In Privateer, when you hit the [S] key when you are at shield lv. 2, you cycle through the shields as follows:

[Level 2] -> [Level 1] -> [no shields] -> [Level 2]

This means, if you reduce your shield level down to Level 1, in order to get it back up to level 2, you have to take down your shields completely.

Is there any way to do this in the opposite direction? Like, hitting [S] brings you down from [Level 2] -> [Level 1], but then hitting [Ctrl]-[S] brings you back up to [Level 1] -> [Level 2]?

The reason being, is that sometimes I want to reduce power to my shields so that I have more power flowing to my guns, but then later I want to bring my shields back up to full strength while I fight. But, it seems like the only way to do this is to bring my shields completely down. Is that right? No way to do the reverse?

You're close. Use Shift with S key to switch UP shields level.

OMG, yes, thank you!!! That makes a huge difference in the way I play. Now I can shift my lv. 3 shields down to lv. 2 and back up to lv. 3 to have a constant stream of bullets flying while my shields recharge.