Tom Konrad, CFA
One of the best things about Solar Photovoltaics (PV) is that they can be installed close to load but need not take up open space. Now public company Envision specializes on solar shading for parking lots that not only produces power, but also shade where it’s needed most.
I lived in Tucson, Arizona for two years in the early 2000s. Like everyone who lives in the desert Southwest for any length of time, I became very aware of what would happen if I left my car in an open parking lot for more than ten minutes: it would get very, very hot. Without a windscreen sunshade, you were liable to burn your hands on the steering wheel if you were not wearing gloves, but even with it, the car interior would feel like an oven. It would take 5-10 minutes of the air conditioner running at full blast just to bring the temperature down to a bearable 90° F (32C). If you don’t consider 90 degrees bearable, don’t move to Tucson, or get used to only going outdoors before the sun is up, at least in the summer.
Needless to say, Tuscon residents become adept at spotting one bit of shade in a parking lot from a scraggly mesquite or palo verde. These spots of shade are at a premium because such desert trees are small and usually only cast enough shade for a single parking spot at most.
When it comes to solar, I much prefer developers to solar manufacturers. Solar manufacturers face the prospect of ever declining prices for their product and a constant need for technological innovation to keep up in a fierce competitive landscape. Solar project developers, on the other hand, have strong public support and interest in their product, combined with rising prices for the electricity they sell and declining prices for the solar panels they buy. They also have much lower fixed costs, meaning that while the threat of new entrants will keep them from ever becoming wildly profitable, they also do not have huge capital investments that can lock them in if building solar installations becomes unprofitable.
The low barriers to entry for solar developers mean that strong product differentiation is valuable.
Envision has developed parking lot structures they call “Solar Trees” for attractively shading parking lots while producing solar electricity. The company promotes their products as “addressing the unused millions of acres of parking spaces.” I there’s actually more too it than that, because in the sunnier parts of the country, there is value in both the electricity and in the shade. In an extremely sunny city such as Tucson, Phoenix, or Las Vegas, I would expect that most shoppers would be more interested in visiting a store where they expected to get a shaded parking space, since almost all shady parking spaces in Tucson are almost always already taken.
The idea of solar on parking lot shades is not a new one. I remember seeing one in the parking lot of an Austin Library Branch in 2000. But earlier parking lot solar arrays were bespoke designs created anew for each individual project. With a small number of flexible designs, Envision can not only keep engineering costs down, but also talk with some credibility about the cost and performance of previous arrays they have installed over nine MW of projects for clients such as Dell. They’ve also teamed up with Bright Automotive to combine the solar parking structures (which require electric service) with electric vehicle charging stations. Along with the ready-to-build, relatively attractive designs, partners and previous clients like these could establish Envision as the go-to firm for parking lot solar.
I usually like to wait a year or two for a newly listed company to develop a track record as a public company to help me assess the company’s financial strength and management effectiveness. Envision has not yet begun publishing financial statements as the newly merged entity. I took a few minutes to look over their electronic investor kit, in the hope of finding some hard numbers. Unfortunately, all the kit contains is an investor presentation without any hard numbers as to assets, revenues, debt, and income. Until such information is available, I can’t say if the stock is worth $0.04, $0.365 (the price it closed at on May 3), or $3.65.
It’s an interesting company, and I’ll probably take another look at it when there is more to go on. For now, the stock is a pig in a poke.
DISCLOSURE: No position.
DISCLAIMER: The information and trades provided here are for informational purposes only and are not a solicitation to buy or sell any of these securities. Investing involves substantial risk and you should evaluate your own risk levels before you make any investment. Past results are not an indication of future performance. Please take the time to read the full disclaimer here.