American Sun

DEAN SOLON built a multibillion-dollar fortune in solar energy by manufacturing precisely the sort of commodity gear that can be made more cheaply in China. His secret: higher prices for higher quality.

- Chris Helman

At Shoals Technologies’ 100,000-square foot factory in Portland, Tennessee, Dean Solon’s quest for simplicity starts with the color-coded shirts, inspired by Sesame Street, that his workers wear. “The SunPower logo was yellow, so that’s Big Bird. First Solar was red, for Elmo,” he says. Those working on an order for Blattner Energy, a big solar contractor, sport Cookie Monster blue. “And then we have the Count, in purple. He’s always counting. Those are the quality control people.”

Shoals’ nonunionized workers at four factories in Tennessee and Alabama make the guts for big solar installations—basically, everything you need other than those shiny photovoltaic panels and the inverters necessary to feed power onto the grid. They craft cable assemblies, combiner boxes, external fuses. It’s exactly the sort of unsexy manufacturing that nearly everyone thinks fled to China years ago.

Indeed, most of Solon’s competitors are Chinese companies like GCL System Integration and Wuxi Sun King. The Chinese-made components are cheaper than Shoals’, but Solon has an edge: His stuff is seen as safer, more reliable, and easier to install. That means companies are willing to pay 5% to 10% more for it, believing they’ll make up for it in lower labor and maintenance costs. Last year, that premium added up to earnings of $34 million on $176 million in sales. After a January IPO, the 57-year-old Solon is worth some $2.2 billion, thanks to his 40% stake in the company and after-tax proceeds from prior equity sales.