Energy Efficiency

Tom Konrad LED lights on an outdoor tree. Photo by author This is the third article in my series based on my panel of green money managers’ predictions for 2013.  The first article looked at what they expect 2013 holds for the Solar industry, and the second looked at their predictions  for the Smart Grid.  This installment focuses on the LED industry. Jeff Cianci: Faster than Anyone Expects Jeff Cianci is Chief Investment Officer at equity investment fund Green Science Partners. Cianci says “The trend toward LED lighting for...

by Debra Fiakas CFA Appliance Recycling Centers of America (ARCI:  NYSE) is a typical small company, toiling away in seeming obscurity and struggling to get proper valuation of their success.  There is little glamour in old refrigerators and washing machines, but ARCA has figured out how to wring cash from recycling our household appliances.  In the last three fiscal years the company converted 1.6% of sales to operating cash flow. Unfortunately, things have turned a bit sour in the world of old Frigidaires and tired Maytags.  Last week ARCA reported financial results for the quarter ending September 2015.  The company suffered...

On Monday, I wrote that I wouldn't buy a house without an energy audit.  For now, I'm in the minority, but I don't expect that to last.  Each of these trends is likely to lead to more homes getting energy audits: Rising energy costs: as energy prices rise, knowing what to do to improve your home's energy efficiency will become more valuable. Weak real estate market.  Now that the boom is past us, new home builders need to put more effort into providing and advertising a quality product in order to attract buyers and stay in business. ...

Tom Konrad CFA Contrary to common belief, the greatest barrier to the adoption of clean energy is not the cost.  In many cases, cost is not a barrier at all: it's an advantage.  That's because energy efficiency measures are usually so cost-effective that they not only pay for themselves, they can often pay for the addition of flashier clean energy technologies such as solar and wind. For institutions in the Federal and MUSH (Municipalities, Universities, Schools, and Hospitals) sectors, the main barriers are lack of capital and expertise.  Lack of capital arises because such institutions traditionally consider...

Tom Konrad CFA The most efficient way to heat and cool a building just got more efficient. Geothermal heat pump diagram via Bigstock Climatemaster, a division of LSB Industries (NYSE:LXU), recently announced that their new Trilogy 40 geothermal heat pump (GHP) had been certified by the Air Conditioning, Heating, and Refrigeration Institute (AHRI) to exceed 40 Energy Efficiency Ratio (EER) under ground loop conditions. EER is the ratio of effective cooling (heat removed) to the energy used, at maximal load, and is the standard...

by Debra Fiakas CFA It is the season of lights.  Lights for Hanukkah.  Lights for Christmas.  Energy Focus (EFOI:  Nasdaq) has been having a season of lights all year.  The company reported $62.3 million in total sales of its LED lighting products in the most recently reported twelve months.  Customers included large business and industry, property owners and the military.  The oil and gas industry is an important market vertical. Energy Focus really shines for the U.S. Navy with its explosion proof LED globes in all the colors the Navy needs to provide military personnel safety...

Two months ago, I was talking to an experienced entrepreneur who was exploring business models to provide geothermal heat pumps to households.  At first blush, it seems like a great idea.  Geothermal heat pumps often have payback periods of under five years, which translates into internal rates or return in excess of 20% over the 30 year life of the system.  With plenty of room for a business to recoup its cost of capital and leave some money on the table for the consumer, it's amazing that there isn't a company in every jurisdiction already active in the market.  ...

Tom Konrad CFA In my model portfolios of ten clean energy stocks for 2013 andsix alternatives, three companies are currently delaying earnings announcements for various reasons, and at least two of the three will be restating previous results. Many investors flee the scene at the first whiff of accounting problems: All investors rely on a company’s financial statements (directly or indirectly) to value companies.  If there is  any doubt as to the accuracy of those statements, they believe it’s better to invest elsewhere. In contrast, I believe that we never have anything like an accurate picture of what is going on...

Like most conglomerates, United Technologies Corporation (UTC), (NYSE:UTX) won't be found in any of the Clean Energy indices, but its growing portfolio of clean energy businesses makes it fit well into a diversified portfolio with a clean energy tilt.  A conservative capital structure and solid earnings and cash flow, and a decades long history of constantly increasing dividends make this a company that I'm comfortable holding for the long term.   In terms of sustainability, the company has been recognized by Dow Jones as in the top 10% of the world's most sustainable companies.  Long before it became fashionable for...

by Marc Gunther.  So you remember CFLs, right? The curlicue bulbs? The time they took to go on? The harsh light? Despite their drawbacks, compact fluorescents have sold fairly well in the US. They save customers money. Utilities promoted and subsidized CFLs, particularly in California. Walmart (NYSE:WMT) pledged to sell 100 million of them. Time magazine put one on the cover. By 2012, CFLs represented 27 percent of the bulbs installed in the over 3 billion medium screw-based sockets in the United States, according to a Navigant study quoted by NRDC. Other researchers put the number lower, about 20 percent,...

Tom Konrad CFA Last year, geothermal heat pump (GHP) manufacturers introduced new heat pumps with break-through efficiency based on variable-speed compressor technology.  These manufacturers include Waterfurnace Renewable Energy  (TSX:WFI, OTC:WFIFF) and ClimateMaster, a division of LSB Industries (NYSE:LXU). Air Source and Ground Source Variable speed compressor technology was not restricted to geothermal heat pumps (also known as ground source heat pumps or geoexchange): It had first found its way into what are often considered ground source’s poor cousins: air source heat pumps (ASHP). Both types of heat pumps use a refrigeration cycle to draw heat from the outside in winter to heat...

Joel Makower If you start with the premise that many of the solutions to our global sustainability challenges require smart design and systems thinking, it doesn’t take long before you find your way to Autodesk (ADSK). The 29-year-old design software company has made a series of impressive moves into the sustainability realm over the past few years. It’s one of those largely unheralded companies creating the tools used by architects, designers, manufacturers, and most recently cleantech entrepreneurs to produce the next generation of greener, cleaner, more efficient products. Over the past year or so, I've had...

John Petersen During the fourteen years that I've lived in Switzerland, the Germans have been the world's staunchest supporters of green power and alternative energy. Their aggressive development of wind power was breathtaking, as was their warm embrace of photovoltaic power. Over the last few weeks, however, there has been an ominous change in the mainstream German media's tone as the political class finally comes to grips with the unpleasant reality that rooftop solar panels are worthless on short, grey winter days and "For weeks now, the 1.1 million solar power systems in Germany have generated almost no...

By Jeff Siegel Hannon Armstrong (NYSE:HASI), one of my top picks for 2014, just made me very happy. Yesterday, the company announced its Q2 Core Earnings of $4.7 million or $0.22 per share. On a GAAP basis, the Company recorded net income of $2.9 million. Here are some other highlights. . . Raised approximately $70 million in April, 2014 in a follow-on offering. Increased the flexibility and expanded the capacity of its existing credit facility by $200 million. Completed more than $200 million worth of transactions, including the acquisition of a $107 million portfolio of land...

Geothermal heat pumps (GHP), also know as Geoexchange, or ground-source heat pumps have been recognized by both the Environmental Protection Agency and the US Department of Energy as the most efficient and environmentally friendly way to heat and cool a building available.  The downside of GHPs has always been the large up-front cost associated with the cost of the ground loop.   With Obama promising a massive energy efficiency overhaul of federal buildings, the up-front cost is unlikely to be important so long as the expected returns on the investment are sufficient to pay for the upgrade.  Since geothermal...

Tom Konrad CFA The high upfront cost of efficient buildings (and efficiency in general) is more than offset by the significant long term rewards, as you can see from the McKinsey chart below. Despite the long term benefits, the upfront cost is often a barrier, especially to government entities in today's tight budgetary environment. Performance contracting offers them a way to square the circle between the long term budget benefits of efficient buildings and the often significant capital cost. This works by funding the capital improvement with debt secured by future energy savings. An...