As an expert witness in an energy efficiency ("Demand Side Management" or DSM in utility-speak) docket before the Colorado Public Utilities Commission, I have been making the case that non-energy benefits of energy efficiency measures such as the increased safety and comfort of an efficiently operating home need to be included in evaluating the cost-effectiveness of energy efficiency programs.  There has been much resistance to the inclusion of these benefits, mainly because they can be difficult to quantify.  Yet we omit them at our peril.

Why Energy Efficiency and Health Matter

    Last summer, I explored why the economic benefits of energy efficiency measures had little relation to their actual market acceptance.  I concluded that businesses need strategies beyond touting financial savings to overcome barriers to acceptance.  One strategy I highlighted was making energy efficiency measures an emblem of social status (something I believe is behind the success of the Toyota Prius.)

    In this docket, I have been working with the Energy Efficiency Business Coalition, which brings together manufacturers, distributors, and Retail providers of energy efficiency products and services in order to support energy efficiency-friendly legislation and regulation.  For those who sell to the retail public, their primary messages have little to do with either financial rewards or social status.  Their marketing emphasizes the increased health, safety, and comfort of energy efficient homes.

    A home with properly sealed ducts will not only use much less energy, but it will not pull toxins from the garage or crawlspace into the living area of the home.  Properly functioning furnaces and water heaters save energy, but they also do not emit carbon monoxide.  A well insulated house lacks hot and cold spots, allowing the occupants to be comfortable everywhere in the home.  

    All of these facts are effective marketing tools for energy efficiency.  They're so effective, that a Google search for "insulation comfort" returns 597,000 hits, of which the first six are companies with something to sell.  In contrast, a search for "insulation savings" returns a slightly lower 540,000 hits, but of the first 10, only one (#6) has anything to sell.  The rest are information sites from government, nonprofits, or for DIY'ers.  

Survival of The Fittest (In Competitive Markets Only)

    Those businesses which stay in business by successfully selling insulation do so by selling the comfort benefits, not the energy savings.  The energy savings are instead pushed by organizations (such as government) which will remain in business regardless of who buys what they are selling.  

    I find it quite telling that Xcel Energy (NYSE:XEL), the utility we have been dealing with in the DSM docket, markets their energy efficiency programs almost entirely on financial savings.  But then, Xcel is not going to go out of business if they don't sell as much energy efficiency as possible: their main business is selling energy, not energy savings.  I don't mean this as a condemnation of Xcel; the company is quite progressive, as public utilities go.

    Because public utilities are regulated, it falls on the regulator to ensure that the utilities incentive includes those factors which will actually increase the adoption of energy efficiency.  Normal businesses have found that the factors to emphasize are non energy benefits such as comfort, health, and safety.  These factors are out of favor in regulatory circles, because they are difficult to value in dollars and cents.  

    Difficult to value does not mean without value.  People buy things they value, and when it comes to home energy efficiency, they are buying health and comfort, with a dash of energy savings... not the other way around.  DSM programs which take this into account are likely to be much more successful than those which do not.

    Regulators take note.

Continue reading "Money and Reduced Emissions Don't Sell Energy Efficiency, but Comfort and Health Do" »

Posted by Tom Konrad at 04:05 PM | Permalink | Comments (0)

Over the weekend, EnergyTechStocks published two articles based on an interview with me.

The first was about my conviction that Peak Oil induced rising gas prices is going to lead to a rush into mass transit building by cities, or investing in mode-shifting last September.  I've since written about opportunities in rail transit stocks, (P.TO, TRN, PRPX, and WAB), and more recently Hedging your peak oil risk with your lifestyle.  However, I have been frustrated until now that the only pure play bus stock I've been able to find is Firstgroup PLC (FGP.L, FGROF.PK), the British based owner of Greyhound and owner or operator of many other UK and North American transit services (both bus and rail.)  Back in September, Firstgroup seemed very expensive after a prolonged run-up, but it is now looking more reasonably valued.

Two weeks ago, however, I found a pure-play North American Bus stock, which I will be writing about this weekend.  I'm not ready to reveal the name, because I still have an account which has not yet bought the stock.  This is the company I was not ready to reveal in the EnergyTechStocks interview.

The second part of the interview referred to my conviction that lean economic times will benefit Energy Efficiency over other forms of clean energy.  I highlighted two of the stocks from the 10 Solid Clean Energy Companies to Buy in a Downturn series.

DISCLOSURE: Tom Konrad and/or his clients have long positions in TRN, PRPX, WAB.

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.

Posted by Tom Konrad at 01:59 PM | Permalink | Comments (0) | TrackBacks (0)

Johnson Controls (NYSE:JCI) has long been one of my favorite energy efficiency picks, with an added bonus coming from their joint venture with Saft to produce batteries for hybrid and electric vehicles.  They have also shown some energy saving innovation making parts for auto interiors.

Building Efficiency

Efficient buildings are much more complex than simply replacing inefficient HVAC and lighting with more efficient versions.  Quite often, the most cost effective measures come from using systems more efficiently.  As an analogy to the home, look at any list of quick tips for energy saving around the home.  This list of ten steps on Squidoo includes five tips for using existing equipment more wisely (programming your thermostat, cleaning air filters, loading your dishwasher fully, and only using the dryer when you can't air-dry.) Considering Squidoo is quite clearly trying to make money by referring people to Amazon to buy products, it's all the more significant that half of the steps need not involve buying anything.

In commercial and industrial buildings, the most economical gains also involve using existing equipment more wisely.  They offer a full suite of products focused on automation and integration to businesses and residential (with the recent York acquisition) customers alike. 

Building efficiency systems comprise about one third of 2007 revenues.

Batteries and Automotive Power Systems

Johnson Controls' joint venture with Saft has been making headlines recently, no doubt in large part due to Johnson Controls automotive industry network.  The partnership has won contracts to supply batteries to Chinese auto manufacturers Chery and SIAC for their Hybrid electric vehicles, and a battery development contract from GM to develop Li-ion batteries for GM's Saturn Vue Green Line Plug-in Hybrid.

I'm extremely enthusiastic about the growth prospects of the automotive battery industry, the reasons for which I detailed in this article about another battery company, and this one about the long term prospects for cellulosic biofuels.  The power systems division comprises about one third of 2007 revenues.

JCI also supplies automotive battery management systems and power systems, with a focus on energy savings, as part of their automotive division described below.

Auto interiors

Energy savings can come from unexpected places... like car seats.  Johnson Controls' EcoClimate seat provides much higher heat absorption and moisture absorption than conventional seating, which in turn provides for passenger comfort with less use of the vehicle's air conditioner.  New bio based materials may also appeal to automotive consumers concerned about environmental health effects and fossil fuel usage.  About half of JCI's 2007 sales were in this division, but most of the company's growth comes from the other two divisions.

Conclusions

With half of the companies 2007 revenues coming from two of my favorite alternative energy sectors (efficient buildings and automotive batteries), and these parts of the company growing much more rapidly than the auto parts division (which is likely to be a great competitive advantage in selling batteries and power systems to automakers,) JCI is a must for alternative energy investors attracted by the superior economics of energy efficiency.  

The stock has declined significantly since the start of the year, but it currently seems only fairly valued to me at the current price of around $34.  However, a decline in auto sales caused by a slowing economy, along with an increased debt burden due to recent acquisitions could easily hurt short-term profits.  With continued stock market weakness, patient investors could easily see some excellent buying opportunities in the next 6-12 months.  If we do, I will be buying more.

Click here for other articles in this series.

DISCLOSURE: Tom Konrad and/or his clients have long positions in JCI.

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.

Posted by Tom Konrad at 04:18 PM | Permalink | Comments (0) | TrackBacks (0)

In the future, I plan to avoid doing lists of ten stocks. I've found the writing to be somewhat repetitious, and I suspect some readers feel the same way.  Look for more threes and fives.

That said, there are more than enough solid companies with strong clean energy arms.  These companies are my favorite investments right now, both because I think that now is a time to play it very safe in the stock market (I'm also increasing my cash reserve), and because these companies allow me to use Cash Covered Puts.

Since I do have several companies I nearly put in this list (I've been deciding which ones to write about as I go along... the list order doesn't mean much of anything.) I thought I'd share those with readers, but without extensive discussion of the pros and cons.  Also in no particular order:

General Cable (NYSE: BGC)

This was another transmission pick, but I chose not to include it because the I had two other transmission picks. Here are other articles where I mention it: Electric Transmission, Blue Chip Stocks, Transmission and Clean Transport.

Greenbrier (NYSE: GBX)

This is another rail pick.  I've also mentioned it here, and the price has fallen considerably since then, making it more attractive.

Owens Corning (NYSE: OC)

Another energy efficiency pick, this stock has been badly hurt by the housing bust.  I'm having trouble figuring out what a "good" price for this one is, so I decided to leave it out of the series.  I've also written about it as an Energy Star Summit pick, an efficient housing play, and as one of my  Blue Chip Stocks.

Honeywell International (NYSE: HON)

This stock didn't make it onto the list because I have not been following it.  Honeywell has historically looked rather expensive to me, although it seems to be getting cheaper.  I've mentioned it as a Performance Contracting stock, as an Energy Star Summit pick, and as one of my  Blue Chip Stocks.

Click here for other articles in this series.

REMINDER: I'm still collecting suggestions for companies to write about in a (shorter) series of articles which will appear in March.  I plan to select the companies from all suggestions submitted with a poll next week.

DISCLOSURE: Tom Konrad and/or his clients have long positions in BGC, GBX, and OC.

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.

Posted by Tom Konrad at 04:15 PM | Permalink | Comments (0) | TrackBacks (0)

I don't write frequently about solar stocks, especially photovoltaic (PV) manufacturers.  While the industry is almost certain to be a spectacular growth story, it's also a story that everyone already seems to know about.  Trader Mark put it well: "these stocks are too driven by retail hands."  The PV story clicks with people, and when that happens, they often buy stocks with little regard to what they are worth.  PV stocks are so psychological, we'd all do well to lie down on a couch before buying.

As the IRS is unlikely to allow psychotherapy as an "investing expense," I have looked to other, less popular sectors of renewable energy, and to energy efficiency in this series.  I sidestep the issue by investing in conglomerates and related industries such as electricity transmission and distribution, or agriculture which are less exciting, but will benefit from the same trends.  That is why I'm halfway through this series, and only now talking about the most popular form of renewable energy, solar photovoltaics.

Since Sharp (SHCAY (ADR), TSE:6753) is a conglomerate, its PV manufacturing is often overlooked by solar investors, despite the fact that it's the world's largest manufacturer of solar cells (according to Sharp, independent industry statistics are hard to come by.)  Admittedly, PV accounts for considerably less than 10% of their sales: PV falls under "other Electronic components" in their sales breakdown, and that category was only 9.6% of total sales in 2007.  In the last nine months of 2007, solar sales declined, most likely due to limited supplies of crystalline silicon.  They have taken steps to assure future crystalline silicon supplies, and are aggressively expanding their thin film production.

Thin Film Solar

Sharp is also rapidly expanding their production of amorphous Silicon (a-Si) thin film PV.  I find this particularly interesting, because unlike the other thin film technologies, there is no practical limitation on the quantity of a-Si production due to raw materials, unlike the non-silicon CIGS and CdTe technologies.  (You can read my discussion of the impact of possibly limited Tellurium supplies on First Solar (Nasdaq:FSLR) here by scrolling down to the bottom of the linked page.)

While some a-Si manufacturers have given the technology a reputation for low quality, many manufacturers produce high quality panels.  Amorphous Silicon, like other thin film technologies, tends to have a lower conversion efficiency than traditional crystalline silicon modules, but I was surprised to hear in Sharp's New Year Address that because their thin film more thermally robust in hot climates, their thin film panels actually operate at higher efficiency than their crystalline silicon panels in places like Spain.  For this reason, they are targeting large scale PV installations in Southern Europe with their thin film modules, while their crystalline PV modules are targeted at smaller installations in cooler areas.  I had previously thought that thin film was primarily useful for the same things as conventional PV, and also for Building Integrated Photovoltaics (BIPV.)  I had not expected thin film to have higher efficiency in any context.

Energy Efficiency

PV is less than 10% of Sharp's business, but many of their other products should also be of interest to Alternative Energy investors.  Japan is one of the most environmentally and socially aware countries, and as someone more accustomed to listening to investor presentations from North American companies, Sharp's presentations are a culture shock.  Profit numbers play second fiddle to environmental and social responsibility, the reverse of what I'm normally used to.  

Most of Sharp's other products are already familiar.  They include LCD screens and other components for a wide variety devices, as well as televisions and information equipment.  This is where the company's environmental awareness pays off, with Sharp's LCD televisions often near or at the top of energy saving rankings.  This is in contrast to Philips, which is profiled in this series for their efficient lighting business, not for their televisions.

Historically, United States government ratings only accounted for energy use of televisions in standby mode, a problem which will soon be rectified.  As of November 2008, Energy Star 3.0 specifications (see chart) will come into effect in the United States which will also take into account energy use when the television is on, and will make it easier for consumers to compare the true energy usage of televisions.  This should benefit energy-conscious Sharp relative to competitors, and LCDs relative to Plasma displays.

Perhaps even more than Europeans, the Japanese have been thinking about energy for a long time (no doubt in large part because they have to import most of it and therefore pay more for it than North Americans.)  Since most North Americans are only now waking up to the need to save energy, a Japanese company which has long known how to please energy-conscious consumers should be able to use those skills as more consumers become aware of the life-cycle costs of their electronic purchases.

Since a large portion of Sharp's revenues come from consumer products, lower consumer spending and a possible recession in the United States could easily lead to a sharp drop in the stock price.  If that happens, clean energy investors should take that opportunity to acquire one of the world's top solar and energy efficiency companies on the cheap.

Click here for other articles in this series.

DISCLOSURE: Tom Konrad and/or his clients have long positions in SHCAY.

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.

Posted by Tom Konrad at 11:21 PM | Permalink | Comments (1) | TrackBacks (0)

Readers of this blog are well aware that I'm a fan for energy efficiency in general and efficient lighting in particular as good investments as more and more people and companies reduce their energy use in order to lower costs and green their image.  With the exception of niche players such as Cree and Lighting Science, efficient lighting is dominated by General Electric (GE), Osram Sylvania (a division of Siemens (SI)), and Koninklijke Philips (PHG.)   I'm a fan of all three of these companies, and both GE and Siemens are honorable mentions in this series.

While Siemens and GE are broad industrial conglomerates, smaller Philips is comparatively focused on electronics, with lighting being one of just four divisions.  Last June, I told readers about my hunch that Philips was "the most serious [of the] lighting manufacturers about pursuing LEDs."  That hunch was quickly confirmed when Philips' announced the acquisition of LED company Color Kinetics a couple weeks later.  That acquisition was followed in November by Philips' announced acquisition of Genlyte, with the apparent intention of using this lighting fixture manufacturer to increase their US market penetration.

These two acquisitions allowed the much smaller Philips (market cap $42B) to surpass the more diversified GE ($363B market cap) as the leading lighting manufacturer in both North America and the world as a whole.  For investors who worry that a possible US recession might turn consumers' and companies' attention away from clean energy, energy efficient lighting is the perfect choice in a more budget conscious green era.  Commercial lighting retrofits often have payback periods of less than a year, and so are likely to appeal to companies seeking to reduce costs.

Philips' other businesses include medical devices and consumer products.  Not much about them seems particularly green, although they recently announced an LED-backlit "Eco-TV," which may appeal to the green aspiring couch potato.  It received faint praise from the green technorati, since a big new TV (even a relatively energy efficient one) is likely to be a lot more wasteful than the smaller TV you already have.  On the other hand, the Eco-TV may be the start of a strategy within Philips to leverage their lighting expertise to their consumer electronics business.

In any case, the lighting business is worth having in your portfolio, especially if a market collapse provides an opportunity to buy it on the cheap.

Click here for other articles in this series.

DISCLOSURE: Tom Konrad and/or his clients have long positions in PHG, GE, SI.

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.

Posted by Tom Konrad at 12:05 PM | Permalink | Comments (0) | TrackBacks (0)

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 companies to greenwash by reducing their environmental impacts, UTC pledged in 1996 to reduce their power and water usage by 25%, and they have met these goals while growing their business.  Their long track record of reducing their energy usage gives them a significant head start against rivals who have only recently jumped on the climate change bandwagon.

Of the company's eight major business units,  UTC Power and Carrier are both crucial to how we generate electricity and how we use it.  Carrier has a history of pushing for more stringent energy efficiency and environmental standards for air conditioning, a strategy which helps their business strategy since UTC's scale and research allow them to remain on the technological forefront.

UTC Power has a large portfolio of products which will help modernize our energy infrastructure.  They supply microturbines and Solid Oxide fuel cells, as well as integrated combined cooling, heating, and power products, which I feel are likely to become much more popular as more companies seek ways to lessen their environmental impact and energy bills at the same time.

With their PureCycle binary cycle turbine, UTC introduced the benefits of volume production to geothermal power by making slight modifications to an existing line of Carrier's industrial chillers which allow them to operate in reverse.  Raser Technologies (RZ) plans to use this technology in their aggressive plans to develop a large number of lower temperature geothermal resources throughout the Southwest.  According to a personal conversation I had with a Raser employee. UTC's ability to deliver the turbines quickly, and willingness to guarantee performance was key to Raser's selection of that technology in preference to rival products.

One other technology likely to be of great interest to clean energy investors is their molten salt storage technology, which provides a rare opportunity for a US-based public investor to participate in what I consider to be one of the most promising solar technologies: Concentrating Solar Thermal Power (CSP).  The thermal storage provided by molten salt gives CSP the potential to provide power on a dispatchable basis, allowing it to compete directly with expensive electricity from natural gas turbines.

Other divisions of UTC, such as the Sikorsky helicopter division, are major military suppliers, so traditional socially conscious investors may wish to avoid UTC.  On the other hand, the short supply of helicopters needed in modern warfare (as well a a large backlog in their Otis elevator division) have propelled strong earnings growth, while even relatively efficient air conditioners could not prevent Carrier from being hurt by the housing slowdown.  Such are the benefits of diversification.

At roughly $74, and a 17.3 P/E, UTX is not currently cheap.  I currently have only some out-of the money short puts on the company, but it's one that I intend to continue writing puts on until the stock falls and I'm assigned shares.

Click here for other articles in this series.

DISCLOSURE: Tom Konrad and/or his clients have long positions in UTX, RZ.

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.

Posted by Tom Konrad at 05:07 PM | Permalink | Comments (4) | TrackBacks (0)

I got a call from my broker this morning asking me if I'd be willing to loan out my shares of Cree, Inc. (NASD:CREE) to a short seller.  Since the only cost to me is that I will not be able to vote my shares, and I will earn 2.5% per annum on the value, I said "yes." 

Normally, brokerages get the shares they lend out to shorts from margin accounts with a margin balance.  Since I never carry a balance (although I do have a margin account in order to trade options) they must ask my permission and pay me interest in order to borrow my shares.  I'm planning on holding these shares for the long term, so I'm happy to earn an extra 2.5% on my money.  (I could still sell them, in which case the short seller would have to find shares to borrow from someone else, or cover his position.)

I also had the idea of creating some synthetic cash-covered short puts (a combination of the long position in the stock with short calls) to give me more shares to loan out, but the relative prices of calls and puts on Cree make this unattractive.  Most likely, other arbitrageurs who are able to earn higher interest on their loaned shares have already pursued this route to the point where it is no longer attractive to me (my return on capital would only be about 8%; I can do better with a plain-vanilla cash-covered puts.)

What to Make of the High Short Ratio?

Cree's short ratio (the ratio between the number of shares short to the company's float, or shares available for trade) is an extremely high 26.9%, and has risen over the last month.  This is why my broker was calling me to borrow shares.  But, other than my opportunity to make an incremental profit on my shares, what does this mean for the future of the stock?

On its face, a high short ratio means that a lot of investors are bearish about Cree's prospects.  This can be good or bad news, depending on how likely the shorts are to be right.  The contrarian position (and I usually lean towards the contrarian) is that most investors are usually wrong, meaning that a high short ratio is a bullish indicator.  We also know, since I'm getting calls from my broker, that few new investors will be able to short.  Finally, there is the potential of a short squeeze, which could be triggered by positive news such as another buyout rumor.  Short squeezes can lead to radical price increases over short periods.

I'm taking the call from my broker as another moderately bullish sign.

DISCLOSURE: Tom Konrad and/or his clients have long positions in CREE.

DISCLAIMER: The information and trades provided here and in the comments 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.

Posted by Tom Konrad at 03:09 PM | Permalink | Comments (0)

This article is a continuation of my Ten Alternative Energy Speculations for 2008, with picks #8, 9, and10 published last Thursday.  If you haven't already, please read the introduction of that article before buying any of the stock picks that follow.  These companies are likely to be highly volatile, and large positions are not appropriate for many investors.   My least risky picks (#8,9, and #10) are part of that same article; my most speculative plays (#1-3) will are here.

#7 Electro Energy, Inc. (NasdaqCM:EEEI) $0.68

Electro Energy has risen 36% in the month and a half since I last wrote about it.  But the reasons to own it are still strong, and the rising share price should actually help the company raise the money they need to ramp up production.  See this article and the one linked to above for my reasons to like this stock.  

More recently, EEEI briefly rose to over $1 because of some excitement generated by their participation in an electric vehicle symposium.  My guess is that year end tax loss selling has brought the stock back down since then.  If I'm right, we can expect it to rebound again the next time they get attention from the press.  In any case, we can expect a lot of volatility.

#6 Capstone Microturbine (NasdaqGM:CPST) $1.62, and

#5 FuelCell Energy Inc. (NasdaqGM:FCEL) $10.30

I'm bullish on both these companies because I'm bullish on distributed generation and Combined Heat and Power (CHP) technologies.  My intuition is that 2008 or 2009 will be the year that distributed generation and CHP grab the attention of Wall Street, the way thin-film PV stole the show in 2007.  Both FuelCell and Capstone stand to benefit.  They may even get a boost from making ethanol production more efficient. 

Regular readers may be surprised that I am recommending a fuel cell stock, since I call Hydrogen Fuel Cell Vehicles "a politically inspired boondoggle."  But there are more types of fuel cells than hydrogen: molten carbonate or solid oxide fuel cells.  FCEL makes a variant of  molten carbonate fuel cell, called the Direct Fuel Cell (DFC), a different beast than the hydrogen  fuel cells, because it can work without an external mechanism to reform the hydrogen.  

FuelCell's DFCs burn methane rather than hydrogen, and are very tolerant not only of low heat content methane (which is often produced in anaerobic digestion or wastewater treatment.)  Note that on page 10 of this EPA study [.pdf] of combined heat and power installations at wastewater treatment plants, a 300kW fuel cell requires a less expensive fuel treatment pressurization facility than a much smaller microturbine system. This is almost certainly due to the lower need for fuel pressurization.

Biogas can be a particularly tricky fuel given the presence of impurities such as H₂S and siloxanes which build up as deposits in combustion chambers.  Microturbines, fuel cells, and internal combustion engines need fuel treatment if siloxanes (which are usually present in waste water treatment plants as a byproduct of deodorants) are present.  Fuel cells and reciprocating engines also require the removal of H₂S.  Nevertheless, wastewater treatment facilities combine an abundant source of free fuel (biogas) with a need for heating, and so present excellent opportunities for CHP.

Fuel cells are more efficient (47% fuel to electricity conversion) than comparably sized microturbines (30-35%) or internal combustion generators (about 40%), which not only translates into fuel savings (or higher electricity output), but also leads to only 85% or less CO₂ emissions than the less expensive (per kW) or internal combustion generators.  Both microturbines and fuel cells get a large system efficiency boost when the heat is also used; both FuelCell and Capstone claim that their products can reach 80% overall efficiency in a CHP context, while the relatively small size of microturbines and fuel cells are particularly well suited to small scale industrial facilities and commercial buildings.

Rising fuel prices make efficient generation important and new fuel sources such as biogas and other waste gasses (such as the Ford plant using a DFC to make electricity from paint fumes) will present opportunities for both DFCs and microturbines in CHP and distributed generation applications.  While DFCs have the advantage of working well on low energy content gas, microturbines are better suited to many projects due to their smaller size, and more fuel flexibility.  Microturbines are much more tolerant of a wide variety of fuels, and can even handle the H₂S in digester gas, as noted above.  Capstone sells versions which can run on liquid fuels such as diesel, propane, and kerosene.  While fuel cells also have this capability, they are less tolerant of impurities, and FuelCell does not currently sell products for these markets.  

One final advantage for microturbines is their ability to ramp up and down quickly, meaning they can used in remote locations with irregular fuel supplies, or when demand for electricity is not constant.   DFCs are less able to ramp up and down because of the need to maintain a high temperature in the fuel cell stacks, so they will only be used when they can be always on, but their ability to supplement biogas with natural gas from the pipeline system still means that they can be used with fuel of variable availability.

FuelCell's DFC and Capstone's microturbines should be able to compete effectively with internal combustion engines in distributed generation applications, since reciprocating engines are too large for many potential projects.  Rising energy prices and tightening emissions limits should allow DFCs to slowly increase their market share in a rapidly growing market.  Incidentally, there has also been a successful test of a fuel cell/microturbine hybrid system [.pdf], with a Capstone turbine generating electricity from the waste heat of a fuel cell.

Capstone finished 2008 with a year-end surge because of new rules which streamline the installation of microturbines in New York City, but could easily continue higher, if I am right about distributed generation taking off.  The new NYC guidelines could easily be one sign of the beginning of this trend.  On the other hand, I wouldn't be surprised to see a small price retreat in January.  It may be wise to wait a couple weeks and see what happens with CPST.

#4 Composite Technology Corp. (OTC BB:CPTC) $1.37

I first recommended CPTC last April in an article about how electricity transmission is essential for renewable energy on a large scale.  At the time I focused on how transmission helps even out the variability of wind power, but transmission is going to be if anything more essential to the development of Concentrating Solar Power (CSP).  While a 100x100 mile square of Southwest Desert theoretically receives enough sun to generate electricity for the entire US, and that electricity could meet both peaking and baseload needs with thermal storage, if the population centers in the East and California are to be served, it will require a massive transmission build out.  

I don't expect Southwest CSP to ever supply all our electricity needs, but I do expect that this abundant, storable electricity will start to be used for more than just the local needs of the desert Southwest within the next decade.  Even this much smaller vision will require a large upgrade to our transmission infrastructure, as will the growing penetration of wind as a percentage of utility resource bases.  CPTC's Aluminum Conductor Composite Core (ACCC) is gaining acceptance in China (which is building out its electric infrastructure much faster than we are building ours.)  I expect the US to follow (although just the China play could be enough to keep the stock rising.)  In the US, I see an opportunity for ACCC with utilities that want to move more power down existing rights of way.  Many utilities need to upgrade their transmission after decades of relative neglect, and the added demands of higher wind penetration and the possibility of long range transmission of CSP power only enhance this need.

Using ACCC instead of traditional (Aluminum Conductor Steel Reinforced) power cables allows the same line to carry higher currents (up to 2x as much) with less sagging in hot weather, and line losses are reduced by as much as a third under all conditions.  For high usage lines, a straight retrofit with ACCC can have good financial returns for a utility based solely on the lower line losses. 

CPTC also has a wind division, which like all turbine manufacturers should, in my opinion, be able to sell all the turbines they can build for the foreseeable future, which should greatly help CPTC with their ongoing operating cash flow as they ramp up production of their D8.2 turbines.  However, they are not profitable, and much of their turbine technology is assembled through patents licensed from other companies, and these revenues are vulnerable to a declining dollar and other foreign currency exchange risks.  CPTC will not become profitable in the near future, and will almost certainly have to return to the capital markets for additional capital.  If their products catch on, it should be easy for them to raise capital on favorable terms; if they don't, we can expect massive dilution.

In all, the "Risk Factors" section of their most recent annual report is long and many of the risks (including multiple lawsuits) are not trivial.  Perhaps the most serious risk is the United States' utility industry's resistance to change, which may lead to a complete unwillingness to use ACCC, despite its superior properties.  This is a big if, and I expect to long term inventors returns to be excellent if they persuade utilities to adopt their technology, and miserable if utilities stick to the way they have always done things.

Three more speculative picks available here.

DISCLOSURE: Tom Konrad and/or his clients have long positions in EEEI, FCEL, CPST, and CPTC.

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.

Posted by Tom Konrad at 08:56 PM | Permalink | Comments (6) | TrackBacks (0)

Investing in Renewable Energy Stocks seldom fails to be exciting, although it can lead to crushing losses as well as mouthwatering gains (Think Ethanol stocks and Thin Film Solar in 2007.)  With this in mind, I usually emphasize that the majority of most investors portfolios should be targeted towards larger, profitable companies, especially those focused on Energy Efficiency rather than the more sexy Renewable Energy technologies.  This is the philosophy behind Alternative Energy Stocks' Blue Chip Portfolio: companies which aren't sexy, but which still are well positioned to take advantage of rising oil prices and increasing efforts to reduce and regulation of Greenhouse Gas Emissions.

That said, a small exposure to even extremely volatile stocks can, if kept small, improve the risk-return profile of a portfolios, so long as those stocks are not overly correlated to the portfolio as a whole. 

Other people just like to gamble.   Given the vertiginous returns we have seen in the alternative energy sector recently (First Solar, NYSE:FSLR is up by a factor of ten in 2007,) it's a safe bet that this Alternative Energy has drawn more than our share of gamblers.

This article is for the gamblers (and a little bit for the cautious diversifiers.)  If you're a gambler, these are the gambles I would be taking.  If you're a cautious diversifier, you can consider using a few of these bets as a way to diversify your portfolio of bonds and energy efficiency companies, just keep it small (no more than a few percent your portfolio.)

In either case, be prepared to have any of these bets go wildly wrong, or succeed well beyond your expectations.  

Some Educated Hunches

Many people who see themselves as cautious diversifiers like to set aside a small part of their portfolio as "play money," which they can use without their normal portfolio discipline, to invest in something that makes them feel good.  I feel this is the wrong approach.  Emotional investing is a sure-fire way to stack the odds against yourself.  Even in risky assets, there are good bets and bad ones.

Especially when it comes to highly risky and emotive companies, I'm a great believer in Behavioral Finance, the theory that investors make the same mistakes over and over again because of the way our emotions are wired.  Roughly, this means that we all tend to invest in the same stocks at the same time because it feels good to do so (which means we buy precisely when the price is irrationally high) and sell the same stocks precisely when they're screaming bargains.

My favorite gambles therefore are stocks I think have the potential to be tomorrows feel-good fad, that is currently being ignored.  I call this gambling because it has very little or nothing to do with the underlying fundamentals, an a lot more to do with wild emotional swings of the retail investor.  While it is gambling, it has more in common with card-counting, than with slot machines.

Ten Gambles for 2008

I personally am more a cautious diversifier than a gambler, but I do have some gambler in me.  All the speculations below are ones I am taking with my own money, and some of them are also positions in client portfolios.  I don't see this as play money, but at the same time, I know that any of these gambles cold turn against us unexpectedly, and I keep the positions accordingly small.  In reverse order of my guess at their riskiness, here is the first installment detailing ten bets I'm currently making, and which I expect to pay off as a whole in 2008 (although individual stocks will undoubtedly be losers.)

#10 and #9: Cree, Inc. (NasdaqGS:CREE) $23.50, and Lighting Science Group (LSGP.OB) $0.32.

I've been invested in both of these for a long time, and last wrote about these LED stocks in June.  I sold half the holdings of many of my managed accounts  soon after that article when CREE was around $27-$30, about double the price at which I'd bought them.  Smaller positions in Lighting Science Group have followed a similar pattern, mostly due to buyout speculation in LED stocks, with only modest gains over the last year as speculation has died down.

Yet the fundamental reasons to be bullish about LEDs are stronger than ever.  This Christmas season was the Season of LEDs in more ways than one.  In my personal experience, I went to Target on December 15 to get another string to add to the ones I'd bought last spring, and found that they were totally sold out (although conventional lights were well in stock.)  I left empty handed, but I expect that Philips (NYSE:PHG - another holding), will report LED sales well above expectations this quarter.

Also, while solar stocks may suffer with tax incentives removed from the recently signed Energy Bill, the bill did contain a "Ban the Bulb" provision, phasing out incandescent lights by 2014.  Lighting Science saw a 20% jump the day it was signed, but it's still way down from its highs last summer, and Cree didn't budge.  It's true that most incandescent bulbs will probably be replaced with CFLs, but LEDs work better in several sorts of applications: they are dimmable, work better at low temperatures (such as in freezers), and are more tolerant of vibration.  Thus, the new law provides a practically guaranteed, large market.

I'll be surprised if both these stocks don't see significant run-ups sometime in 2008, and Lighting Science could easily see one soon after the New Year, due to the publicity they'll be getting in Time Square on New Year's Eve.  Most likely, we'll have to wait a little longer than that, but even without a run-up or buyout, I see these two as good long-term bets.

For hard-core speculators, one LED penny stock that you might look at is Cyberlux (CYBL.OB.)  Cyberlux was brought to my attention by a reader the last time I wrote about LEDs.  I looked into it again last week, but decided not to invest because of the large overhang of convertible debt.  In my analysis, it will be virtually impossible for long-term shareholders to profit because of the expected dilution due to the convertibles.  That does not mean that short term traders might not make a killing (or lose their shirts.)  For more on Cyberlux, go to this message board (run by the reader who brought the stock to my attention.)  There's a lot of information there, although I don't know if its accurate.

#8 Maxwell Technologies (NasdaqGM: MXWL) $8.10

Maxwell is a developer of ultracapacitors, which are currently used in wind turbines, utility power quality applications, and other industrial applications.  Wind should continue to see strong growth throughout the world, which should continue to help turbine component suppliers.

They also have the potential to be an important component for energy storage in Hybrid Electric and Electric vehicles.  Maxwell has recently announced a partnership with China's Tianjin Lishen Battery to manufacture hybrid powerpacks, which will combine the speed, long cycle life, and low temperature performance of ultracapacitors with the large energy storage capacity of lithium-ion batteries.  Readers and anyone who has seen one of my presentations already knows that I see energy storage as the best way to take advantage of the adoption of hybrid, plug-in-hybrid and electric vehicles.

The downside here is that Maxwell is currently in a large patent-infringement suit with private ultracapacitor company NessCap.  I find patent-infringement suits to be very unpredictable.  Maxwell filed the initial complaint in October 2006, and NessCap countersued in December.  A large negative earnings surprise last June and subsequent analyst downgrades further depressed the stock, possibly aggravated by tax-loss selling.  I see a good chance of a quick rebound in 2008, especially if the courts start ruling in favor of Maxwell, or the two companies reach a settlement. While negative ruling would hurt, they would be unlikely to destroy the company.

Maxwell's top-line revenue has been flat for over a year, so a large part of the recent price drop has likely been due to investor fatigue.  Nevertheless, insiders have been buying the stock on the open market, which I find reassuring with regard to internal confidence at the company.  Any significant uptick in sales volumes would likely bring with it a strong increase in the stock price.

Picks 4-7 are here, and Picks #1-3 are available here.

I decided to split this article into parts because the stocks I'm picking seem to be rising even as I write... I was clearly not the only person who has been thinking along these lines over Christmas...

Here's what has already happened to picks #8,9, and 10 on December 26, as I was writing:.

Cree jumps on American Technology Research Comments (up 10.7%); Lighting Science up 25%; Maxwell Technologies up 6%.

DISCLOSURE: Tom Konrad and/or his clients have long positions in CREE, LSGP, PHG, MXWL, and a short position in FSLR.

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.

Posted by Tom Konrad at 12:56 AM | Permalink | Comments (3) | TrackBacks (0)

The same Fortune interview with Jim Rogers, which I referenced yesterday also contains an excerpt from his new book, A Bull in China.  In it, he goes over a few stock picks, including one I thought worth bringing to the attention of investors interested in profiting from rising CAFE standards and other increases in vehicle efficiency:  Jim says:

Aluminum Corp. of China (Chalco) (NYSE: ACH). Three year trend: profits up 86.7%, revenues up 88.8%.

Chalco is the largest producer of primary aluminum in the world's fastest-growing aluminum market.  Established in 1999 out of state-owned firms, this No. 2 aluminum manufacturer in the world is reported to be planning aggressive acquisitions, including a possible takeover bid for Alcoa. While some new plants are being built, others in China have been closing due to the high electricity costs.  But world demand for this commodity continues to grow.

As petroleum becomes increasingly expensive, there will be an increasing push to improve vehicle efficiency.  One of the simplest and most cost effective ways to do this is to incorporate more aluminum, as I argued in this article about Alcoa (NYSE:AA.)  

I've long been leery about investing in Chinese firms, because I have serious doubts about Chinese commitment to shareholder rights and disclosure, although these may be improving.  Nevertheless, my respect for Jim Rogers has peaked my interest, both in the stock and in his latest book.

DISCLOSURE: Tom Konrad  and his clients have positions in any of the securities mentioned here: AA.

Posted by Tom Konrad at 11:19 AM | Permalink | Comments (0)

Energy Efficiency breaks the laws of economics.  Despite the fact that it's considerably cheaper then traditional energy sources, as well as providing substantial benefits in terms of comfort, economic growth, safety, and the environment, barriers arising from misplaced incentives and the attitudes, awareness, perceptions, and general level of knowledge all conspire to prevent people from taking steps which would otherwise be extremely rewarding.

The key to better implementation of Energy Efficiency programs are programs to raise people's interest or awareness.  For instance, there is the example of how Woodstock Hydro found that their customers' electricity usage dropped 15% and were more satisfied with their service when they were given real time information about their electricity usage as part of a Pay-as-you-go program.

A Sioux Center Success Story

Another example of how information and awareness motivated people to be more energy efficient was told to me at the 2007 Energy Star Summit by Ron Horstman, the former Municipal Utilities Energy Efficiency coordinator of Sioux Center, Iowa.  Sioux Center achieved almost universal residential participation in that city's energy efficiency program by using infrared images to make aware of their homes' energy use personal.  This is his (lightly edited) description of the outreach efforts:

In 1986, the City of Sioux Center was engaged in a comprehensive community-wide energy management program.  One of the overall goals of this program was to use energy efficiency as an economic development tool.  Because Sioux Center imported over 98% of the energy it used, every dollar spent on energy left the community.  If even a small percentage of that money were retained in the community, it would have a noticeable impact on the economy.

One of the first steps and goals was to raise the energy awareness level of the entire community and to get their attention so that the programs would have high levels of participation and would produce significant results. 

Infrared Photos Raise Awareness and Interest

We chose to use infrared Thermography technology [see last week's article on an IR Imaging Stock] to raise the energy awareness level of everyone in the community.  We took an infrared photo from the street side of every home and business in the community and enclosed the photo with each owner's utility bill, along with an invitation to call my office for an explanation or interpretation of what the infrared photo depicted. 

I was inundated with calls.  The photos touched everyone on a personal level.  Residents and business owners saw their buildings in a new way, and they wanted to know what it meant.  When a customer called for more information, I would pull up my copy of their infrared photo and explain the prominent thermal features.  I used the conversation to tell them that their home or business was a prime candidate for a class "A" energy audit.  People signed up for energy audits right and left and I conducted these audits as quickly as possible.   

The utility had decided to offer these quality audits at a discounted price with the goal of educating each and every customer who decided to have the audit done.  We only charged $10 for an audit valued at approximately $250.  The information provided in each audit gave the building owners the information needed to allow them to make sound energy management decisions.  The audit results sheet provided a list of energy efficiency measures each owner could implement, the cost of installation for each measure, the first-year savings of each measure, and the simple payback in years.  This results sheet provided each recipient with a multi-year road map to energy efficiency.  I conducted audits on 28% of the homes and businesses in the community. 

Greatly Improved Participation in Future Programs

This one program built a great deal of credibility with our customers.  Homeowners and business owners implemented the recommended energy efficiency measures from the audits and began to realize the savings.  After that successful program, we initiated many other energy efficiency programs.  All of the programs were successful to different degrees.  The most important factor was the level of participation we were able to achieve with each program.  One program in particular - the voluntary load management program - achieved 98% participation.  The average utility implementing a load management program was only able to realize participation rates between 10 and 30%.  Our credibility with our customers spurred our success. 

Economic Benefits

After several years of conducting energy efficiency programs, I conducted and economic analysis to determine the impact these programs were having on the community.  The numbers were astounding!  The energy consumption per capita had been reduced by 38%, with millions of dollars retained in the community.   Businesses were growing and expanding, jobs were being created, amenities such as parks, recreation facilities, and cultural opportunities were increasing, and industries moved to the community for its quality of life. 

Societal Benefits

To re-emphasize Ron's point about increased quality of life, this article about a more recent program in Sioux Center highlights the retrofit of the city's fire station. In addition to a less than 12 year payback, the firemen reported being more comfortable (which likely helped the city with retention), increased use of the facility's classroom, and volunteer firemen spent more time in the facility readying the equipment for their next call, which contributed to the safety of everyone in the region.  According to Ron, the firemen's new pride in their facility was felt throughout the community.

Infrared Imaging Stock

I'm still reluctant to buy FLIR at the current prices (even more so since a reader pointed out the P/E I was using was off by a factor of 2.)  Nevertheless, stories like these leave me more convinced that infrared imagery must have a large role to play in promoting adoption of demand-side management.  It may come with more communities publishing energy use maps, like Haringey in the UK, or with Eco-Brokers selling energy efficient homes contrasting IR images of their home with IR images of other nearby homes on the market, or with utility programs like that in Sioux Center using infrared images to make energy use personal.

DISCLOSURE: Tom Konrad  and his clients do not have positions in any of the securities mentioned here.

Posted by Tom Konrad at 05:12 PM | Permalink | Comments (2) | TrackBacks (0)

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:

1. Rising energy costs: as energy prices rise, knowing what to do to improve your home's energy efficiency will become more valuable.
2. 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.  One relatively easy way for a new home builder to differentiate his product from existing homes is to make them energy efficient.  By advertising such efforts, new home builders will raise the general awareness of the importance of good insulation and proper sealing in homes, both new and old.
3. Expected Greenhouse Gas Regulations.  The consensus among scientist is that man made climate change is unequivocally happening, and that we must take immediate action to avert its worst effects.  Politicians are likely to seize on improved energy efficiency as a cost-free way to reduce carbon emissions (which they are.)

Energy auditors will benefit from all these trends, and the industry is entering into a period of rapid expansion.  The makers of the tools they use will benefit as well.  

Tools of the Trade

What tools do energy auditors use?  Blower doors, flow meters (although some just use plastic trash bags), digital pressure gauges, combustion analyzer, Hand held smoke, low-e coating detectors, Kill-a-Watt appliance testers and, the tool only a tiny fraction of the attendees had but most want: Infrared (IR) Cameras (beginning to replace infrared thermometers.)

Among these, infrared imaging seems like the most exciting investment opportunity.  (Note: I am not talking about the images you can take using a filter and a standard digital camera... they go much farther into the infrared spectrum, and allow fine detection of temperature differences.)   

Not only are IR cameras in an early stage of adoption among energy auditors, as prices fall, I expect a host of other applications to emerge.    Indeed, there are already a host of applications for IR cameras, most of which have been recently made possible by the advent of uncooled IR cameras.  Until recently, in order to image in the infrared, the imaging chip had to be cooled to below the temperature of the image subject.  In practice, this meant that IR cameras had to be cooled with liquid nitrogen, which made them too awkward for use in mass markets.

Energy auditors and building inspectors can use them to locate leaks, do fault detection in HVAC equipment, as well as diagnose insulation problems.  

When it comes to energy efficiency, quick diagnostics of mechanical problems are key, and not just in home energy use.  There are a host of applications, including veterinary, electrical, and automotive.  The utility industry uses infrared cameras to diagnose problems at substations and transmission lines to avoid close-up inspections in high voltage areas.  

Another application which will be interesting to those of us who expect increased efforts to reduce Greenhouse Gas (GHG) emissions is the ability of specially tuned IR cameras to see volatile organic compounds (including potent GHGs such as methane) as they leak into the atmosphere.

IR Imaging Companies

The only public company with a large presence in IR imaging is FLIR Systems (NasdaqGS: FLIR), which also sells their cameras and night vision equipment to the military and other government bodies such as homeland security and law enforcement.   The largest competitor in the home inspection market is Fluke, a privately owned general instrumentation company.  

FLIR seems to have a strong lead in consumer awareness.  Most of the searches I did researching this article eventually led me to FLIR cameras.  I also know that FLIR actively markets to the home inspection industry: I sat in on a presentation at the 2007 Energy Star Summit, and no other IR camera manufacturers were present.

In addition, their GasFindIR video camera seems to be the leading tool for the gas leak detection application mentioned above.  

Valuation

FLIR is growing at about 20-25% a year, with most analysts expecting this growth to continue.  The stock price has doubled in the last year.  It has a trailing P/E of only 18, still quite low for a growth stock.  If I were a growth investor, I'd see this as a red-hot opportunity.  Correction: FLIR's P/E at the time of writing was 36, a typical growth stock valuation.  The error arose because I got the number from Yahoo!, where it had been confused because of a stock split. I like to think I would have been more careful valuing a stock I intended to buy.   

I'm always reluctant to buy after a stock has doubled in less than a year, and company insiders have been selling the stock, which also make me cautious.  I'll be keeping my eye on this one, knowing that FLIR may never come down to a price at which I'm ready to buy.  I have a feeling that a year from now I'll be telling stories about "The one that go away."

DISCLOSURE: Tom Konrad  and his clients do not have positions in FLIR.

Posted by Tom Konrad at 12:59 PM | Permalink | Comments (2) | TrackBacks (0)

Last week, I attended the 2007 Energy Star Summit to keep up with what is going on in home energy efficiency, and, with luck, find a new public company or two to recommend.  

After several workshops for home energy raters, I came away with an idea for an article to help people concerned about home safety and efficiency look for new places to live.  Because it was off-topic for Alternative Energy Stocks, I offered it to my friend Preston at Jetson Green, and he has published it here.

Back on the subject of financial (As opposed to real-estate) investments, I did find and interesting industry (thermal imaging,) with a least one public company, and will write an article about it later this week.  

Also in attendance were representatives of several companies I have been watching for a while.  I've often recommended Owens Corning (NYSE: OC), because of their insulation business.  Trane (NYSE:TT, formerly American Standard), and Honeywell International (NYSE: HON) both came up in my article about performance contracting stocks, although they are also interesting because of their energy efficient products, controls (Honeywell) and plumbing fixtures (Trane).  See this article as to why plumbing is an interesting efficiency investment.

Another efficient home-appliance play is Whirlpool (NYSE: WHR), which was cited by Energy & Environmental Building Association certified trainer Mark La Liberte as having redesigned their new products to be 85-90% recycled.  While it pays to be skeptical of such claims, given many companies' propensity for greenwashing, so I pay attention when an industry professional gives an unprompted endorsement.

Link to my article on searching for an energy-efficient resale home or rental.

DISCLOSURE: Tom Konrad  and/or his clients have positions in these companies mentioned here: OC.

Posted by Tom Konrad at 11:19 PM | Permalink | Comments (0) | TrackBacks (0)

I've begun acting as a consultant to the Colorado Energy Efficiency Business Coalition (CEEBC) in a rulemaking docket for Demand Side Management (DSM) case before the Colorado Public Utilities Commission (PUC).  In the 2007 Legislative session, the Colorado legislature passed enabling legislation calling for utility-wide Demand Side Management programs for natural gas utilities.  To date, all DSM in Colorado has been focused on low income customers. 

Crucially, the legislation allows for non-energy benefits, such as increased comfort, economic multiplier effects (i.e. jobs), and reduced volatility of energy costs be included in the evaluation of the benefits of programs.  Since financial benefits are a relatively small part of net benefit, this allows the implementation of a large number of DSM programs with large net benefit, but which might have only small financial benefits.  The Commission will effectively decide whether those programs will be implemented in this rulemaking.  The utilities in question, led by Xcel Energy (NYSE: XEL), are currently only willing to include minor, easily quantified non-energy benefits, such as water savings in an energy-efficient dishwasher.

A Seemingly Easy Decision

Suppose you have the following choice for your home or business:

A.