. That has led us to develop several areas of hail technology for tracking systems to help protect these solar systems in the field, especially in hail risk areas.

The first is our patented hail alert response technology. The second, and that’s more of a software related and that’s predicting the hail, the direction of the hail, the size, the likelihood of it impacting a site. If so, stow your system automatically. No human intervention required, just be safe and stow.

The second is our Hail XP Tracker, which stows the panels at 77 degrees. Why that matters is the higher tilt angle of the panel being at 77 degrees, it sort of leads to a glancing blow of the hail. When the hail is coming down, the worst thing that you can imagine is that your panel is perpendicular and like the hail comes down and impact and breaks the glass. If you are at a very high angle, essentially the impact is glancing and the energy continues to go down as opposed to into the glass and breaking the panel. Those two products and in combination is really trying to mitigate some of those risks associated with hail damage.

Wes Ashworth (22:14)

Absolutely. Pretty cool design changes there and just what you’ve done to innovate. I love that 77 you’re like such a very specific angle and I’m sure there’s tons of engineering and math and physics that went into figuring out that exactly 77. That’s the sweet spot. I love it. As you said, like these are huge, the risk avoidance in terms of small number percentage of others claims at massive in terms of just revenue loss and just how that all works. How important those just little changes are and how those innovations have happened and obviously what you’re doing there. I love that.

When you think about resilience, how do you break down the relationship between hardware, software and operational discipline?

Aaron Gabelnick (22:52)

There’s a mix, right? The hardware is the foundation. The system, again, is out there for a long period of time. That’s the foundation of the system. That’s where a lot of the resilience comes from. The software enhances that. Our software suite of technologies with SmartTrack can make some of those small differences with backtracking, solar backtracking.

Again, with the hail alert response, with snow alert response, and those that sort of enhances overall resilience, but also performance of the system. In operations, it’s just about execution. At ARRAY, we are not the installers, the operators, but certainly we’re part of that. We listen to our customers and listen to the operators to design things more effectively, more easily.

Again, that resilience, starts with hardware. It starts with a well-designed system in the field. You can do many things to work around that. Many of those other aspects reinforce each other. But at ARRAY, we’re building systems that are designed for that resilience.

Wes Ashworth (23:53)

I like the breakdown because resilience is rarely one thing. It’s usually the interaction of engineering, intelligence, execution, of bringing all those pieces together. Another thing, so solar is often described as simple because the fuel is free, but the asset still has to perform in the field for decades. How should people think about that distinction? What’s the real truth there?

Aaron Gabelnick (24:16)

I think if you break down many things, they become simple. The overall installation, and that was my thought coming into this industry, is I was working in $10 billion plus petrochemical plants and things like that with a lot of sophistication and chemical engineering and everything that’s in mechanical engineering that’s behind it.

Solar’s not that complex, when you scratch the surface and you go down beyond you realize that there’s a complex ecosystem of all of the modules themselves, the trackers, the foundations, the subsoil, the electrical aspect of things and designing the system. It becomes a more complex system in every aspect reinforces the other. Oftentimes we’re talking about small marginal improvements that start to add up and build up.

I think that’s true of many of the systems that exist in the natural world, in the world that we live in. The more that you look at it, the more complex you realize that it truly is, and all these parts are interacting with each other. There’s some maturity of the system that is occurring that needs to occur in optimization, but we’re getting to that point of maturity.

Wes Ashworth (25:26)

Absolutely. Love to hear that perspective. You hear it a lot from people that have maybe come from other industries that get into it, eh, I thought it was going to be a lot more simple. But the more you dig into it, layer by layer, it definitely gets more complex as you go. I’ll touch on one quick thing before we kind of move on. If a developer asset owner focuses maybe too narrowly on upfront cost when choosing a tracker, what are they likely missing?

Aaron Gabelnick (25:47)

There’s a concept that we use called technical entitlement. You think about the LCOE and you think about our design and what the technical entitlement is based on our design. If you’re only focusing on one aspect of LCOE, and some companies, EPCs oftentimes, that’s what they focus on because that’s, or flippers or others, that’s part of their bottom line equation. You have to understand that and you have to respect that.

But you also have to understand the whole buying thread that’s in there and they’re flipping these to others who are concerned about these things. Oftentimes it’s a matter of selling and having discussions with a number of the participants in the value chain. But if it’s just a cost element, and there’s certainly customers, around the world that think about costs and that’s all that they think about. We oftentimes have had these discussions with some customers. Our system doesn’t have batteries. What costs do you ascribe to? These systems are out there for 30 years. You’re gonna need to replace the batteries. There is some costs that’s associated with something as simple as this, let alone talking about passive windstow and some other more complicated aspects of things.

You try to break it down into those simple aspects of how our design is different than others and what that means FROM not just the individual EPC or flippers perspective, but how they’re gonna sell that to others in the future and the arguments that they can make as they go through that process.

Wes Ashworth (27:16)

I like that perspective too and kind of like speaking to who they have to sell it to and keeping that in mind. You know, it’s a classic sort of long-term asset mistakes or optimizing for the purchase decision instead of the life of the project. But these are long-term assets as we know. This brings us naturally into kind of strategy and capital allocation because your background gives you really a strong lens on how industry scale intelligently. ARRAY acquired APA Solar, a foundations company.

At a high level, what was the strategic logic behind that move and what went into that?

Aaron Gabelnick (27:48)

Sure, foundations to a tracker, that’s just a very logical adjacency. The products physically touch each other. In any system, that interface is oftentimes what is ignored from an optimization perspective, and that’s where value comes in. That interface between foundation and tracker, it impacts the behavior structurally, the installation efficiency, so cost to EPCs and to customers.

Oftentimes the long-term performance if you get that system right. What APA has an engineered foundation, they have very, very strong knowledge of subsurface conditions. Combining that with ARRAY was a very logical adjacency. APA also has a strong fixed tilt offering, and which ARRAY had offered in the past, but it wasn’t a significant portion of our current business at all.

APA offering the fixed tilt solution, especially at the utility scale. Sometimes that can make sense economically penciled out about 10ish percent or less of utility scale systems in the US use fixed tilt systems more elsewhere in the world. But especially in projects that are like in the Northeast US or in some terrain challenged and also expensive land conditions having that fixed tilt solution is important.

It broadened our capabilities not only on the tracker side, but also in the products that we offer to customers. We’ve seen some hybrid projects as well, where there’s some parts of the project that are fixed tilt and some that are tracker and being able to provide racking for both parts of the project is important.

Wes Ashworth (29:22)

Smart move at easy fit kind of just makes a lot of sense as you talk through it. Looking at this a little bit more broadly and in just your lens around M&A. How do you think about M&A in this market today? Is it more focused on like scale, adjacency capabilities, integration, all those or something else?

Aaron Gabelnick (29:38)

The industry is definitely maturing. We’re seeing that in some of our, both ARRAY and many of our competitors are looking at more from a system perspective. In the end, what an end user customer wants is that the system works well and is integrated. We have a balance of system strategy that is, and APA was certainly was part of that, was the first step in that strategy, building, engineering, designing systems that can work together. It improves the integration, it reduces risks for customers when we’re able to provide that system integration, and it drives better LCOE. That’s behind our strategy.

Wes Ashworth (30:17)

Absolutely. Very helpful. I think it separates that reactive deal making from real strategic thesis. As you said, as the industry matures, we’re going see more and more of that happen as well too. Definitely important to stay in tune with that and glad bright minds like yourself are in the industry that have a lot of that M&A background as well too to come with it and help us move forward. As we’ve already shared earlier, you spent years around these massive industrial and petrochemical projects.

What lessons from that world should the solar industry be applying more seriously right now?

Aaron Gabelnick (30:48)

Right, so we talked about it earlier that there’s some of these bigger projects, there’s deep understanding about these long lived assets, how they perform, optimizing them, the rigor that’s around the construction operations, the execution, right? Because if you make a mistake the cost of failure is very, very high, both in terms of financially and also with safety.

Solar has scaled incredibly fast versus some of these other industries and the scaling that they have been on with big projects every five, seven years or so and lessons learned in scaling. With speed, there are times when the execution hasn’t fully kept pace.

We’re seeing that, especially as solar is becoming critical infrastructure, having that discipline is more important. Rigor in the design standards, alignment between engineering and construction and making sure that the crew on the ground is actually performing and doing what needs to be done, because oftentimes that isn’t the case. We sort of have some of the consequences follow up, even sometimes years later of improper or poor installation is at the root cause of an issue. It’s not the design, it’s the installation. That focus on sort of the reliability of design, the simplicity of design, but also helping with the installation is critically important.

Wes Ashworth (32:11)

Absolutely. I really thoroughly believe that, like this is where cross-sector experience becomes so valuable. Young industries growing industries often sort of relearn lessons that mature industries learned the hard way decades ago. There’s a lot we can learn from from those industries and I’m thrilled to see more and more people from those industries coming into the industry as well too, and and leading and championing these companies.

We’ve touched on this. One idea that seems especially relevant in infrastructure is just that stewardship, thinking not in three year windows, but really over 30 to 50 years. How does that long view change the way you evaluate decisions daily and every day through ARRAY?

Aaron Gabelnick (32:45)

It’s interesting, right? We’re a public company. There’s quarterly pressures. You know, we’re thinking about business from that perspective. But the reality is from a technology perspective and a lot of things that I’m responsible for is thinking about that longer term view. I remember, and this is where some of my background came in, at Aramco, we had a 50 year view in some of the strategic decisions that we were being made. At no company that I worked at prior was a 50 year view of what the implication was for major capital decisions.

That’s a bit of an extreme, but it does bring in the importance of what we’re doing and the speed at which we’re doing it. These two sort of very, very long term, but having to deal with public company pressures and wanting to develop products quickly, it’s about risk and it’s about trying to mitigate that risk and working with customers to understand that sometimes things are not going to be perfect, especially with some of newer technologies.

If you understand that, if you can accept that, we can work together to try the newer thing. But it oftentimes is a little scary at times, right? That you’re putting these assets and putting these products out there that do live for a very, very long time. We can’t just do a software update remotely and have it be okay. These are physical assets in the field that will exist for a long period of time.

Wes Ashworth (34:05)

I love that frame. We’re seeing it more and more, just shifting the conversation from that short-term optimization back to what infrastructure is really meant to do. As we get a little bit closer on time, I want to zoom out a little bit. One of the most interesting parts of this conversation is how much nuance gets lost when energy is discussed in public. The public conversation around energy is often flattened into renewable is good, oil bad, or the reverse. What gets lost when the debate becomes that simplistic? I’d just love to get your perspective in general.

Aaron Gabelnick (34:35)

The energy transition, it’s a transition. It’s not a switch, right? The energy systems that exist today, they’re complex, they’re foundational to society. It’s not just about replacing energy, it’s about evolving it and maintaining stability. You get polarized positions, right? Good versus bad. It oversimplifies things. There’s a reality that not only for environmental reasons and for the future of our planet, but there’s also the future of our society.

The true nature of the energy mix is..it’s a mix of traditional energy sources and the renewable energy sources. Renewable energy sources at this point are more cost effective and they’re growing. They’re also better for the environment. I don’t think that there’s much controversy about those statements. But dealing with a transition and working towards a transition and making sure that society is able to meet its energy needs is critically important. For me, it’s that complexity.

Why things are the way that they are. There’s a lot of history that’s there and the infrastructure that’s built up and the significant infrastructure in traditional energy. There are gonna be differences, there are gonna be debates, but I think most people are working on energy transition on different ways and it’s just a question of timing, sooner versus later and the impact that it’s gonna have on our environment.

Wes Ashworth (36:06)

Absolutely well put. I agree completely there. Again, we see that oversimplification and the polarization. It may work on social media, but really is a terrible framework for building real energy systems. As you said, it is a transition, not a stop start. What is sort of a serious rational transition actually look like from where you sit? Like you’re sort of predicting this out. Like, what does it look like?

Aaron Gabelnick (36:29)

As much as I can look at my crystal ball here but there’s a sustainability aspect of things and the impact that climate change is having on our world. That has to be part of it, it has to be part of the discussion. As well as economic growth and the energy infrastructure that exists today.

Energy security is a big aspect to that and renewables, especially solar. The sun shines pretty much everywhere around the world. Solar is providing energy security, not just for the US, but for other countries in which they’re installing it. It’s local and that security is critically important. The reliability aspect is also important in building renewable systems that have that improved reliability that we’re seeing today. It’s sort of a mix of all of those things. It’s a balancing act. It is the transition, I do think that the renewables, solar in particular, are going to play a significant role in this transition and in growth and future energy needs.

Wes Ashworth (37:28)

Agreed. I’d say that the future is bright. I’ve said my crystal ball is broken. That seems like a pretty good picture. We’ll stick with that one. I like it. When people hear solar manufacturing, they often picture only modules. That’s first thing kind of pops in their head. What do wish they understood about much broader industrial ecosystem behind the utility scale solar?

Aaron Gabelnick (37:48)

If you think about the entirety scale solar facility, it’s roughly a dollar a watt. Depending upon module pricing, the module is right around a third of that. You have two thirds that is not part of that. If you include battery storage, it’s even less of a percentage of the overall cost of the system. You have from the foundations to the trackers to the electrical balance of systems to the software that’s operating it, right down to the installation and everything.

It’s really about the broader ecosystem and that’s something that at ARRAY, I’m particularly proud of our ability to take that broader ecosystem and relates to American jobs and American infrastructure and the things that we’re doing. I’m particularly proud of our ability to provide domestically sourced and supplied materials and provide, there are various tax incentives of doing that as well.

It’s that ecosystem that is not just a panel, and there are lot of panels that are manufactured in the US as well, but that local supply infrastructure, providing opportunities to people in the US and companies as well, that’s really critically important. I think that’s something that’s sometimes missed is how critical that infrastructure and that activity, that economic activity can be to local communities for putting in and installing sites and for building out that infrastructure.

Wes Ashworth (39:19)

That broader ecosystem story is one of the most underappreciated parts of the sector, especially as you just shared in the context of sort of American industrial capacity and job creation and those kind of things as well, too. I love that.

To close, I want to come back just to just leadership and the future because this industry needs people who can stay grounded while building through a lot of noise. When you look ahead, what gives you the most confidence and where this industry is going? What advice would you give to the next generation trying to lead through complexity and noise?

Aaron Gabelnick (39:46)

Energy is complex. That’s been sort of a thread throughout our discussion. But we’ve been through complex discussions, difficult transitions before, and innovation has really been at the heart of our ability to go through them. Solar has seen rapid innovations and massive cost reductions, scale deployment. That’s based on the industry and individuals in the industry focusing.

Making some of the technological breakthroughs, the scaling from an industrial perspective. People working and gaining this confidence, right? It hasn’t been easy, but if people put their minds to something, and I think there’s a lot of mission-driven people involved in the renewables energy and industry and solar industry in general, we can solve problems.

I’ve seen that time and time again, that people can put their mind to things, they can solve the challenges, they can solve the problems. Connecting with that mission and understanding that perspective, that’s what gives me confidence, that’s what gives me hope. We’re seeing it today. Solar is the lowest LCOE. It continues to drive down in terms of its cost profile. The sun, as far as I know, remains free. From a commodity risk perspective, these are the things that are important that are going to drive it into the future.

The better that we can make these systems, have them be secure, have them installed, properly, efficiently, quickly, that’s the hope, that it will even continue to grow even faster.

Wes Ashworth (41:13)

Absolutely. I love so much of what you said there and I think it feels like the right note to end on. The future belongs to leaders who can think clearly, stay steady, keep building. I do see it like in the recruiting world. We talk to so many candidates. We see these early-stage candidates as well, too. That’s one of the main things that they care about. They no longer just want a job. They don’t want to do anything that’s not meaningful. They want mission driven, world changing. They want to solve these big problems.

That gives me a lot of hope that they’re going to continue it and take it even further than we ever could as they come up as well, too. I love that. Those thoughts.

Aaron, thank you so much for joining us today. This is really a great conversation. I really appreciated the depth, the nuance and the practical perspective you brought to a topic that is often discussed in overly simplistic terms. There’s a lot here for listeners across solar, manufacturing, infrastructure, policy, and the broader energy world.

To everyone out there listening, thank you for being here. If you enjoyed the episode, subscribe to the show, leave a rating and review, and share this episode with someone in energy, climate manufacturing, or infrastructure who would get value from it. With that, we will see you next time.