Electric grid stocks are publicly traded companies whose business involves electric infrastructure, including transmission, distribution, pricing, conversion, and regulation.  Includes the list of smart grid stocks.

This article was last updated on 8/12/21.

ABB Ltd (ABB)
Advanced Energy Industries (AEIS)
AMSC (AMSC)
Avangrid, Inc. (AGR)
AZZ Incorporated (AZZ)
China Ruifeng Renewable Energy Holdings Ltd (0527.HK)
Companhia Paranaense de Energia – COPEL (ELP)
Custom Truck One Source, Inc. (CTOS)
Digi International (DGII)
Echelon Corporation (ELON)
EMCORE Group, Inc (EME)
ESCO Technologies, Inc. (ESE)
Fortis, Inc. (FTS, FTS.TO)
General Electric (GE)
Hammond Power Solutions Inc. (HPS-A.TO, HMDPF)
Hubbell, Inc. (HUB-B, HUB-A)
Itron (ITRI)
Landis+Gyr Group AG (LAND.SW)
MasTec Inc. (MTZ)
MYR Group Inc. (MYRG)
National Grid PLC (NGG)
Prysmian S.P.A (PRI.MI, PRYMF)
Quanta Services Inc (PWR)
Red Electrica (RE21.SG, RDEIY)
Schneider Electric (SU.PA, SBGSF, SBGSY)
Siemens AG (SIE.DE, SIEGY)
SMA Solar Technology (S92.DE)
SolarEdge (SEDG)
Stella Jones (STLJF)
Superconducting Technologies, Inc. (SCON)
TE Connectivity, Ltd (TEL)
Terna – Rete Elettrica Nazionale Società per Azioni (TRN.MI, TERRF, TEZNY)
Valmont Industries (VMI)
WESCO International (WCC)

If you know of any electric grid stock that is not listed here and should be, please let us know by leaving a comment. Also for stocks in the list that you think should be removed.

The post List of Electric Grid Stocks appeared first on Alternative Energy Stocks.

By Jeff Siegel

When it comes to understanding the EU, I’m not the brightest star in the sky.

And to be honest, after stumbling down a rabbit hole of proposals, directorates, and laws on the European Commission’s website, I was even worse shape than before I started.

The European Commission is the EU’s executive body that represents the interests of the EU as a whole. And just yesterday it made a decision that will result in a huge boost for wind energy in Germany.

Germany’s 7 Gigawatts are Coming

So as many in the renewable energy game know, following the Fukushima disaster, Germany decided it wanted to put the kibosh on its fleet of nuclear power plants. In its place, the Germans would build out their wind energy capacity to make up most of the difference.

This is actually a pretty lofty goal, and of course it was heavily criticized by nuclear apologists and fossil fuel-powered knuckle-draggers. But you know, Germans tend to be a pretty industrious group of people, so I’ve never doubted their ability to get this done.

What I didn’t realize, however, was that because the investment necessary for this wind energy development was so massive – about 30 billion euros – the European Commission would have to ensure that it didn’t violate any state rules.

Yesterday we got word that the Commission has given Germany the go-ahead to proceed.

Here’s a clip from the Commissions press release on the matter …

Brussels, 16 April 2015

The European Commission has found that German plans to support the building of 20 offshore wind farms are in line with EU state aid rules. Seventeen wind farms will be located in the North Sea and three in the Baltic Sea. The Commission concluded that the project would further EU energy and environmental objectives without unduly distorting competition in the Single Market.

In October 2014 Germany notified plans to support the construction and operation of several offshore wind farms. Aid would be granted to operators in the form of a premium paid on top of the market price for electricity.

The size of each wind farm ranges from 252 megawatt (MW) to 688 MW and, in total, the projects will make available up to 7 gigawatt (GW) of renewable energy generation capacity. The total investment costs amount to € 29.3 billion. All wind farms are planned to start producing electricity by the end of 2019 at the latest. In total, they are expected to generate 28 terawatt-hours (TWh) of renewable electricity per year amounting to almost 13% of Germany’s 2020 scenario for renewable energy given in the National Renewable Energy Action Plan (NREAP).

The Commission assessed the projects under its Guidelines on State aid for environmental protection and energy that entered into force in July 2014 The Commission found that the projects contribute to reaching Germany’s 2020 targets for renewable energy without unduly distorting competition in the single market. In particular, the Commission verified that the state aid is limited to what is necessary to realising the investment. The rates of return that investors would achieve thanks to the premium were limited to what is necessary to implement each project and in line with rates previously approved by the Commission for similar projects. The Commission also took into consideration that these projects will enable new electricity providers to enter the German generation market. This will have a positive effect on competition.

Now Siemens (OTCBB: SIEGY) is the king of the castle when it comes to offshore wind turbines in Germany. Sadly, in the U.S., it only trades on the pink sheets now. But hardcore renewable energy investors are rarely scared off by pink sheets. Particularly pink sheets with market caps of $94 billion, like Siemens.

Of course, with such a huge undertaking – about 7 gigawatts of wind power – this will only add further momentum to the wind industry in general. Certainly GE (NYSE: GE), Vestas (OTCBB: VWDRY), and ABB (NYSE: ABB) will enjoy some residual momentum. Rising tides to indeed lift all boats.

Of course, with the Dow down about 325 points right now, I suspect few investors are too giddy over this news. But looking at this development from a long-term perspective, yesterday’s announcement from the European Commission was a pretty big deal, and we’ll be wise to invest accordingly.

Jeff Siegel is Editor of Energy and Capital, where this article was first published.

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By Jeff Siegel

In Dubai, solar is now cheaper than oil at $10 a barrel.

Yes, you read that correctly.

As reported by the National Bank of Abu Dhabi:

Dubai set a new global benchmark in December 2014: at 5.84 US cents per kW hour, the bid for Dubai Electricity and Water Authority’s 200 MW solar PV plant was cheaper than oil at US$10/barrel and gas at US$5/MMBtu.

You see, while oil in the U.S. is used primarily as a transportation fuel, in the oil-rich Middle East, the shiny black stuff is used to generate electricity. In fact, in Saudi Arabia, oil accounts for more than 65% of all electricity production. In Kuwait, it’s as high as 71%, and in Yemen, it’s nearly 100%.

Oh, to be a fly on the mud-brick wall when the proverbial poop hits the fan.

Meanwhile, consider this…

In the absence of Saudi Arabia’s own domestic oil consumption, the desert kingdom could have generated an extra $43.8 billion in 2013.

With that kind of scratch in play, it’s not surprising that the smart money is piling into a burgeoning solar industry in the Middle East.

Grid Parity for All!

In a new report written for the National Bank of Abu Dhabi, researchers have found that renewable energy technologies are fast approaching grid parity in most parts of the world.

And this was no Greenpeace report, either. This thing was actually produced primarily for the finance community in the Gulf region.

Here are some of its findings…

• More than 50% of investment in new generation capacity worldwide is now in renewables.
• $260 billion a year has been invested in renewable energy technologies worldwide for the past five years.
• Green bond issues to pay for low-carbon energy projects reached $36.6 billion in 2014, more than triple the previous year.
• Prices for solar PV modules have fallen over 80% since 2008.
• Solar PV will be at grid parity in 80% of countries in the next two years.
• Solar PV is already cheaper than grid electricity in 42 of the 50 largest U.S. cities.
• Industrial applications of energy efficiency can deliver 100% payback in five years.
• Modern wind turbines produce 15 times more electricity than the typical wind turbine in 1990.
• The cost of energy storage is expected to drop to $100 per kWh in the next five years. Today it’s about $250.

These data points are music to the ears of Middle East kings, presidents, and prime ministers. After all, in the Gulf region, oil is the lifeblood of many economies. And make no mistake  the cheap oil party going on right now won’t last forever.

Truth is, in the Middle East, there is no greater choice for new electricity generation than solar. You know, because it’s a freaking desert!

Quiet Integration

While I remain bullish on solar in the U.S., I’m becoming more and more attracted to the opportunities that could soon be spawned throughout the Middle East. In fact, I’m planning a research junket to the region sometime this year to get a firsthand look at what could soon be one of the most lucrative solar markets on the planet.

In the meantime, keep a close eye on the solar and solar-related companies that are actively investing in the region right now. These include, but are not limited to:

• ABB (NYSE: ABB)
• SunPower (NASDAQ: SPWR)
• First Solar (NASDAQ: FSLR)
• Schneider Electric (OTC: SBGSY)
• SunEdison (NYSE: SUNE)
• Trina Solar (NYSE: TSL)

This list will continue to grow, too.

Because while the Saudis and the U.S. play their game of chicken, behind the backdrop of all this nonsense and rhetoric, a strong and vibrant solar market is quietly integrating itself into a fossil fuel-addicted world. And it’s doing so profitably.

Invest accordingly.

To a new way of life and a new generation of wealth…

Jeff Siegel is Editor of Energy and Capital, where this article was first published.

The post Invest Where Solar Beats $10 Oil appeared first on Alternative Energy Stocks.

Tom Konrad CFA

Invest In What You Know

“Invest in what you know” is an old stock market adage.  The idea is that, if you have some personal knowledge of the real economy, you can use that to make better investments. 

How useful this adage is depends on how you apply it.  If you know more about a stock market sector than other investors because of “what you know,” it’s possible to make better investments because you may be better at spotting future trends.  If, on the other hand, you feel you know a sector because you buy its products, you may get caught up in a herd mentality and end up buying a company (along with a bunch of its other customers) just when the popularity of its products peaks along with its stock price.

I’m a recent customer of the solar industry.  Last week, my solar installer flipped the switch on my new solar PV system, and my meter started spinning backwards.  Like many new solar owners, I’m a bit obsessed the system.  Here, I’m channeling that obsession into an article about the companies that supplied parts of the system, and what we can learn about their prospects.

The System

Solar systems are far from uniform, and vary significantly depending on energy usage, location, available space, and local incentives.  My system is a little larger than average, at 6.6kW. I have a fairly high load because last year I installed air source heat pumps to supplement my oil-fired boiler.  My 2 person, 2000 square foot house in New York’s Hudson River Valley uses an average of 13 kWh a day outside the heating season, but and another 10-20 kWh a day during the four month heating season, for an average annual usage of 21 kWh/day.

According to my calculations using PVWatts, my 6.6kW system should produce just about that much in an average year, but my solar installer used more conservative numbers, and expects it to produce about 20kWh a day.  Below is a monthly production and usage chart based on my calculations.

Because my usage is highest in the winter, and my production is highest in the summer, I will be relying on net metering rules to “bank” kWh produced from April to October to be used for heating from November to March.  My utility requires that this kWh bank be trued up once a year, which I will set in March or April.  I’ve shown the true-up here in March, where I’m “billed for” negative kWh (i.e. paid by the utility.) 

This “banking” is actually to the utility’s advantage because, not only do they effectively get an interest-free loan of electricity for an average of 6 months, but New York electricity prices tend to be a little higher in the summer than in winter.  Since 2005, only 2014 had a higher peak winter price than the previous summer peak.  Last year’s exceptionally high winter prices were caused by locally high natural gas prices, in turn fueled by the polar vortex.  The utility also benefits from daily production swings: solar production is highest when hourly prices are highest in New York.

Although the utility receives significant benefits from my solar system, it is also a good deal for me, mostly due to Federal and State incentives. If I assume electricity price increases completely offset system maintenance costs (I expect them to more than pay for any maintenance), my expected internal rate of return over 30 years will be 9.7% (or 8.3% over 20 years.)  The payback of my initial investment will take about 9 years. Without subsidies, the 30 year return would have been a paltry 1.9%, with a 22 year payback.

I expect that many New York solar systems have even better returns than mine, because I made a number of decisions which raised cost without increasing electric production.  First, I wanted to reserve part of my roof for a future solar hot water system, so I chose somewhat more expensive monocrystalline panels in order to make the most of the roof space I was willing to use.  Second, I decided to go with SMA TL-US strong inverters rather than microinverters because TL-US inverters can provide some back-up power when the grid goes down.  Third, I had to do some upgrades to the frame of my garage and attic of my old (1930) house to support the extra weight of the panels.  Finally, I wanted an awning to protect a third floor balcony from rain, and so I had my installer project the edge of the panels past the edge of the roof to serve this function, making the installation more difficult.

The Stocks

I don’t follow any of these stocks closely, so I decided to ask my panel of professional green money managers. 

SMA Solar Technology (S92.DE, SMTGF)

My inverters were from SMA Solar Technology AG (S92.DE, SMTGF), a Sunny Boy 3000TL-US-22 and a Sunny Boy 3800TL-US-22. These cost about $0.50/W and account for about 13% of the total system cost.

There was some real disagreement about SMA.  Shawn Kravetz manages a solar focused hedge fund at Esplanade Capital LLC in Boston, so I pay attention to his thoughts on solar related stocks.  He notes that SMA Solar Technology’s string inverters have been losing market share to suppliers of micro-inverters and optimizers. 

These competing technologies make better use of the power produced when power production from panels is not uniform, such as when the panels are partially shaded.  Fortunately for me, I have very little shading, and living in a rural area, I wanted to be prepared for long-term power outages.  To the right, you will see an image of me testing the inverter’s ability to power my furnace on a cloudy day (it was raining at the time.)  The furnace draws 340W, which is about 8% of the rated capacity of the larger of my two solar arrays. I expect that I should have enough power to run the furnace for an hour or two even on cloudy winter days, as long as I keep them clear of snow.

Frank Morris, the former portfolio manager of the Global Ecological mutual fund (EPENX) describes the technology as a dramatic innovation:

With the flip of the switch, SMA’s TL-US inverter will send up to 15A of 110V power to your home outlet even during a power outage.  This feature is unique to the SMA TL-US line of inverters.

When there is a power outage, a s
olar roof with SMA TL-US line of inverters can provide electricity to your home, independent of the grid.  During hurricane Sandy, millions lost electricity-and the thousands of solar roofs in Sandy’s wake were useless: most inverters lose function when the grid is down.  The SMA TL-US line of inverters represent a dramatic innovation for the world solar market.  The convergence of resilient distributed affordable solar electricity generation, affordable electricity storage, and breakthroughs like the SMA TL-US line of inverters, should have a dramatic effect on the global utility industry.

Thomas Moser, CFP^® of High Impact Investments^® in Tucson, Arizona likes SMA most of the companies listed from a buying viewpoint, also because of its applications to backup power.  He says, “Energy storage will be needed as individuals and companies look to disconnect from utilities.  The level of concern regarding energy backup systems in case of total utility shutdown will rise, especially with worldwide threats capable of shutting down the grid.  SMA’s R&D is well ahead of the curve on energy storage.”  That said, he sees many more attractive clean energy buying opportunities right now, and says SMA’s stock price would need to decline from the current €22 and change to around €15 before he’d buy it.

LG Electronics (066570.KS) 

My panels are 22 LG 300W Mono X® NeON Modules.  These are fairly high-end modules using 60 monocrystalline silicon cells with a total module efficiency of 18.3%.  The panels can be bought retail for approximately $1.50/W, and account for approximately 40% of the total system cost.  LG Electronics is a listed Korean conglomerate with symbol 066570 on the Korea SE. 

LG is a large conglomerate.  My experts did not feel that its solar segment was a large enough part of its overall business to make an investment case.  That’s not to say they don’t know anything about the company: Kravetz knew mine were from LG’s MonoX^® line just from of the power rating. 

Schneider Electric SE (SU.F, SBGSF)

Schneider Electric SE (SU.F,SBGSF.) supplied five Square D brand Solar DC disconnects and a circuit breaker box for combining the current from the two inverters.   I’m guessing these amount to between 10¢ and 30¢ per Watt, or about 5% of the total system cost.

Schneider makes a number of clean energy related products, but the experts I consulted were not familiar with the company or did not think clean energy is a significant enough part of its business to make an investment case.

ABB Group Ltd. (ABB)

My installer included an analogue “dumb” meter from ABB Group (ABB) to keep track of total system output (the SMA inverters each keep track of their own energy production.) The system also required 200 to 300 feet of conduit and electrical boxes from Carlon, a brand owned by ABB. These components likely cost between 10¢ and 15¢ per Watt, or about 3% of the total system cost.

Although ABB is another conglomerate, it has enough cleantech to get the attention of my panel. Jan Schalkwijk, CFA^® of JPS Global Investments in Portland, OR says,

ABB touches on renewables and energy efficiency in various ways, with offerings such as solar inverters, HVDC [high voltage direct current] links that connect renewables power sources to the grid (ABB has installed 13 of the 14 HVDC projects commissioned worldwide to date), offshore wind power projects, and high efficiency motors, among other power products. In the most recent quarter, orders were up 13% year-over-year, half of which came from a HVDC ink project in Canada to connect renewable power sources to the North American grid. Another large project in progress is the 900MW DolWin2 offshore wind converter platform that will be installed in the German North Sea. Recently the company has faced industry headwinds related to offshore wind in Europe, unprofitable EPC projects [engineering, procurement, & construction, i.e. projects for which ABB was primarily responsible for construction] for solar (which it is discontinuing), and contracts that did not have equitable risk sharing with partners. The company is aware of these issues and is changing its strategy to de-risk and improve profitability of the Power Systems business. With a dividend yield of 3.6% vs 3% for the peer group, a strong competitive position, and a relative valuation 5-10% below peers (averaging relative P/E, EV/EBITDA, P/B, EV/Sales, P/CF) ABB looks like a decent bet. Risks include unfavorable currency movements (Swiss Franc), further trouble in offshore wind, and failure to deliver on strategic refocus of the Power Systems business.

Jim Hansen at Ravenna Capital Management in Seattle, Washington also owns ABB, and “will be buying again if the price drops.” Moser is more skeptical, and comments that its recently announced $4 billion stock buyback looks like “putting a fresh coat of paint on an old truck.”

Itron, Inc. (ITRI)

Although not directly involved in the project, my utility replaced my meter with a new I-210+c SmartMeter from Itron, Inc. (ITRI) to support net metering.  I don’t know what this cost the utility, but it was probably not significant as a percentage of system cost, likely only a few pennies per watt.

Itron makes a full range of electric meters, and was more popular with clean energy investors when residential smart grid was a greater focus of attention than it is today.  Hansen has owned it in the past, but does not currently.  Moser says the stock does not interest him because its stock performance is “as lumpy as its sales.”

Installer, Balance of System

The remaining approximately 40% or $1.60/W of the system cost was overhead, labor, equipment rental, permitting, and components such as racking (Unirac). wiring, and flashings (QuickMount) which are made by privately held companies.  My installer is a local privately held company, Solar Generation.

Conclusion

If you have a strong opinion about the advantages of microinverters vs. string inverters, or think that t
he growing interest in grid resilience may allow SMA to reverse some of its recent losses, there will likely be stock market profits to be made by betting on one of these trends, but I don’t have the confidence to put my own money on one or the other.  While my own strong preference is the added resilience, companies selling solar leases or power purchase agreements are only paid for producing energy, not for the resilience SMA’s products bring.  But the recent trend away from leases and towards other forms of solar financing may allow more homeowners to opt for resilience over maximizing production, as I did.

Of the others, only ABB is in my own portfolio, as it has been for years.  Like Schalkwijk, I like the valuation, dividend stream and solid position in many aspects of the electric grid.

Even ABB’s dividend stream does not come close to matching the income stream (in the form of lower electricity bills) of my solar system itself.  Sometimes an industry’s products are far better investments than the industry itself. For me, the lesson of this whole exercise is that companies which invest in solar installations are likely to be better investments than the companies that provide the parts.

Disclosure: Long ABB.

DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results.  This article contains the current opinions of the author and such opinions are subject to change without notice.  This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.  Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

The post One Solar Installation, Five Stocks appeared first on Alternative Energy Stocks.

by Joseph McCabe, PE

Walking into the 2014 Intersolar North America San Francisco exhibit it became apparent there was a story embedded in the products and services displayed on the three different floors of the Moscone Center West. The third floor of the exhibits was dominated by PV structure companies which have entered into a competitive blood bath since our last report. Dominating the first floor were Chinese PV manufacturers Jinko Solar (NYSE: JKS), Canadian Solar (NYSE: CSIQ), Trina Solar (NYSE: TSL) and Yingli (NYSE: YGE) all sharing the center exhibit space. Although Chinese solar is a popular topic due to newly imposed import duties, and the PV racking industry is highly competitive, the dominant story of this year’s event was storage which dominated both the conference and the second floor 2014 Intersolar NA exhibits. On-going storage side-sessions were held adjacent to the storage focused exhibits.

Storage Role in the PV Industry

Storage has become such a hot topic because consumer, commercial, industrial and utility PV installations can now benefit from electrical storage. Storage is important for maintaining consistent electrical output from PV due to clouds; enables PV systems to store energy in the morning for dispatching during later hours of the day when the sun has gone down, when the electricity is more valuable; and allows for other high value grid related support functions.

Storage is becoming more prevalent in today’s PV industry for at least two reasons: 1. Because of lower PV installation costs, there are more and more PV installations. Higher amounts of PV, and a higher percentage of PV on the grid requires storage to smooth out drops in PV power output due to clouds, called intermittency (especially important in isolated grids with lots of PV such as in Hawaii).   2. Lower electrical storage costs from batteries, driven by the electric automotive industry, are enabling lower costs and more functionality for PV combined with electrical storage. These factors combined with the now available advanced functionality from PV inverters are opening up new markets for storage. New policies, new electrical tariffs (the way utilities charge customers) and new storage use cases are creating profits for both the PV industry and the utilities. There are many different types of electrical storage which are used for different reasons, some of which are discussed in a previous article. The different kinds of storage will play out in the industry for their particular functionality, cost advantages and reliability.

Electrical storage requires integration with inverters; in a PV system an inverter with storage produces a more complete, reliable energy solution. Big industrial electronics players like ABB (NYSE: ABB, formerly Power-One inverters), EATON (NYSE: ETN), TMEIC, Bonfiglioli, Advanced Energy (NASDAQ: AEIS) and Solectria Renewables were exhibiting larger and larger inverter solutions including ones integrated with storage.

There were inverter company exhibits from Outback Power, SolarEdge, Chint Power and Magnum Energy. Kaco, Fronius and SMA (XETRA: S92.DE) have announced US consumer grid tied inverters integrated with electrical storage, similar to those currently offered in Europe. Those companies did not have exhibits but SMA did have a van parked outside displaying their smaller technologies.

Storage companies like Bosch Energy Storage, JuiceBox Energy, Ideal Power (NASDAQ: IPWR), Princeton Power Systems, Energy Toolbase, Sonnenbatterie GmbH, Hoppecke, Rolls Battery of New England, S&C Electric Company, VARTA Storage, American Vanadium (CVE: AVC.V) and Stem filled up a major portion of the second floor exhibit space.

Aquion Energy 7 kW, 22 kWh (at 20 hours and 30 degrees C) pallet of storage weighs 3,175 lbs and has a more than 3,000 cycle life. This particular technology doesn’t have chemical fire safety issues inherent with other technologies.

Vanadium redox batteries were discussed in sessions and displayed at this years exhibit. Vanadium redox is an interesting storage technology because in addition to the fast response time for dispatching electricity, it has an end of life value; vanadium is used for strengthening steel for rebar and other stronger, lighter materials when converted to ferrovanadium for use as a steel additive.

Many policies are driving storage including California’s AB514, Self Generation Incentive Program, and Electric Program Investment Charge, ConEd’s Demand Management, NYSERDA PV Incentive and Reforming the Energy Vision, Massachusetts Community Resiliency Technical Assistance, New Jersey Storage Incentive, and Rule 21. If storage is positioned correctly with PV it can obtain the federal investment tax credit (ITC). Storage projects are beginning to be implemented with request for offers (RFO) and request for proposals (RFP) for storage at Hawaiian Electric Company (HECO), Southern California Public Power Authority (SCPPA), Southern California Edison (SCE) and Long Island Power Authority (LIPA).

Valuing Storage, Rule 21

What wasn’t being discussed very much at the 2014 Intersolar meeting and relates directly to storage was Rule 21.  Rule 21 is the new utility tariff in California which will be driving the values from/for these electronics and storage solutions. July 18th 2014 is the current deadline for submission of new Rule 21 tariffs by the California Investor O
wned Utilities (IOUs) to the California Public Utilities Commission (CPUC). New functions including storage will be implemented, and paid for by these new tariffs.

The proposed first seven functions to be implemented by Rule 21 are Anti-Islanding Protection, Low and High Voltage Ride-Through, Low and High Frequency Ride-Through, Dynamic Volt-Var Operation, Ramp Rates, Fixed Power Factor and Soft Start Reconnection. Some of these functions enable greater PV on the grid, while others provide higher values from PV systems to the grid. Benefits to the utility from, for example, distributed power factor correction (reactive power correction) include but are not limited to increasing available grid capacities, reducing grid losses, and decreasing grid congestion.  These functions help to set the stage for greater amounts of storage + PV on the grid. For example, Anti-Islanding Protection is needed if there are many storage units connected to PV systems. The communications for all these smart grid and advanced functions are being developed by industry players like SunSpec Alliance; communications are the second phase of Rule 21. Storage plays a dominant role in the third phase where scheduling of energy services will become implemented. All these phases will play out in California in the next few years.

Turn-key Storage Solutions

I particularly impressed by a company named Greensmith. They are currently a privately held company with a reported $14M private investment and offices in Maryland and California. The history of this company dates back to 2008 with software development. Finding it easier to do the front and back end hardware themselves they became a turnkey solution for grid support and energy storage. They have a chemistry-neutral battery management system which makes them relevant to the whole storage landscape. The functions being provided by Greensmith are finding utility markets with New Jersey’s PJM frequency response, New York’s energy arbitrage (example: pumped storage resources can arbitrage price by purchasing lower priced off-peak power and selling power during peak hours of the day along with demand management due to Indian Point shut down) and the previous mentioned California Rule 21 tariff. These functions also include ramp rate control, smoothing, peak shaving and capacity shifting. CEO John Jung provided a presentation to the sessions held at the Intercontinental. They have 30 systems installed at 9 utilities with experience in 8 batteries and 6 inverter technologies. The largest of which is a 20 MW turn-key system. Systems include a 500 kW / 1.5 MWh storage system in San Diego and EV Charge + PV in Brooklyn, NY and Honolulu, HI.

Conclusion

PV combined with storage is becoming more important in the PV industry because of lower costs and greater monetizable values for increased electrical services. Energy, demand, power factor and frequency response are just some of the utility values driving the increased attention for storage when combined with PV.  Turn-key system solutions that address specific use cases for storage will be driving the near-term markets for grid connected storage in the PV industry.

Disclosure: No positions. Photos were taken before exhibits opened.

Joseph McCabe is an international solar industry expert with over 20 years in the business. He is a Solar Energy Society Fellow, a Professional Engineer, and is a recognized expert in developing new business models for the industry including Community Solar Gardens and Utility Owned Inverters. McCabe has a Masters Degree in Nuclear and Energy Engineering and a Masters Degree of Business Administration.

Joe is a Contributing Editor to Alt Energy Stocks and can be reached at energy [no space] ideas at gmail dotcom

This article was first published on AltEnergyStocks.com.  Joe will attempt to answer any comments left on the original article [link].

The post The Story Is Storage appeared first on Alternative Energy Stocks.

By Harris Roen

A significant alternative energy investment theme with potential for growth over the next few years is offshore wind. This article looks at the promise of marine based wind, potential pitfalls, and names three investments that could benefit from large-scale offshore wind development that is likely coming.

The Potential of Offshore Wind

In 2011, the U.S. Department of Energy and the U.S. Department of Interior jointly published a national offshore wind strategy. According to the report, in areas with less than 100 feet of water the generating potential of offshore wind equals the entire generating capacity of the current U.S. electric system. If you include all of the potential offshore wind capacity, marine-based windmills could generate four times the current U.S. electrical demand!

A big plus is that some of the best offshore wind sites are near major population centers of New England, the mid-Atlantic, Gulf of Mexico and mid-Pacific coasts. The strategy estimates a deployable offshore resource that could generate 10 gigawatts of electricity in less than 10 years, at a cost of $0.10/kWh. This projection increases five-fold by 2020, to 54 gigawatts generated at $0.07/kWh. This would make offshore wind very competitive with both fossil fuel and renewable based generators.

So far, there have been two successful auctions of offshore wind leases in the U.S.in Virginia and Rhode Island. Together, these auctions have generated $5.4 million by the Bureau of Ocean Energy Management (BOEM), leasing out 277,369 acres that could generate gigawatts of clean power. The fact that these two auctions generated positive action is a very good sign. Accordingly, BOEM plans to auction off leases in New Jersey, Maryland and Massachusetts in 2014.

Offshore Wind Challenges

Pun intended, but there are some significant headwinds to successfully executing offshore wind in the U.S. and abroad. The farther off the coast you go, the stronger the wind speeds. However, this means deeper depths, which increases technical challenges. Even at a large scale, offshore wind costs more to build and maintain than its land-based counterpart.

Another limiting factor pointed out by PennEnergy Research is the shortage of suitable operation and maintenance vessels. In order to tug large payloads, secure offshore towers, lay cables and the like, you need costly specialty ships. The competition for these ships is especially acute because of the increase in new offshore oil and gas fields. Oil and gas can offer better prices to gain access to this limited specialized fleet.

Another concern is that federal tax credits favorable to wind are set to expire at the end of 2013. Though there is a real risk that these credits will dry up, I believe there is a good chance the tax credits will be extended. Developing domestic sources of clean energy is a white-hat issue for both parties. Even during the fierce budget battles at the tail end of the Great Recession of 2012, congress had the votes to extend the credit.

Offshore Wind Investment Strategies

Two companies and an Exchange Traded Funds (ETF) are worth a look at as investments in offshore wind. Keep an eye on price, though, given the current frothy condition of the market.

ABB Ltd. (ABB) is a Swiss company whose products and services include power transmission, distribution and power-plant automation. Its systems are key in addressing the challenges of constructing, transporting and connecting large, distant offshore wind platforms. As a result, ABB recently secured a large offshore wind order. ABB has solid earnings and growing annual sales, but looks overvalued at current trading levels in the mid 20s. This stock looks more like a buy in the mid to high teens.

Parker-Hannifin (PH) is a large, diversified industrial manufacturing company that has a wide array of products. Of interest here is that Parker-Hannifin is a key supplier of underwater high-voltage power cables. We believe it is well positioned to take advantage of the growth of offshore wind with its subsea power cables. This well run, profitable company has excellent cash flow, but seems overpriced at current trading levels. The stock would look more interesting if it traded back down in the low to mid 80s.

Since there are very few publically traded pure-play wind companies in the U.S., a good way to add wind to a portfolio is by investing in an alternative energy ETF. A good wind-oriented ETF is First Trust ISE Global Wind Energy Index Fund (FAN). Compared to other alternative energy ETFs, this fund has a relative low expense ratio and management fee structure. On the other hand, FAN has a high potential capital gains exposure. Though this fund has been beat up in the past, it has posted an astounding 74% return in the past 12 months.

Summary

Even though the price of solar photovoltaics continues to drop dramatically, wind power is still one of the most economical forms of clean energy. Though offshore wind is much more expensive to develop than its onshore cousin, the potential for large amount of steady generation cannot be ignored. The long-term clean energy investor would be wise to have a strategic position in this sector.

DISCLOSURE

Individuals involved with the Roen Financial Report and Swiftwood Press LLC do not own or control shares of any companies mentioned in this article. It is also possible that individuals may own or control shares of one or more of the underlying securities contained in the Mutual Funds or Exchange Traded Funds mentioned in this article. Any advice and/or recommendations made in this article are of a general nature and are not to be considered specific investment advice. Individuals should seek advice from their investment professional before making any important financial decisions. See Terms of Use for more information.

About the author

Harris Roen is Editor of the “ROEN FINANCIAL REPORT” by Swiftwood Press LLC, 82 Church Street, Suite 303, Burlington, VT 05401.
© Copyright 2010 Swiftwood Press LLC. All rights reserved; reprinting by permission only. For reprints please contact us at cservice@swiftwood.com. POSTMASTER: Send address changes to Roen Financial Report, 82 Church Street, Suite 303, Burlington, VT 05401. Application to Mail at Periodicals Postage Prices is Pending at Burlington VT and additional Mailing offices.
Remember to always consult with your investment professional before making important financial decisions.

The post Offshore Wind Investment Opportunities appeared first on Alternative Energy Stocks.

By Harris Roen

Knowing when to get in and out of a stock is critical to being a successful investor. This is especially true in the volatile alternative energy sector. The Roen Financial Report calculates a fair value range for each of the +/-250 alternative energy stocks that it tracks, so that investors can better understand a stocks relative value. Comparing the current stock price to the fair value range helps determine whether a stock is considered overvalued, undervalued, or at fair value.

Which stocks are good prospects for the future, and where should investors proceed with caution? This article looks at three stocks that the Roen Financial Report considers overvalued, and two ranked as undervalued.

Overvalued Alternative Energy Stocks

ABB (Ltd) (ABB)

ABB is a large Swiss-based company in the business of automating power, which makes it a key player in development of the smart grid. Though its stock has gained 20% since July 2010, there have been wide price fluctuations between then and now. For example, after July 2011 (when the ABB was considered above fair value to overvalued for four months), the stock dropped 39% over the next 3 months. Conversely, when ABB reached undervalued levels in both the second half of 2011, and thru spring of 2012, investors would have done well to buy it when it was trading in the $16 – $17/share range. Since the beginning of 2013 the stock has jumped back into the overvalued range, so holders of the stock may want to reconsider their position.

Tetra Tech, Inc. (TTEK)

Tetra Tech has gained over 20% since July 2010, but as with ABB, has not had straight-line increases. This environmental services company has solid sales and profitable earnings, but has been considered overvalued since the beginning of 2013. Its price has oscillated down ever since. Because its earnings per share (EPS) dropped in the most recent quarter, it remains at the top of its fair price range. I would still be cautious with this stock until it drops into the $15-$17 price level.

Google, Inc. (GOOG)

Many do not consider Google an alternative energy company, and surely, it is not at the core of Google’s business. Having said that, Google understands that its whole company is based on the use of electricity, and as a result, Google has taken a proactive approach to integrating clean energy in its electric consumption portfolio (for example, Google’s wind investments are up to $1 billion).

There is no doubt that Google’s stock price chart has been impressive. Despite continued stock price increases, as recently as a year ago we calculated that Google was still trading at reasonable value levels. Since then, however, Google has been inching toward the top of its fair value range. I would not be surprised if the stock price gives back some of its gains over medium term.

Undervalued Alternative Energy Stocks

IXYS Corp (IXYS)

IXYS is a Silicon Valley-based company that manufactures products that efficiently convert power into useable electricity. Its stock was considered overvalued until recently, but due to shifts in EPS estimates, EPS averages, price earnings (PE) averages and PE ranges, its fair value assignment improved. This put IXYS at the bottom of its fair value channel, which prompted us to add IXYS as a Paradigm Portfolio stock. We think it is likely that its price will appreciate from here.

Power One Inc (PWER)

Quanta Services is a major Texas-based specialty energy contractor in the smart grid sector. It’s stock graph has saw-toothed up nicely since September 2011 on growing sales and earnings reports (as an aside, the stock has doubled in price since 2009 and is worth ten-times what it was trading at in 2002). This stock has strong price momentum, but still remains near the bottom of its fair price channel. We believe the stock price could easily move up 25% from current levels.

Summary

We believe the adoption of energy alternatives is a growing trend that is here to stay. Though the stock market rarely acts rationally over the short term, long-term investors who pick stocks wisely have a greater chance of making profits. Skill in knowing when to get in and out of a stock will greatly benefit the savvy investor.

Harris Roen is Editor of the “ROEN FINANCIAL REPORT” by Swiftwood Press LLC, 82 Church Street, Suite 303, Burlington, VT 05401. © Copyright 2010 Swiftwood Press LLC. All rights reserved; reprinting by permission only. For reprints please contact us at cservice@swiftwood.com. POSTMASTER: Send address changes to Roen Financial Report, 82 Church Street, Suite 303, Burlington, VT 05401. Application to Mail at Periodicals Postage Prices is Pending at Burlington VT and additional Mailing offices.

Disclosure

Individuals involved with the Roen Financial Report and Swiftwood Press LLC do not own or control shares of any companies mentioned in this article, but it is possible that individuals may own or control shares of one or more of the underlying securities contained in the Mutual Funds or Exchange Traded Funds mentioned in this article. Any advice and/or recommendations made in this article are of a general nature and are not to be considered specific investment advice. Individuals should seek advice from their investment professional before making any important financial decisions. See Terms of Use for more information.

Remember to always consult with your investment professional before making important financial decisions.

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The post Three Overpriced Alternative Energy Stocks & Two Bargains appeared first on Alternative Energy Stocks.

James Montgomery

A pair of analyst reports issued last week came to roughly the same conclusion about the market for solar PV inverters: It’s getting crowded and complicated, with top incumbents facing challenges in maintaining near-term growth in an increasingly fragmented market.

Those PV inverter stalwarts will need to pursue more restructuring and mergers & acquisitions to stay atop the shifting and broadening customer base, addressing everything from tough-to-crack markets (e.g. China, Japan) and embracing newer technologies such as module-level power conversion, i.e. microinverters, say IMS Research and GTM Research. This consolidation has already started to play out: SMA (S92.DE) bought Chinese inverter maker Jiangsu Zeversolar New Energy in December 2012, and earlier this month Advanced Energy (AEIS) acquired REFUsol, a German maker of three-phase string solar PV inverters.

And Wednesday there was another M&A splash in solar PV inverters: Swiss machinery component conglomerate ABB Group (ABB) is acquiring No. 2 PV inverter company Power-One (PWER) for approximately $1 billion.

The $6.35/share cash consideration  which, including Power-One’s $266 million net cash, amounts to a 6.4× multiple on 2012 EBITDA and 13× on projected 2013 earnings  was a 57 percent premium to Power-One’s closing on April 19 and a 50 percent premium on its 90-day average stock price. (PWER’s stock already has shot up today and absorbed all of that premium.) The deal is expected to close in the second half of this year, and be accretive to earnings in the first year. Power-One will be slotted within ABB’s discrete automation and motion division, alongside power control and quality, industrial motion, and electric vehicle charging and components.

The solar PV inverter market is expected to grow 10 percent annually through 2021, say the companies, citing data from the International Energy Agency (IEA). IMS Research pegs it as a $7 billion market today and exceeding $9 billion in 2016, rising 14 percent annually through 2017. Within that, the inverter segment is “the most attractive and ‘intelligent’ part of the PV value chain,” the companies say.

Global PV inverter revenues. (Source: IMS Research/IHS)

Here’s what both sides gain from the deal:

ABB: Gains better access to the Americas region (USA, Canada, Central/South America). Power-One is active here and is targeting this as a key growth segment for 2013 at all levels, residential, commercial and utility. The company’s Trio (commercial) and Ultra (utility) inverters were recently UL-certified. Adding Power-One also gives ABB inroads into residential and commercial markets in Europe and worldwide beyond its traditional utility-scale focus, points out Cormac Gilligan, a lead analyst on IMS Research’s inverter team.

Jefferies analyst Scott Reynolds likens this deal to ABB’s 2012 acquisition of Thomas & Betts, which expanded its portfolio into low-voltage technology but also added 6,000 distribution points and wholesales in North America. Power-One “has a significantly larger sales and distribution footprint than ABB which will enable the combined entity to accelerate growth,” he writes in a research note.

Power-One: Gains access to ABB’s broader worldwide footprint for manufacturing and R&D capabilities, including in-house know-how of power electronics. It also can leverage ABB’s brand and background for “bankability” in securing access to finance, Gilligan says. ABB also cites its own strengths in the wind inverter sector, plus monitoring/control, infrastructure, and services.

As a combined entity, ABB and Power-One will still have to balance the trend of decreasing prices for PV inverters that will squeeze profits. And like everyone else they’ll have to secure inroads into emerging markets (Asia, Middle East, South America). Markets in Japan, China, and India in particular will be key: working with local suppliers and meeting each country’s unique requirements (e.g., JET certification in Japan) and price points.

To that end, M&A activity in the PV inverter market is likely only just getting started. ABB pursued this Power-One deal now because waiting for more clarity in market direction could very well lead to paying more, said Joe Hogan, ABB CEO, during an investor conference call. There are no midsize or large deals in ABB’s short-term pipeline, he noted, and emphasized that “you won’t see us ever do a solar panel deal” because “we’re not a machinery company at all.”

Some might question ABB’s long-term appetite for solar M&A given last fall’s backpedaling of investment CPV startup Greenvolts. But PV inverters are very much in the company’s wheelhouse of expertise in power electronics, power management and grid interactions, Hogan reiterated. Solar PV inverters have to interface with grids in diverse regions with unique technical and regulatory requirements, and “we know how to do that. It’s in our DNA,” he said.

Jim Montgomery is Associate Editor for RenewableEnergyWorld.com, covering the solar and wind beats. He previously was news editor for Solid State Technology and Photovoltaics World, and has covered semiconductor manufacturing and related industries, renewable energy and industrial lasers since 2003. His work has earned both internal awards and an Azbee Award from the American Society of Business Press Editors. Jim has 15 years of experience in producing websites and e-Newsletters in various technology.

This article was first published on RenewableEnergyWorld.com, and is reprinted with permission.

The post Solar PV Inverter Market Shakeout Continues With ABB and Power-One Deal appeared first on Alternative Energy Stocks.

Tom Konrad CFA

I guide my sister through the stock market, she guides me through the mountains.

Once a year, I give my sister stock trading advice.

Managing money is not her thing, so any more often and she’d likely lose interest, and not do anything.  With that constraint, I wait until there are a large number of stocks I think she should trade, and send he a list of trades, along with quantities and limit prices for her to enter “good ’til canceled.”

Last May, I told her to buy 10 green stocks, and wrote about the picks here. It’s been one of my most popular articles.  Even better, the picks have done spectacularly well.  As of Friday, February 8th, my sister had a 35% total return in nine months.  Readers who bought the stocks listed in the article with the suggested allocations had a 32% return over the same period.  Meanwhile, the S&P 500 has gained 16.6% and the Powershares Wilderhill Clean Energy ETF (NYSE:PBW) has gained only 8.6%.  I’ll explain the differences between my sister’s returns and those of readers below.

Last week, I gave her my recommendations for 2013.  I told her to sell two of her holdings and to buy seven other stocks.  I’ll also discuss the sells below, and I’ll write about the buys in a follow-up article.

Many Happy Returns

Since I told her to enter limit orders, not all of my sister’s trades executed.  The red bars in the chart above represent her actual allocations to particular stocks.  In contrast, the blue bars are the target allocations I told readers to use.   The yellow bars are the returns my sister would have achieved if her orders had executed at the limit prices I gave her.  Some of her orders did not execute because her broker (USAA) does not accept trades for Toronto-listed stocks, others did not execute because the limit prices were never met.  I did not know that USAA would not let her trade Canadian stocks when I gave her my recommendations.

The green bars represent the total return from the closing price on May 22nd, the day the article was published.

One other difference is that I told my sister to buy Exide Technologies (NASD:XIDE) while I told readers to buy Waterfurnace Renewable Energy (TSX:WFI / OTC:WFIFF.)  This is because, after I sent the email to my sister, I decided Waterfurnace was a better pick for her conservative portfolio, since it pays a healthy dividend, while Exide is more of a turnaround play.  In the end, that made little difference, since she left a “0″ off the quantity when she was entering her limit order for Exide, and ended up owning only a trivial amount of the stock.  If I’d told her to buy Waterfurnace, she wouldn’t have gotten any of it, since it trades in Toronto.  Readers would have done better with Exide in these first nine months (with more risk), but that’s just hindsight.

Two Sells

I told her to sell Potlatch Corp (NYSE:PCH) at $44, and the order executed on Friday.  I like Potlatch because this timber REIT is a leader in sustainable forestry, but the price rise has dropped the annual yield from 4.2% last May to 2.8% today.  I consider that a bit low for a non-preferred dividend in a low-growth stock.

I also told her to sell LSB Industries (NYSE:LXU) at $42.  The order has not executed yet.  If it does not execute, I’m not particularly worried.  As I said when I included it in my article Six More Clean Energy Stocks for 2013, the main reason I’m getting out of this stock is that it has become a bit less green since the company bought a working shale gas interest as a hedge against its exposure to the price of natural gas.   I think the stock will probably rise a bit more this year, but it’s no longer nearly as undervalued as it was last May, or even when I wrote about it at the start of January.  [Update: This order has now executed.  Since LXU has fallen below $40, the sell is looking like a good call.]

Holds

Because I’m trying to build up her stock portfolio one year at a time, I have a bias towards having her hold stocks that she already owns, so I would not have told her to sell any of the other stocks in the list, even the ones she ended up not buying.  In my personal portfolio, I’ve sold covered calls on ABB Group (NYSE:ABB), as well as on Potlatch and LSB.  The calls on PCH and LSB look likely to be exercised and take me out of my positions unless the stocks decline before the options expire.

I’m holding on to all my other positions in the list.

Conclusion

My sister told me she’d be keeping me on as an advisor for another year.  I probably should have warned her that past performance is not a guarantee of future results.  It would be too much to expect to beat the market by over 15% for two years running.  Fortunately, I’m quite optimistic about the potential for clean energy stocks in 2013, and I suspect even matching the PBW’s returns this year will allow me to comfortably keep my “job” as her unpaid, informal, once-a-year advisor.  Perhaps more importantly, she’ll keep me from getting lost when we go on our annual backpacking trip next fall.

Stay Tuned

I also told her to buy seven stocks not already in her portfolio.  Stay tuned for an updated article this week.  [Or, since this is a reprint, you can see an earlier version here.]

Disclosure: Long ABB, WM, PCH, WFIFF, NFYEF, LXU, AMRC, MXWL, WNDEF, KNDI, XIDE.

This article was first published on the author’s Forbes.com blog, Green Stocks on February 12th. 

DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results.  This article contains the current opinions of the author and such opinions are subject to change without notice.  This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.  Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

The post Two Green Stocks I Told My Sister to Sell appeared first on Alternative Energy Stocks.

Tom Konrad

In 2007, it seemed like clean energy was finally becoming mainstream.  Both candidates for the US Presidency accepted the need to act on global warming, even if they did not agree on the degree, and clean energy stocks were rising even faster than the broad stock market.

This article was first published on the author’s Forbes.com blog, Green Stocks on December 27th.

DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results.  This article contains the current opinions of the author and such opinions are subject to change without notice.  This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.  Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

The post A Clean Energy Inflection Point in 2013? The Best ETF to Play the Trend appeared first on Alternative Energy Stocks.