Monthly Archives: July 2015

Underpriced JA Solar Becomes More Undervalued

by Shawn Kravetz In the second quarter, solar stocks were impacted by broad energy sector declines on global macroeconomic concerns (most notably Greece and China). This negative sentiment has continued unabated into July exacerbating the disconnect between fundamentals and perceptions. JA Solar (NYSE: JASO) epitomizes this dislocation. We at Esplanade Capital Electron Partners (ECEP) owned JA Solar prior to June 5, believing the company to be worth ~30%+ more than the share price. On June 5, JA Solar received a takeover offer from its Chairman/CEO and parent company at a 20% premium....

GE’s Energy Storage Restart

by Debra Fiakas CFA A few years ago General Electric (GE:  NYSE) built out a manufacturing facility in Schenectady, New York for its sodium-ion batteries.  CEO Jeff Immelt declared the company a contender in the energy storage industry.  He projected that the company could ring up $500 million in annual sales by 2016, and build to $1 billion a year by 2020 by providing energy storage to utility-scale alternative energy projects.  Reality has been a bit different than Immelt's vision.  GE ended up shuttering the plant in the Fall 2014, and all but fifty employees were...

SunEdison Spinning Yieldcos

by Debra Fiakas CFA Two weeks ago TerraForm Global, Inc. filed yet another amendment to its S-1 registration statement as the SunEdison, Inc. (SUNE:  NYSE) spinout grinds forward with its initial public offering.  TerraForm is a collection of SunEdison’s renewable energy properties, primarily its solar, wind and hydro-electric power generation facilities around the world.  The current portfolio sums up to over 1,400 megawatts in total generating capacity, of which over 900 are spoken for through power purchase commitments that cover the next 19 years.    On a pro forma basis, the assets produced $298.9 million in total revenue, providing...

NRG Wants To Charge Your Car

by Debra Fiakas CFA New Jersey-based NRG Energy, Inc. (NRG:  NYSE)  NRG serves about 2.8 million customers in the northeastern U.S. with electricity generated from a mix of conventional and renewable power sources  - 95 fossil fuel and nuclear power plants, 14 utility-scale solar power plants, and 35 wind farms.  It has been good business for NRG, raking in $16.2 billion in total sales in the twelve months ending March 2015.  NRG converted $1.4 billion of those sales to operating cash.  That helps support a dividend payout policy that will put $0.58 per share in holders’ pockets next...

Plugging Into Car Charging Stocks

by Debra Fiakas CFA Earlier this week, the quieter half of Tesla Motors (TSLA:  Nasdaq) founding team and the company’s chief technology officer, JB Straubel gave a speech at a solar energy conference in San Francisco.  He is largely responsible for Tesla’s innovative battery technology, so it should be no surprise that he thinks that eventually all vehicles will be powered by batteries.  As profound a this view might seem, let’s remember that if hammers could see, the world would look like a nail. Nonetheless, I thought it worthwhile to take Straubel at this word.  This is...

Hanery Shares To Remain Suspended During Manipulation Probe

Doug Young  Bottom line: Hanergy shares will remain forcibly suspended until the Hong Kong securities regulator completes its investigation into price manipulation, and could ultimately return to China where oversight is far less strict. I had to smile when I read the latest reports that said the Hong Kong securities regulator has taken the unusual step of ordering a continued suspension of shares of solar power equipment maker Hanergy (HKEx: 566), as it continues a probe into stock price manipulation. My smile wasn’t due to the continued suspension, but rather to the reason that media reports gave for the...

Moving Microgrids Beyond R&D

by Joe McCabe Where is the money in microgrids? My goal at this years Intersolar event was to try and answer this question; to figure out the value proposition of microgrids as they relate to distributed generation, storage, renewable energy and photovoltaics.  A microgrid is an electrical supply and use system that can operate autonomously. Although all microgrids are small relative to the electric grid as a whole, the huge size of the grid leaves a broad range of what can count as “micro.”  Microgrids can be as small as a single building, but range on...

PowerSecure on a Solar Roll

by Debra Fiakas CFA Last week PowerSecure International (POWR:  Nasdaq) announced the award of orders valued at $100 million for new solar projects.  About 15% of the work will be completed in the final quarter of this year and the rest of the revenue will be recorded in 2016.  The announcement sent investors into a tizzy.  PowerSecure reported $283.4 million in total sales for the twelve months ending March 2015, primarily for solar power infrastructure and smart grid technology destined for electric utilities and microgrids.  Securing orders equivalent to 35% of its current revenue run rate...

Recent Green Bonds: Toyota Hybrids, SunRun, Efficient Homes and Data Centers

by the Climate Bonds Team Last month Toyota closed their second green bond for a whopping $1.25bn. Standard auto loans backed the issuance with proceeds to be used for electric and hybrid car loans; that means it’s more like a corporate green bond, where proceeds from a bond backed by existing (non-green) assets are directed green loans still to be made. Sunrun issued $111m of solar ABS, and a small unlabelled energy efficiency ABS was also issued by Renew Financial and Citi for $12.58m. Sunrun and Citi/Renew Financial are examples of ABS where the assets backing the issuance...

CAFD: Don’t Let The Joke Be On You

Tom Konrad CFA Sunpower and First Solar are indulging in nerd jokes.  Their YieldCo, called 8point3 Energy Partners had its initial public offering on June 19th. The name is an astronomy nerd joke and a reference to the time it takes the sun's rays to reach the Earth, 8.3 minutes. Last week, we found out that its ticker symbol is CAFD, a "financial nerd joke" because it stands for "cash available for distribution."  CAFD is an important YieldCo metric, but it's not a perfect one. If you're not a financial nerd but are interested in...

2017 Electric Car Investment Guide

By Jeff Siegel The car world is obsessed with Tesla (NASDAQ: TSLA)... And for good reason. After all, in the world of vehicle design and alternative fuels, no one has taken this disruptive technology further than Elon Musk and Tesla Motors. The days of glorified golf carts are long gone. And although few can actually afford an $80,000 Model S, Tesla isn’t the only game in town. In fact, Nissan (OTCBB: NSANY), which makes the all-electric LEAF, recently announced that after four years, its alliance with Renault has officially sold 250,000 electric cars. That may not sound like...

How Much Can YieldCo Dividends Grow?

Tom Konrad CFA U.S.-listed YieldCos seem to offer the best of two worlds: high income from dividends, combined with high dividend per share growth. YieldCos are listed companies that own clean energy assets, and like the real estate investment trusts (REITs) and master limited partnerships (MLPs) they are modeled after, they return almost all the income from their investments to their shareholders in the form of dividends. Unlike REITs and MLPs, however, U.S.-listed YieldCos have management targets to deliver double-digit per-share dividend growth. YieldCos shown are NRG Yield (NYLD), Abengoa Yield (ABY), TerraForm Power...

Are YieldCos Overpaying for Their Assets?

Tom Konrad CFA YieldCos buy and own clean energy projects with the intent of using the resulting cash flows to pay a high dividend to their investors.  Several such companies, often captive subsidiaries of listed project developers, have listed on U.S. markets since 2013. So far, YieldCos have been a win-win: The developers that list YieldCos have gained access to inexpensive capital, and income investors have gotten access to a new asset class paying stable and growing dividends.  So far, they have also gained from significant stock price appreciation. The seven U.S.-listed YieldCos are up...

Where Are The Cellulosic Ethanol Gallons?

Jim Lane  We've seen a number of high-profile cellulosic projects open in recent years, and not much ethanol being produced? Wondered why? Here are answers to your questions. As Jack Webb used to say on Dragnet, just the facts, ma’am. Fact one. There’s not much ethanol being produced at the new generation of cellulosic projects. Fact two. We have seen significant changes in senior leadership at a number of key developers. Industry rumor going around: Psst! These facts are linked! For sure, Dorio Giordano has been appointed CEO at Beta Renewables, Dan Cummings has been...

Brew-ha-ha: Is Amyris’ Brazillian JV Over?

Jim Lane In a Brazilian securities filing, with respect to the Joint Venture between São Martinho and Amyris (AMRS), Sao Martinho reports “the non-achievement of certain contractual targets by Amyris, impacting the viability of the project. Thus, Sao Martinho decides not to approve the continuation of the Joint Venture Plant construction with the US company Amyris Inc. and its Brazilian subsidiary Amyris Brazil Ltda.” The company did not elaborate as to which contractural targets were not achieved by Amyris. In the filing, Sao Martinho added: “Amyris may provide new information regarding the project feasibility in...

Blue Sphere’s First Revenue

by Debra Fiakas CFA Blue Sphere (BLSP:  OTC) is continuing to make progress in its strategic plans to build and operate biogas power plants.  The company is initially targeting the largely untapped supply of organic wastes from food processing and table to meet growing demand for renewable, no– or low-carbon emission energy sources.  A year ago, the company’s portfolio consisted of a string of projects all in the planning stage.  Management has pushed two food waste-to-energy projects in the U.S.to the construction stage and closed on the first four acquisitions of fully operational agriculture-waste biogas power plants in...