Monthly Archives: June 2011

The PV Module Supply Glut

Tom Konrad CFA With project financing and plenty of photovoltaic (PV) modules, a shortage of projects with credible off-takers seems likely to lead to further falls in module prices.  How can investors best profit from this trend? PV module prices have dropped 70% since 2008, when the financial crisis sent demand tumbling, with Chinese multicrystalline silicon module prices currently as low as $1.49 per watt, according to Bloomberg New Energy Finance's (BNEF) Solar Spot Survey.  In part, this was an example of “the Bubble giveth, and the Bubble taketh away.” For the three to four years ending in 2008,...

Johnson Controls Forecasts Enormous Stop-Start Growth

John Petersen On June 27th Johnson Controls (JCI) hosted their 2011 Power Solutions Analyst Day and unveiled their expectations for the future of stop-start idle elimination systems. After noting that all automakers are developing a range of powertrains, JCI used this graph to emphasize their view that the overwhelming bulk of alternative powertrain vehicles over the next five years will have simple, cost effective and fuel efficient stop-start systems. You don't see much about stop-start systems in the mainstream media because politicians and reporters are too enchanted with plug-in vehicles and other exotica...

Will Crystalline Solar Kill Thin Film?

A Conversation with Applied Material’s Solar Head Charlie Gay by Neal Dikeman I had a chance to chat today with Dr. Charlie Gay, the President of Applied Materials' (AMAT) solar division.  You may recall, we broke the story in the blogosphere 5 years ago about Applied’s entry into solar, which was anchored with a highly touted and very aggressive strategy for turnkey large format amorphous silicon and tandem cell plants called SunFab. Charlie reminded me that when they began 5 years ago, they did so along two major thrusts:  The acquisition of Applied Films in...

Is Energy Sourcing the Gateway Drug to Energy Efficiency?

Tom Konrad CFA I recently interviewed Richard Domaleski, CEO of World Energy Solutions (NASD:XWES).  World Energy is a comprehensive energy management services firm whose core offering is extremely price competitive energy sourcing (that is, finding an energy provider to supply all of a client's energy needs at the lowest possible cost.)  They achieve competitive sourcing using an electronic energy exchange designed to achieve much better price discovery in what is traditionally a very opaque market.  According to Domaleski, a recent KEMA study showed that only 7% of large commercial, industrial, and government customers are sourcing their...

The Alternative Energy Fallacy

John Petersen In 2009, the world produced some 13.2 billion metric tons of hydrocarbons, or about 4,200 pounds for every man, woman and child on the planet. Burning those hydrocarbons poured roughly 31.3 billion metric tons of CO2 into our atmosphere. The basic premise of alternative energy is that widespread deployments of wind turbines, solar panels and electric vehicles will slash hydrocarbon consumption, reduce CO2 emissions and give us a cleaner, greener and healthier planet. That premise, however, is fatally flawed because our planet cannot produce enough non-ferrous industrial metals to make a meaningful difference and the prices...

Wind Fall

Debra Fiakas Angela Merkel’s coalition government may not have looked at the nuclear power question for anything more than a “cover your behind” solution.  Nonetheless, the wind industry sees last month’s decision to phase out Germany’s nuclear power generation industry by 2022 as  -  no pun intended  -  a windfall.  Policy makers say as much as half of the deficit left by the shutdown of nuclear power plants will need to be made up from other power sources, principally wind power. This is no small undertaking.  A total of 21,607 wind turbines with an overall...

A Guide to Geothermal Heat Pump (GHP) Investing, Part II

Chris Williams In the previous post on understanding the geothermal heat pump industry, we addressed (1) what’s driving the growth in the GHP industry, (2) the advantages of GHPs and (3) what market segments are adopting the technology the fastest. In this article we will continue the discussion and address:  4. The bottleneck’s to GHP continued and faster growth 5. Possible Investment targets within GHP 6. The 2 best opportunities for investment in public equities. 4. Bottlenecks: There are two major things holding back the GHP industry. 1. Technical knowledge. IGSHPA, The International Ground Source...

A Guide to Geothermal Heat Pump (GHP) Investing, Part I

Chris Williams According to the Solar Energy Industry Association (SEIA), in 2010 solar was the fastest growing industry in the US, growing at 67%. The geothermal heat pump (GHP) industry still grew quickly compared to the whole economy, but it only grew at a modest 32% compared to solar. According to Solar Buzz, at the end of 2009, the global solar market was $38.5 billion with the US installing nearly 8% solar, or $3.1 billion of the world market. Source: Solarbuzz 2010 Marketbuzz According to PMGO, an industry research firm, “The total...

Investors Sweet on Second-Gen Biofuel IPOs But Caveats Remain

by Ivan Castano Second-generation biofuel IPOs are all the rage this year with recent deals pricing well above initial expectations and a growing number of companies expected to tap the capital markets in coming months. But analysts caution some of these companies will have a hard time wooing investor interest unless they become more transparent about their accounts and future path to profitability. "None of these companies will be earning much any time soon so investors want to see clarity and visibility about the enterprise story behind the companies," says Stacey Hudson, an analyst with Raymond...

Wall Street’s Irrational, Dangerous Hatred of Solar Stocks

Garvin Jabusch For most of 2011, the stocks of solar power companies of all kinds, from providers of raw polysilicon to developers of finished utility scale plants, have been taking a beating on world and U.S. stock markets, partly because solar has been the industry most singled out for attack by bearish short sellers. I can’t describe this phenomenon any better than did Roberto Pedone in a recent column for thestreet.com: Besides the banking sector post-2008 financial crisis, I can't think of a group that's as hated and despised as solar stocks…For whatever reason, this entire complex...

Maxwell Stakes its Claim in a $2.7 Billion Niche Market

John Petersen Last Wednesday Maxwell Technologies (MXWL) announced the launch of a new ultracapacitor product that insures reliable engine starting for commercial trucks and other heavy vehicles. According to the Energy Information Administration, the existing US fleet includes 4.2 million heavy-duty diesel trucks. All of these vehicles are subject to strict anti-idling laws and regulations that strain their battery systems and increase the risk that the engine won't be able to start when it needs to. While a dead battery is a pain for the average consumer, it can cause a world of problems for a commercial truck...

Ten Clean Energy Stocks I’d Buy Now

Tom Konrad CFA Buying opportunities return to clean energy. Two years ago I had a problem.  In the universe of clean energy stocks I watch, I could not find any that I thought were good values.  So I wrote an article saying "We're near the peak." If you had been comparing that call to the performance of the broad stock market since then, you would have to conclude that I was ludicrously wrong.  The S&P 500 is up 40% since then. If on the other hand, you'd been watching clean energy stocks, you would...

An Elephant Hunter Explains Inflection Point Investing

John Petersen In "An Elephant Hunter Explains Market Dynamics" I discussed the two basic types of public companies; earnings-driven companies that are “bought” in top-tier weighing machine markets and event-driven companies that are “sold” in lower-tier voting machine markets. Today I'll get a bit more granular and show how "sold" companies usually fall into one of two discrete sub-classes that have a major impact on their stock market valuations. As a starting point, I'll ignore the China-based companies that are listed in the US because their quirky metrics would only confuse the analysis. Then I'll break...

Questions About Dividend Spook New Flyer Investors. Why I’m Buying

Tom Konrad CFA If I could only own one stock, it would not be a stock.  It would be a Canadian "income deposit security:" New Flyer Industries which trades in Toronto as NFI-UN.TO and on the Pink sheets as NFYIF.PK. Cyclical industry New Flyer is the largest of the five suppliers of heavy duty transit buses in North America.  Unlike its competitors, New Flyer is focused solely on transit bus sales, parts, and service.  The company has industry leading technology, offering a full range of bus styles and propulsion systems, including  diesel, liquid or compressed natural...

Is the Solar Installation Industry Ripe for Consolidation?

Tom Konrad CFA Solar installation is a low margin business with low barriers to entry, but consolidation may bring competitive advantages in some sectors of the market. I recently took a look at Principal Solar (PSWW.PK), a reverse-merger solar developer roll-up play, and found it remarkably lacking in hard data.  But there are a handful of other publicly traded pure-play solar installer/developers, as well as vertically integrated solar manufacturers like First Solar Inc (FSLR) which have been developing projects with their own panels, and solar developer-operators like Etrion Corp. (ETRXF.PK). The Shape of the Solar Installation...

Saudi Arabia to Become the Saudi Arabia of Solar Electricity

by Garvin Jabusch A couple days ago Bloomberg reported the following: "Saudi Arabia plans to generate solar electricity equaling the amount of its energy from crude exports, Oil Minister Ali Al-Naimi said." Wait, what? That sounds like a ridiculous quantity of solar electricity. The article doesn't say quantitatively how much energy that is, so I did a quick check. Saudi Arabia exports about 2.7 billion barrels of oil per year, each containing the equivalent of 1,700 Kilowatt hours of electricity for a total of 4.59 × 1012 KwH per year, or the equal of about one quarter or the...