“We were early, and I’m glad we did that then, because we learned a lot,” Shugar says of the five projects NEXTracker did back then.
Speaking from the Intersolar/ees Europe in Germany this week, the CEO tells ESN Premium that between now and the recent decision to acquire US-headquartered battery energy storage system (BESS) integrator Prevalon, a lot has changed.
The acquisition, expected to close in Q3 of 2026, will extend Nextpower’s technology platform across BESS and intelligent controls for critical power infrastructure, with particular emphasis on the rapidly growing data centre market.
“We saw lithium really become mature, achieve the safety status, achieve the cost progress that we needed to see in order for us to really embrace, put our brand behind it, and scale it. When we were initially in, it was too early for flow, and the lithium stuff was too immature for us to really scale it globally,” he says.
“Now that technology has achieved tremendous progress in cost, performance, and safety, we’re all in to really embrace it and bring those solutions forward for customers.”
Meanwhile, Prevalon CEO and president Tom Cornell tells ESN Premium that the BESS company’s strategic positioning is in the data centre sector.
Prevalon has secured 1.3GW in firm supply contracts, all dedicated to data centre projects with hyperscalers. “Those are all data centre projects,” Cornell confirms, noting that six projects are currently in various stages of development, with two fully released.
Cornell highlights the evolving nature of data centre energy requirements: “Each one of these data centres is different, whether they’re behind the meter (BTM) or even if they’re partially or totally connected to the grid, and we’re seeing all forms of gas generation that storage is being coupled with.”
While approximately 80% of Prevalon’s 6GWh deployed globally currently represents utility-scale projects, Cornell projects a 50-50 split this year, potentially reaching 75% data centre applications within several years.
Prevalon to operate as standalone division
The acquisition valued Prevalon at US$365 million. Shugar says the system integrator’s 6GWh deployed across 35 projects, mostly in the US but with some notable Latin American projects in Chile, gave it a strong track record that was a big part of the attraction. Prevalon was spun out of Mitsubishi Power Americas’ energy business, so its power-sector background was also a factor.
Nextpower said in its May announcement that it has forecast global BESS demand will reach US$35 billion, with US$15 billion in the United States alone. For a company that has made Prevalon one of 12 acquisitions in the past two-and-a-half years, branching out into energy storage was a logical step.
With other potential targets Nextpower could have chosen, Dan Shugar says the selection process included direct conversations with Prevalon customers, as well as due diligence of its business and technical metrics.
“I personally spoke with six of their customers about their experience in dealing with Prevalon, and it got just universally high marks in terms of the experience of the team, the solidity of the technical approach, and the offering, and then very high marks with support during pre-construction and design, product fulfillment, factory acceptance testing (FAT), commissioning, and then service and availability time of the product,” the CEO says.
“We know a lot about solar and power conversion, but the intrinsic battery storage part was something that we didn’t have that much experience in, so we wanted a team that brought that, and the idea is that they’re going to operate as a wholly owned subsidiary.”
Acquisition spree that includes synergistic PCS deal
On the last point, Shugar elaborates that while most of the other acquisitions Nextpower makes are fully integrated, Prevalon will be “more standalone, operated more as a division.”
“There’s an intact team and business processes that are quite mature, and then we will support with complementary areas, typical things like treasury, and so forth, but the fundamental team is in market, and we’re going to be supporting them after the merger closes with areas where we can add value,” the latter including access to Nextpower’s global sales network.
“We’ll offer this in markets where customers need energy storage solutions, so it’s highly synergistic. We’ll help it scale quickly, but they already have a great product, a great offering, tremendous customer respect.”
Other companies recently acquired by the tracker company-turned PV solutions provider include heavy-duty solar ground-mount foundation startup Ojjo, steel foundation company Solar Pile International, electrical balance-of-system (BOS) maker Bentek, and steel frame manufacturers Origami Solar in the US and Zimmerman in Europe.
The Zimmerman deal was one of the three announced since the beginning of May, along with Prevalon, but it’s the acquisition of Spanish power electronics manufacturer Zigor and its US subsidiary, Apex Power, that has the most direct relevance to the company’s BESS market entry.
The synergy between Zigor-Apex and Prevalon will likely prove important on both the US and Europe, due to bidirectional power conversion system (PCS) equipment for BESS being “a really critical piece of the technology stack,” Shugar says.
“You’re interfacing with the grid, there are cybersecurity requirements. In the US, there are foreign entities of concern (FEOC) considerations, and there are reliability concerns on the product. We’ve really focused heavily on being able to solve all the customer requirements, so our strategy there is to build significant domestic capacity quickly in the US with the power conversion that delivers best-in-class reliability and service, but also have overseas supply and have a significant amount of supply available.”
Prevalon CEO Tom Cornell says there will be evaluations of integration opportunities with Apex’s PCS. Prevalon’s product range currently includes its HD5 DC and recently launched HD5 AC BESS block products, designed for 2-, 4-, 6-, and 8-hour duration applications. Prevalon’s InsightOS energy management system (EMS) software platform will continue to be developed post-acquisition.
“I think once we come together, we’re going to be looking at that overall platform, especially for projects that are solar, storage, and looking at an overall control system,” Cornell says. The company will also maintain its collaboration agreement with software and engineering firm Emerson, particularly for data centre projects.
The Prevalon CEO notes that Nextpower is “very keen on investment, R&D, acquiring,” and expects the combined entity to pursue strategic investments in energy storage technologies, software for regional transmission organisations and competitive bidding markets, and complementary data centre technologies.
Supply chain and manufacturing strategy
Regarding PCS supply and servicing, Nextpower will, once the Zigor deal closes, have access to European, US, and Asian supply solutions. The company takes supply chain “very seriously” and wants to replicate its early-adopter lead in solar, where it has over 100 manufacturing partners in addition to its own factories, in energy storage.
“We have a partner strategy similar to what Apple does for computer products. We’re a technology company,” Shugar says.
“We do operate some factories, but we have supply chain partners that make for us, in many markets around the world. We’re applying that same playbook to power conversion, and that can be offered either as its own category or to support the storage.”
Meanwhile, acquisition target Prevalon’s main BESS contract manufacturer is China-based Clou Electronics, part of the Midea Group conglomerate. However, Cornell indicates the company will maintain this relationship selectively post-acquisition.
“I think we will still utilise them for some projects where it makes sense,” he says, noting that with recent trade policy changes, “we’re looking to diversify our supply chain more outside of China.”
Prevalon has already expanded its AC product supply chain to include facilities in the United States, Indonesia, Malaysia, and Thailand. “Most projects in the US will have a blend—they’ll have a Chinese component, and then a US or Southeast Asia component,” Cornell explains.
Of course, that diversification away from Chinese supply chains is a recurring constant of industry conversations, particularly with US-based companies for reasons of FEOC compliance and domestic content bonus eligibility for the investment tax credit (ITC).
This is especially heightened for battery cells, which still comprise the highest share of project Capex, meaning that while some other components such as enclosures can come from China and projects still be eligible for the ITC, cells cannot.
Just a few days after the planned Nextpower takeover was announced, Prevalon announced a 10GWh multi-year supply deal with AESC’s factory in Tennessee. The factory, which also supplies cells to Fluence, has been owned by US startup Fixx Energy since its former Chinese owner, Envision, divested, although Envision remains involved as its technology license holder.
“Prevalon is in the enviable position of being able to meet customers’ needs with whatever blend of domestic content material they need, as NextPower is with our legacy tracker and solar products,” Dan Shugar says.
“They’ve been able to satisfy customer requirements, for whatever their domestic content requirements are, and the [AESC] supply deal further amplifies that.”
Go-to-market strategy for European expansion
While Dan Shugar is in Germany when we speak, just a few days after the announcement of the acquisition of the European solar steel frame company Zimmerman, he says a European expansion plan for Prevalon is another logical next step.
However, those plans are not yet crystallised.
“Yes, we are here in Europe. Yes, there is a tremendous need for storage here in Europe,” the Nextpower CEO says.
“We’re a global company. Now, we’re not going to try to offer everything, everywhere, to everyone. What we’re going to do is have a go-to-market plan that focuses on the areas of highest need.”
Together with legacy Nextpower customers on the continent and customers acquired when the Zimmerman deal closes in the next few months, “we’ll be able to have a go-to-market plan to bring the Prevalon technology to customers for Europe,” he says.
“Currently, we’re not doing that at the show, but we’re setting up to be able to offer that to customers in the near future.”
Prevalon’s Tom Cornell says that once the deal closes, the companies will be “going full-bore” on international expansion. The BESS integrator is already preparing for the go-to-market phase Shugar mentions, expecting to begin product certification for Europe immediately and be able to deliver into the market if needed within 12 months.
“I envision it’s going to probably take us a few months to get certified in that market, but we want to hit the ground running and hopefully get products delivered within the next 12 months into Europe,” Cornell explains.
While initial international focus will be utility-scale deployments, Prevalon is positioning for future data centre demand.
“A lot of these international markets, the data centre wave is coming, it’s not like what’s happening in the US, so they’re probably a couple years away, and then we want to be ready when the data centres start popping up in Latin America, Europe, etc,” Cornell says.
Yet, as Dan Shugar says, Nextpower is not in the business of trying to be all things to all people. ESN Premium jokes that the near-continuous acquisitions invite speculation as to what might come next, including perhaps moves that could facilitate an own-and-operate developer business model. The Nextpower CEO is quick to bat away the speculation.
“If you start getting into owning projects and so forth, that’s a completely different business model. What we’ve really been doing is delivering technologies and manufactured solutions that have very high quality, reliability, and performance attributes,” Dan Shugar says.
“That’s been the DNA of Nextpower, and what we’ve been focused on. What’s great about this Prevalon thing is that we’ve been looking at the battery storage ecosystem for a long time. What we really liked about Prevalon was the experience of the team. They’re coming at it from the power industry. The team was part of Mitsubishi Heavy Industries, and with a joint venture with Hitachi, had experience with 35 projects.”
Dan Shugar was interviewed by Andy Colthorpe, Tom Cornell was interviewed by April Bonner.
