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Title:Alternative Energy Stocks: The Investor Resource for Investing in Alternative Energy Stocks
Alternative Energy Stocks: The Investor Resource for Investing in Alternative Energy Stocks HOME | ALL STOCKS | MUTUAL FUNDS | ETFs | WIND | SOLAR | GEOTHERMAL | BIOFUEL | BATTERY | ENERGY EFFICIENCYa SMART GRID | EFFICIENT VEHICLES | ALTERNATIVE TRANSPORT | CLEANTECH NEWS | ADVERTISE | CONTACT | ABOUT May 05, 2014 Why Traffic Lights Are Turning Green For BioAmber Jim Lane As many technologies pivot or delay, one train keeps chugging on its route to biosuccinic acid, and markets like BDO, resins and polyols. What is it about the business model that keeps on working? What can every integrated biorefinery learn from its approach? In Minneapolis, BioAmber (BIOA) just announced a contract to supply a minimum of 80% of PTTMCC Biochemтs total bio-succinic acid needs until the end of 2017. PTTMCC Biochem is a joint venture established by Mitsubishi Chemical and PTT, Thailandтs largest oil and gas company, to produce and sell polybutylene succinate (PBS), a biodegradable plastic made from succinic acid and 1,4 butanediol (BDO). The JV partners are building a PBS plant in Map Ta Phut, Rayong, Thailand that will have an annual production capacity of 20,000 tons, and is expected to be operational in the first half of 2015. Now, letтs put this in context. According to NNFCC last year, the global market for succinic acid is between 30,000 and 50,000 tonnes per year. If this were mobile phones, itтd be like coming out of the box with a billion hand-set order. A single offtake deal, with a take-or-pay component, for something like one-fifth of global capacity? Huge. The PBS plant in Thailand will consume approximately 14,000 tons of succinic acid per year at full capacity т under the new agreement, BioAmber could supply a minimum of 11,200 tons of bioisuccinic acid if that PBS plant operates at full capacity. BioAmber plans to supply PTTMCC from its 30,000 ton per year plant under construction in Sarnia, Canada. Putting BioAmber into a larger context What is exactly so special about a company making roughly 65 million pounds of a little-known renewable chemical, with a historically tiny global market? After all, that is roughly equivalent, by tonnage, to a 10 million gallon first-gen biofuels plant т the kind that generally closes down these days because of a lack of economies of scale. There are two reasons that we are looking carefully at BioAmber. First, as former DOE Biomass Program Manager Paul Bryan opined at ABLC this year: тFocus on the right products first.т Bryan keyed in on biosuccinic in his ABLC presentation, highlighting the opportunities and advantages relating to the utilizing the oxygen in biomass. Second, BioAmber is avowedly pursuing a strategy based in careful aggregation of strategic partners that bring investment and offtake as well as financing relationships, while building further applications for their molecules in work with R amp;D partners that could be expected to translate into commercial partners down the line. Which is to say, starting with an economically and environmentally advantaged molecule and then working in partnership with downstream customers to establish markets for that molecule. Itтs very different than the conventional biobased fuels strategy, which has been to set mandates to create market certainty, and use that to create a favorable financing environment, and encourage engagement with incumbents. BioAmberтs first commercial plant in Sarnia: construction Moving back to BioAmber, letтs look at the construction timeline т which has shifted back 4-6 weeks. The companyтs first commercial has slipped into early 2015 unless the company can make up some time, which it indicates it might. BioAmber CEO Jean-FranУЇois Huc reports: тWeтve completed over 60% of the detailed engineering and are now focused on completing the detailed piping and electrical instrumentation workтІFor most for equipment purchases and work packagesтІweтre seeing bids there are coming in on or slightly below budgetтІgiving us an increasing confidence that we can bring the plant construction in on budget.т тTo date weтve lost approximately eight work days due to extreme cold and snow. Weтve also identified the potential for delays in a few key equipment deliveries. The current trend suggests that if we do not recover the lost days due to weather moving forward and weтre not able to mitigate the risks around the equipment delivery dates, the project completion could be delayed by up to four to six weeks.т Commissioning The commissioning period is estimated at five months т meaning that the plant could be operating in steady-state as soon as the end of the first half of 2015 т and BioAmberтs sales projections for 2015 are in line with that. Huc comments: тWhen you mechanically complete and you commission and startup your plant, realistically you anticipate a three to five month period, three months being aggressive and five months being more conservativeтІOur expectation is that the plant would be running in a continuous stable mode after five months andтІwe hope to sell about 45% of the nameplate capacity in the first year. BioAmberтs first commercial: customers The company, meanwhile, has been hard at work on bringing on customers. The combination of Vinmar and PTT contracts will tie up nearly two-thirds of the plantтs nameplate capacity in 2015, and the biosuccinic requirements of the Vinmar deal will more than use the full capacity of the Sarnia plant (though Sarnia can be expanded to as much as 50,000 metric tons). Huc added: тWe brought on 18 new customers in 2013 that will help to base load Sarnia and we worked with a number of companies to test our bio-succinic acid in new and emerging applications that offer the prospect of significant growth. New applications and markets The key for BioAmber to reach beyond the limited direct market for succinic acid is through the development of new markets т using low-cost biosuccinic. Huc comments: тOver the past year we worked with a number of innovative companies that validated our Bio-SA in several new applications. тFor example, in artificial leather they demonstrated that the polyester polyol made with Bio-SA offers better aesthetics including softer touch than the polyols made with adipic acid. This market reportedly consumes 150,000 tonnes of adipic acid annually. Another example is in foams made with Bio-SA and recycled PET. The Bio-SA provided performance benefits to the polyols that were made from recycled PET, including reduced viscosity, increased density and tensile strength, reduced brittleness and improved stability in addition to increased renewable content. These foams have been developed for a number of applications including insulation panels and the near-term market is estimated at 15,000 to 20,000 tonnes per year but with significant growth potential. тSeveral coatings companies have also demonstrated that resins and polyols made with the Bio-SA offer advantages over adipates in paints and coatings. These advantages include better gloss retention and higher renewable content. We now believe that the total addressable market for Bio-SA in coatings is approximately 600,000 tonnes per year. тOur goal is to sign supplier agreements with market innovators in these emerging market segments and to announce product launches incorporating Bio-SA over the coming year.т The future BDO plant Letтs look at BDO in some detail. As BioAmber explained at the time of its IPO: тSuccinic acid can be used to manufacture a wide variety of products used every day, including plastics, food additives and personal care products, and can also be used as a building block for a number of derivative chemicals. Today, petroleum-derived succinic acid is not used in many potential applications because of its relatively high production costs and selling price. We believe that our low-cost production capability and our development of next-generation bio-succinic derived products including 1,4 BDO, which is used to produce polyesters, plastics, spandex and other products, will provide us with access to a more than $10 billion market opportunity.т The Vinmar relationship. The BDO opportunity signaled in the IPO became more vivid early this year when Vinmar has committed to purchase, in a 15-year master off-take agreement, 100% of the BDO produced in a 100,000 ton per year capacity plant that BioAmber plans to build in North America and commission in 2017, Under the terms agreement, Vinmar also plans to invest in the BDO plant, taking a minority equity stake of at least 10%, and has a right of first refusal to invest in and secure 100% of the off-take from a second BDO plant. More on Vinmar. Vinmar has been selling close to 50,000 tonnes of BDO per year for the past several years. Vinmar also has project development and financing expertise having helped several partners secure project financing by leveraging Vinmarтs banking relationships and the take-or-pay agreements that they sign. Pricing: Huc reports: тAt recent BDO prices and to give you a sense of those the global average price over the past three years was approximately $2,800 per metric tonne according Tecnon OrbiChem data, the annual sales from this plant would be approximately 280 million representing over 4 billion in revenues over the term of the contract.т Execution risk. Producing BDO from succinic at scale, at commercially feasible rates т well, thereтs work left to do. BioAmber reports that тweтre continuing to work with our exclusive partner Evonik to scale up and commercialize the catalysts we have licensed from DuPont (DD).т The timeline: Huc comments, тWeтve begun the site selection process in North America, building on the site selection process we had run a few years ago for Sarnia a lot, as you can imagine the front-end of this BDO plant itтs just a big succinic acid plant, so most of our requirements in terms of site selection are identical to those we used in finally choosing SarniaтІin parallel weтll be working to see what kind of government support we can secure for that project so, that has to dovetail with a toll manufacturing facility coming online in the U.S. and a successful startup of the Sarnia plant and ideally all those things come together in the summer of 2015 so that weтre in a position to move to a financial close with a group of lenders and equity partners. Cash burn The company reports: тOur goal is to keep our cash burn under 20 million in 2014 while spending more money on BDO development and engineering for the remainder of this year as we prepare to bring the BDO toll manufacturing facility online next year.т The company has $83.7 million cash in hand, after reporting a net loss for 2013 of $33M, after a $39M loss in 2012. PTT and Myriant Weтll be watching that 2017 date carefully, for another reason. It may well suggest a completion date for a biosuccinic acid plant that PTT has been investigating with Myriant. PTT has, since January 2011, been a high-visibility strategic investor in Myriant, putting $60M in the company a few years back т and avowedly the companies have been signaling interest in PBS. Reaction from BioAmber on the PTT deal тThis first succinic acid take-or-pay agreement is an important milestone for BioAmber,т said Babette Pettersen, BioAmberтs Chief Commercial Officer. тThis contract guarantees significant sales volume for our Sarnia plant during its first three years of operation. PTTMCC is a major new buyer of bio-succinic acid and locking up this substantial volume commitment will strengthen our market leadership,т she added. Jim Lane is editor and publisher of Biofuels Digest where this article was originally published. Biofuels Digest is the most widely read Biofuels daily read by 14,000+ organizations. Subscribe here. Posted by Guest Contributor at 09:00 AM | Why Traffic Lights Are Turning Green For BioAmber | Comments (0) advertise here May 04, 2014 Ten Clean Energy Stocks For 2014: May Update Tom Konrad CFA April showers fell on both the broad market and clean energy stocks last month, but my picks weathered the storm relatively well. My clean energy benchmark (PBW) was down 5.9% since the last update, and my broad market benchmark (IWM) fell 1.7%. Meanwhile 10 Clean Energy Stocks for 2014 model portfolio also fell 1.7%. For the year so far, the clean energy benchmark is up 4.5%, having given back most of its large February gains, while the broad market is down 2.5%. My model portfolio is up 2.2%, having risen less than the benchmarks early in the year, but having given back much less over the last couple months. The six income oriented picks continue to outperform the four growth oriented picks (up 9% vs. down 8%), as is to be expected in this year's choppy market. Performance details can be seen in the following chart and the stock notes below. Individual Stock Notes (Current prices as of May 2nd, 2014. The "High Target" and "Low Target" represent my December predictions of the ranges within which these stocks would end the year, barring extraordinary events.) 1. Hannon Armstrong Sustainable Infrastructure (NYSE:HASI). 12/26/2013 Price: $13.85. Low Target: $13. High Target: $16. Annualized Dividend: $0.88. Current Price: $13.15. YTD Total US$ Return: -3.5% Sustainable Infrastructure REIT Hannon Armstrong fell in April as the market absorbed 5,750,000 additional shares of stock from a secondary offering priced at $13.00 at the end of the month, including the underwriters' full over-allotment option. The total raised was $74.75 million before deducting underwriting fees at a price slightly above the $12.50 IPO price from last year. Now that Hannon Armstrong has completed deployment of the funds raised in its IPO, secondary offerings will be necessary for the company to continue talking advantage of its many opportunities it has to invest in sustainable infrastructure projects. This offering is accretive to current shareholders, since the company's book value per share was $9.22 in the most recent quarter, and this will raise the book value (and equity invested) to a bit more than $10 per share by my calculation. Since HASI is able to sustain a dividend of $0.88 per share using $9.20 in equity, they should be able to increase that to around $1 per share as they deploy the money over the next two quarters. Considering that it took the company approximately a year to deploy the $167 million raised in the IPO, we should expect another secondary offering within six months. 2. PFB Corporation (TSX:PFB, OTC:PFBOF). 12/26/2013 Price: C$4.85. Low Target: C$4. High Target: C$6. Annualized Dividend: C$0.24. Current Price: C$5.75. YTD Total C$ Return: 19.8%. YTD Total US$ Return: 15.9% Green building company PFB announced its 2013 results in March, but I neglected to cover them in the last update. Revenue and Funds From Operations recovered somewhat from the depressed levels in 2012, while earnings were boosted greatly by a one-time gain from a sale-leaseback transaction of PFB's buildings. 3. Capstone Infrastructure Corp (TSX:CSE. OTC:MCQPF). 12/26/2013 Price: C$4.05. Low Target: C$3. High Target: C$5. Annualized Dividend: C$0.30. Current Price: C$4.06. YTD Total C$ Return: 18.6% . YTD Total US$ Return: 14.6% A number of analysts upgraded independent power producer Capstone Infrastructure's stock in response to the new power purchase agreement for its Cardinal plant which I wrote about last month. Four analysts now have a "Buy" rating on the stock, with three rating it "Hold." Their average price target is C$4.64. The company paid its regular quarterly dividend of C$0.075 on April 30th. 4. Primary Energy Recycling Corp (TSX:PRI, OTC:PENGF). 12/26/2013 Price: C$4.93. Low Target: C$4. High Target: C$7. Annualized Dividend: US$0.28. Current Price: C$5.49. YTD Total C$ Return: 12.5% . YTD Total US$ Return: 8.7% Waste heat recovery firm Primary Energy was also upgraded in response to its renewed Cokenergy contract, also discussed last month. Jacob Securities increased its rating from "Hold" to "Buy," although this change was in part due to the firm's lower expectations for returns for the overall market of Canadian stocks. The company announced its first quarterly dividend at the new US$0.07 per share rate payable to investors of record as of May 14th. Note that although the stock trades in Canada, all of its operations are in the US, so it reduces exchange rate risk by paying dividends in US dollars. 5. Accell Group (Amsterdam:ACCEL, OTC:ACGPF). 12/26/2013 Price: тЌ13.59. Annual Dividend тЌ0.55 Low Target: тЌ11.5. High Target: тЌ18. Current Price: тЌ14.41. YTD Total тЌ Return: 6.0% . YTD Total US$ Return: 6.2% Bicycle manufacturer and distributor Accell Group gave a sale update. Favorable weather helped European sales, but the cold winter hurt sales in the US. Parts and accessories sales growth was good, leaving overall revenues in line with previous guidance. The company's annual dividend was set at тЌ0.55, payable to shareholders as of the end of April. 6. New Flyer Industries (TSX:NFI, OTC:NFYEF). 12/26/2013 Price: C$10.57. Low Target: C$8. High Target: C$16. Annualized Dividend: C$0.585. Current Price: C$11.84. YTD Total C$ Return: 13.9% . YTD Total US$ Return: 10.1%. Leading transit bus manufacturer New Flyer announced its deliveries, orders and backlog for the first quarter. Financial results are scheduled for May 7th. The company delivered more buses and continued to refill its backlog as the industry recovers from its multi-year downturn. The first five of the company's new MiDiТЎ mid-sized buses entered production in the first quarter. 7. Ameresco, Inc. (NASD:AMRC). 12/26/2013 Price: $9.64. Low Target: $8. High Target: $16. No Dividend. Current Price: $6.27 YTD Total US$ Return: -35%. The stock of energy performance contracting firm Ameresco continued to decline in response to investor disappointment with forward guidance, as discussed in the last update. Company CEO George Sakellaris continues to take advantage of the depressed stock price to buy more of his company's stock. Although I consider this a long-term play, I added to my own position as well. 8. Power REIT (NYSE:PW). 12/26/2013 Price: $8.42. Low Target: $7. High Target: $20. Dividend currently suspended. Current Price: $9.25 YTD Total US$ Return: 9.9% Solar and rail real estate investment trust Power REIT closed on the previously announced purchase of 450 acres of land which will host a 60 MW solar farm in Kern County, California. The farm is expected to be completed this year. It also obtained a $26.2 million credit facility which should allow the refinancing of the bridge loans used to finance the last transaction. At the end of the month, Power REIT's board granted CEO David Lesser an exemption from the requirement that no individual may own more than 10% of the company's stock. The company's bylaws require such an exemption because Power REIT would no longer qualify as a REIT under IRS rules if the top 5 shareholders own 50% or more of outstanding stock. Since no other individual owns more than the 5% limit after which a holding would have to be reported, Power REIT is not at risk of losing its REIT status as long as Lesser's holding remains below 30%. Lesser told me that he wants the exemption so that he can continue buying the stock on the open market at what he believes are extremely depressed prices. I was personally deposed as a "non-party" in the company's ongoing civil case against the lessees of its rail asset, Norkfolk Southern Corporation (NYSE:NSC) and Wheeling and Lake Erie railway (WLE). The opposing attorney wasted a full four hours of everyone's time asking me about practically every email I had ever exchanged with company Lesser, the articles I've written, and the underlying documents I provided to her. As far as I could tell, the only things she managed to prove through the exercise were that my articles should not be a basis for the eventual ruling in the case (not that this was ever at issue), and that she does not mind wasting her clients' and Power REIT's money pursuing wild goose chases. Fortunately, it is my interpretation of the lease agreement that the lessees should be liable for both their own and Power REIT's legal expenses. Not that my opinion is relevant; that will depend on the judge or the terms of an eventual settlement. She did apologize for the rudeness of a server who showed up at my house 10pm to give me the summons, but not for wasting everyone's time. Of course, wasting everyone's time could be precisely what NSC and WLE want. 9. MiX Telematics Limited (NASD:MIXT). 12/26/2013 Price: $12.17. Low Target: $8. High Target: $25. No Dividend. Current Price: $10.65. YTD Total US$ Return: -12.5% Global provider of software as a service fleet and mobile asset management, MiX Telematics introduced its web reporting suite "DynaMiX" to Europeans at the Commercial Vehicle Show 2014. 10. Alterra Power Corp. (TSX:AXY, OTC:MGMXF). 12/26/2013 Price: C$0.28. Low Target: C$0.20. High Target: C$0.60. No Dividend. Current Price: C$0.31 YTD Total C$ Return: 10.7% . YTD Total US$ Return: 7.0%. Renewable energy developer and operator Alterra Power announced a joint venture with its partner on a number of previous projects, Fiera Axium Infrastructure. Alterra will own 51% of the project and oversee construction. Two Speculative Clean Energy Penny Stocks for 2014 Ram Power Corp (TSX:RPG, OTC:RAMPF) 12/26/2013 Price: C$0.08. Low Target: C$0.00. High Target: C$0.22. No Dividend. Current Price: C$0.07 YTD Total C$ Return: -12.5% . YTD Total US$ Return: -14.7%. Geothermal power developer Ram Power completed the sale of its Geysers Project to US Geothermal (NYSE:HTM.) The proceeds should help cover operating expenses while we await the results of the stabilization period and performance test of Ram's marquee San Jacinto-Tizate project. Depending on the results of that test, Ram may be eligible for distributions from the project. The test is expected to conclude on May 25th. Finavera Wind Energy (TSX-V:FVR, OTC:FNVRF). 12/26/2013 Price: C$0.075. Low Target: C$0.00. High Target: C$0.22. No Dividend. Current Price: C$0.125 YTD Total C$ Return: 66.7% . YTD Total US$ Return: 62.7%. Shares of wind project developer Finavera continued to appreciate slightly in response the completion of the assignment of its 184MW Miekle wind project to Pattern Energy Group (NASD:PEGI) which I discussed last month. Final Thoughts After the amazing run the stock markets had last year, it's not surprising that this year is more subdued. The summer months tend to be particularly weak ones for the markets. Hence I expect my safer picks to continue to do relatively well, and I am starting to increase the size of my market hedges. If I were to buy any of these stocks today, I'd be looking at Ram Power, because its performance is going to be all about the results of the geothermal capacity test due at the end of May, not about what the broad market is doing. While I'd be tempted to buy MiX Telematics and Ameresco at current prices, I would not want to do so without a market hedge, because I feel weak market conditions could easily drive either lower. Disclosure: Long HASI, PFB, CSE, ACCEL, NFI, PRI, AMRC, MIXT, PW, AXY, RPG, FVR, PEGI. 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. Posted by Tom Konrad at 09:46 AM | Permalink | Comments (0) May 03, 2014 Can Alternative Energy Mutual Funds and ETFs Continue to Beat the Market? By Harris Roen Alternative Energy Mutual Fund Returns Alternative energy mutual funds have proven to be an excellent investment over the past year or more, but those gains have flattened out as of late. MFs are up 33% on average with even the lowest returning fund, Gabelli SRI Green AAA (SRIGX), up 15% for the year. The alternative energy sector is by far beating the overall market. For comparison, as of April 21 the tech heavy NASDAQ was up around 27% for 12 months, the S amp;P 500 by 20%, and the Dow Jones Industrial Average only 13% Alternative Energy ETF Returns Green ETFs are posting excellent gains overall for the past 12 months, up 51% on average. As with MFs, quarterly returns are relatively flat, with the exception of nice gains in First Trust ISE-Revere Natural Gas Index Fund (FCG) and iPath Global Carbon ETN (GRN). An indication of how much the fortune of alternative energy ETFs have changed can be found by looking at long-term returns. Currently alternative energy ETFs are down 5.9% on average over a three-year time frame. Eight out of 14 funds, or a bit less than half, are trading down. Compare that with a year ago, when alternative energy ETFs were down 15.5% on average over a three-year time frame, with more than 70% of funds showing a loss. When looking at where annual returns were a year ago, about 40% of the alternative energy ETFs were down. On average the ETFs were flat for the year, as compared to the large one-year gains alternative energy ETFs are showing nowтІ 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 тROEN FINANCIAL REPORTт by Swiftwood Press LLC, 82 Church Street, Suite 303, Burlington, VT 05401. ТЉ Copyright 2010 Swiftwood Press LLC. All rights reserved; reprinting by permission only. For reprints please contact us at firstname.lastname@example.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. Posted by Harris Roen at 06:28 PM | Permalink | Comments (0) May 02, 2014 Can't Put Solar On Your House? Four Ways To Invest In Solar Leases Tom Konrad CFA Disclosure: I and my clients have long positions in HASI. I have sold NYLD $40 and $45 calls short. The secret sauce for bringing residential solar into the mainstream is the solar lease. With the simple value proposition of little or no money down and cost savings from day one, a homeowner does not have to be an environmentalist or green to be interested in the green of a solar lease. He or she simply needs to live in a state where the combination of annual sunshine and state incentives provide the economics to make solar leases profitable for the lender and installer. Low interest rates and the rapidly falling price of solar panels have rapidly expanded the number of states where solar leases are available in recent years, so much so that residential solar lease pioneer SolarCity (NASD:SCTY) grabbed 26% of the rapidly growing residential market in 2013. Of the top five residential solar installers on GTM Researchтs 2013 U.S. PV Leaderboard, four offer solar leases. Commercial solar leases were pioneered by SunEdison (NASD:SUNE) a decade ago, but they only began to transform the solar market place when SolarCity and competitors like SunRun and Vivint Solar began offering them to homeowners. Solar Gardens While the opportunity to take advantage of attractive solar economics is expanding rapidly to more states, not every home owner has a suitable unshaded roof. Those who want to democratize the solar opportunity usually favor community solar farms, also known as solar gardens. These structures allow community members to each buy a share of a larger central solar installation, receiving credits on their electric bill, as well as a proportional share of the tax benefits. Unfortunately, creating solar gardens requires specific state legislation or action by the local utility or utility regulatory commission, and the difficultly of making such rule changes means that solar gardens are available in far fewer locations and to fewer individuals than solar leases. Solar Crowdfunding Solar Mosaic is also working to democratize solar investment through crowdfunding. The company avoids the complexity of direct investment in solar farms by making loans to solar developers backed by a solar farmтs cash flow. It then offers pieces of loans to small investors though its crowd funding portal, taking a small cut of the interest to pay for its operations. While individuals can investment as little as $25, securities laws currently limit this opportunity to accreditied (i.e. wealthy) investors and residents of California and New York. In practice, an even greater limitation has been the lack of available projects, with only $5.6 million invested in 34MW of projects since the first investment in late 2012. That is approximately as much solar as 5,683 typical 6kW residential solar systems. Fortunately, the size and number of Solar Mosaicтs loans has been increasing. One particularly intriguing forthcoming project is the Mosaic Home Solar Loan in partnership with national installer RGS Energy (NASD:RSGE). I expect this product will appeal to Solar Mosaicтs investors, since it will finance residential systems. Financing solar for a homeowner will likely have more emotional appeal than financing a commercial installation on a convention center or school. Another crowdfunding site, SunFunder, enables individuals to invest in solar projects bringing power to the developing world. It offers interest-paying investments to accredited investors. Ordinary investors can participate with loans that earn repayment of principal as well as interest credits in the form of тImpact points.т Impact points cannot be withdrawn, but they can be re-invested in other projects. Solar Bonds It seems likely that it will be some time before Mosaic can get enough solar loans (residential or otherwise) into its system to satisfy investor demand. Until that happens, and until Mosaic is able to offer investments to ordinary investors nationwide, many will have to look elsewhere to invest in solar installations. One promising option on the horizon is bonds backed by solar leases. SolarCity was the first to issue such bonds, with a $54.4 million offering in November of last year. That offering was 71% backed by residential solar leases, with the balance backed by commercial solar. They followed this with a 87% residential $70 million offering which closed on April 10th. Like most green bond issues in recent months, SolarCityтs bonds were only available to institutional investors. SolarCity has little incentive to offer these bonds to small investors, because demand from institutional investors greatly exceeded supply. Another company likely to issue bonds partially backed by solar leases is Hannon Armstrong Sustainable Infrastructure (NYSE:HASI.) This REIT invests in a wide range of sustainable infrastructure, and then issues Sustainable Yield Bonds (SYBs) backed by these projects, but also keeps some on its balance sheet. Hannon Armstrongтs CEO, Jeffrey Eckel, told me in an interview that he believes Hannon Armstrong is unique in that it explicitly measures the climate emissions reduction associated with each project it invests in. The first $100 million round of SYBs, issued in December, invested in projects which reduced greenhouse gas emissions by 0.61 metric tons per $1,000 investment. That means a typical US-based investor with a carbon footprint of 17.6 metric tons per year could offset a yearтs worth of emissions with a $28,852 investment in the first tranche of SYBs. While that is far more than the cost of equivalent carbon offsets, such offsets are a cost, while SYBs are an investment which also pay a competitive 2.79% interest rate. Investors interested in funding solar leases should be interested in Hannon Armstrongтs future SYB rounds, since the company just signed two deals to fund solar leases. On April 16th, the company announced a deal to jointly originate and fund up to $100 million financing for distributed solar projects with Sol Systems. This followed the April 3rd announcement that the company had provided $42 million in debt to fund SunPower Corporationтs (NASD:SPWR) residential solar lease program. According to Eckel, solar leases tend to have a lower climate impact per dollar invested than most of it other investments, but the impact will be positive for both these investments. Solar Lease Stocks With bonds backed by solar leases mostly being sold to institutional investors, stocks are probably the easiest way for individual investors to gain exposure to solar leases. Both SolarCity and Hannon Armstrong are retaining a portion of their solar leases on their own balance sheets. By far the purest exposure to solar leases will come from industry leader SolarCity, while Hannon Armstrongтs exposure to renewable energy projects will always remain below 25%, since this is a requirement of its REIT status. SolarCity had deployed approximately 380 MW of solar through the end of March. With a market capitalization of $5.28 billion, that means each $14 dollars invested in SCTY was backed by 1 watt of a solar lease. In other words, if youтre thinking of investing in SolarCity stock as an alternative to putting solar on your roof, youтre essentially paying $14 a watt. That is far more expensive than any installation SolarCity has installed. The typical cost per watt for a residential solar system in California was $5.75 in the fourth quarter of 2013. While Hannon Armstrong has funded far fewer solar systems, the two deals for $142 million described above should account for about 15% to 20% of its future market capitalization. If the $42 million for SunPower comes in at $6 per watt, and the $100 million of distributed commercial systems cost $4 per watt, that will amount to a total of 32 MW of solar. As of the end of 2013, Hannon Armstrong had invested 32% of its capital (or $202 million) in clean energy projects, some of which would have been solar. If 20% of this was solar at $5 per watt, that would amount to another 40MW of solar. Putting this together, my best estimate is that each $10 to $20 invested in HASI will include funding for 1 watt of solar, as well as 5 or more watts of wind and geothermal projects and yet more energy efficiency. Unlike SolarCity, Hannon Armstrong is currently profitable and pays a 6.6% dividend yield at the current $13.34 stock price. Another yield-focused stock with some investments in solar leases is NRG Yield (NYSE:NYLD.) This company has a dividend yield of 3.1% at the current stock price of $42.50. The company owns a mix of thermal and renewable generation, with 34% of its generation from renewables in 2013. It owns 313 MW of mostly utility scale solar, and 101 MW of wind farms, and has a $2.09 billion market capitalization. Hence each $6.67 invested in NRG Yield funds 1 watt of utility scale solar and 1/3 of a watt of wind. Conclusion If you always wanted to own a solar system, but lack a suitable roof, a large and rapidly growing number of investments are now available. If your primary goal is attractive financial returns, the best investments are Solar Mosaic (4.4% to 7% yield) and Hannon Armstrong (6.6%.) Solar Mosaic investments have a number of downsides, such as the limited number of available projects, restriction to accredited investors and residents of New York and California, and the requirement that you hold your investments to maturity. While most of the money invested in Hannon Armstrong goes to fund types of sustainable infrastructure other than solar, each dollar funds approximately as much solar as a dollar invested in SolarCity, but also includes much larger investments in other types of clean energy and in energy efficiency. At $6.67 per solar watt, NRG Yield is the cheapest way to fund solar with a stock market investment, but this company includes considerable fossil generation and has a much lower yield (3.1%) than Hannon Armstrong. While none of these investments is perfect in its ability to replicate the economics and climate impact of putting solar on your home, the number of options is rapidly increasing. If you live in one of seven states (MA,CO, ME, RI, VT, WA,DE, OH) you may be able to invest in a solar garden. Until then, my top pick combining high climate impact with high yield and ease of investment is Hannon Armstrong Sustainable infrastructure. This article was first published on the author's Forbes.com blog, Green Stocks on April 21st. 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. Posted by Tom Konrad at 08:55 AM | Permalink | Comments (0) May 01, 2014 Mantra Energy: The Future of Portable Fuel Cell Technology? by Lee Shane When one thinks of fuel cells and fuel cell technology some names immediately come to mind. Ballard Power (BLDP) went public in 1993 and was listed on NASDAQ in 1995. A company that made its debut in 1997 was Plug Power (PLUG), a joint venture between DTE Energy and Mechanical Technology Inc. Hydrogenics (HYGS) is a company that has been around for 60 years, but more recently has gotten investor attention for their fuel cell technology. Most of the technology produced by well-known fuel cell companies share common featuresтІ They are based on fuel cell technology that requires hydrogen gas or a reformer that makes H2 out of the fossil fuel feed. They use a very expensive, very rare catalyst, Platinum. Portable fuel cells are based on fuel cell technology that requires a PEM, Proton Exchange polymer Membrane They have all enjoyed various levels of success, but the existing technology appears to be limited to heavy vehicles (buses / forklifts) and backup power systems for specific applications. The reality is that most of the existing fuel cell technology has never really reached the level of portability once imagined for fuel cells. However one new entrant in the fuel cell sector may be capable of regenerating some of the early initial excitement. They have eliminated the Achilles heel, the PEM membrane, the bipolar plates, and the platinum catalystтІ That company is Mantra Energy Alternatives (MVTG) based out of British Columbia. Recently MVTG has revealed their patented MRFC fuel cell. It is a "membrane-less" and "platinum-free" ultra-low cost fuel cell that appears to be totally unique in the market. As mentioned previously, the PEM membrane, the bi-polar plates, and the precious metals catalyst are among the most expensive and heavy parts of any fuel cell. The PEM Membrane is also one of the degrading components of PEM fuel cells, so the MVTG MRFC fuel cell is expected to have a much longer operating life, because there is no membrane to degrade. MVTG claims to have eliminated about 2/3rds of the cost of a typical PEM style fuel cell. We know the significant infrastructure challenges hydrogen gas still presents for widespread commercial deployment. It was recently reported that even now there may be less than 15 commercially accessible hydrogen fueling stations available in the U.S. But the MVTG-MRFC fuel cell does not require hydrogen gas. MVTG has eliminated the need for H2 gas feed in their MRFC fuel cells, and instead uses non-flamable liquid formates and formic acid as fuel. It is the H proton bonded to the back bone of a CO2-molecule (which is formic acid) that is the hydrogen fuel that the MVTG-MRFC fuel cell uses, and in that state, formate-formic acid, it is non-flammable, and is stored at ambient pressure and temperature. The MVTG fuel cell also does not require an expensive, energy consuming, bulky, and heavy reformer like other fuel cells use to handle direct fossil fuel feeds. The technology is the result of an impressive R amp;D collaboration from multiple Universities located in Canada, Japan, and the U.S. The potential of this new fuel cell technology makes it worthy of acknowledgment. Lee Shane works in information technology for a Fortune 500 company, and is an individual investor with over 20 years experience. His focus is on small to mid size technology companies that have the potential to be disruptive, or offer benefits to the sectors they are targeting that legacy technology may not currently provide. He has a strong interest in green building concepts and alternative energy and looks for hands-on opportunities in those areas Posted by Guest Contributor at 09:25 AM | Mantra Energy: The Future of Portable Fuel Cell Technology? | Comments (0) April 30, 2014 Beijing Taking Hands-Off Approach To Solar Recovery by Doug Young China sent an important message to the struggling solar panel sector last week when one of the countryтs major manufacturers was forced to turn to global capital markets to raise new funds, hinting that it couldnтt receive the money from state-backed domestic sources. The move sparked a sell-off for New York-listed shares of Yingli Green Energy (NYSE: YGE), as its request for funds met with a frosty response on Wall Street. The fact that Yingli had to seek funding from commercial-oriented western investors indicates Beijing is taking a hands-off approach to financing for this important but embattled industry as it tries to emerge from a 3 year slump. Chinese leaders should continue to send similar signals not only for the solar sector but also other key industries, in a broader effort to wean them from state support and create sustainable companies that can become global leaders. Yingli hasnтt posted a profit for more than 2 years, and reported a net loss of $128 million in its most recent reporting quarter. The company and most of its peers have been losing money since 2011, when the industry tumbled into the red due to overcapacity. The downturn caused many firms to go bankrupt, with former giants Suntech (OTC: STPFQ) and LDK Solar (OTC: LDKSY) as the 2 most prominent examples in China. In the meantime, the financial position of surviving players like Yingli remains weak as prices finally start to rebound. To shore up its position, Yingli turned to Wall Street last week to raise a relatively modest $83 million through the issue of new American Depositary Shares (ADSs) in New York where its stock is currently traded. The company ultimately sold the shares for $3.50 each, or more than 20 percent below its stock price when it first announced the plan. (company announcement) The need for such a big discount reflected ongoing investor concern about both Yingli and broader prospects for the solar sectorтs recovery. Announcement of the discount sparked a sell-off in Yingliтs shares, which tumbled 18 percent in the 3 trading days after the plan was first announced, wiping out around $100 million in shareholder value. Yingliтs decision to tap western markets for its fund raising followed two similar earlier developments that showed Beijing was taking a more hands-off approach to the solar panel sector in the uphill climb from its downturn. The first of those came in February, when Canadian Solar (Nasdaq: CSIQ) announced plans to issue new stock and bonds to raise $200 million. That announcement sparked a smaller 8 percent sell-off in Canadian Solarтs shares as investors also greeted the plan with limited enthusiasm, even though the company is one of the few to recently return to profitability. The second sign of Beijingтs laissez faire approach came last month when mid-sized panel maker Chaori Solar (shenzhen: 002506) missed an interest payment on some of it domestic bonds, becoming the first default on such domestic corporate debt in modern Chinese history. Many viewed that move as a sign that China was preparing to allow similar defaults on corporate debt, and abandon its past practice of sending in state-run entities to rescue such companies. In all 3 cases, it would have been quite easy for Beijing or local governments to come to the assistance of Canadian Solar, Chaori and Yingli. Officials could have provided critical assistance in a number of ways, such as ordering local state-run banks to make low-interest loans or calling on other state-run entities to provide funding. But in each instance, the government has shown a determination to let market forces dictate developments, even if that meant wiping out millions of dollars in investor value or shaking the domestic corporate bond market by signaling the potential for more defaults. Such actions may cause some pain in the short term for companies, their investors and local economies, but will help to create a profitable, sector that can be commercially viable over the longer term. Beijing should extend this market-oriented approach to other sectors that are also struggling with overcapacity, such as steel and aluminum, which would help to build commercially viable industries over the longer term. In place of direct financing, it could gradually introduce less aggressive, more western-style incentives like tax breaks to foster growth in sectors it wants to develop. Such an approach will inevitably create some pain for the affected sectors, forcing plant closures and lost investment dollars. But over the long run it will put Chinaтs economy on a sounder footing to ensure healthy sustainable growth. Bottom line: Yingliтs move to raise capital in New York signals Beijing will take a laissez faire approach to the solar sector as it claws its way back to health.Doug Young has lived and worked in China for 15 years, much of that as a journalist for Reuters writing about Chinese companies. He currently lives in Shanghai where he teaches financial journalism at Fudan University. He writes daily on his blog, YoungТДs China Business Blog, commenting on the latest developments at Chinese companies listed in the US, China and Hong Kong. He is also author of a new book about the media in China, The Party Line: How The Media Dictates Public Opinion in Modern China. Posted by Doug Young at 09:11 AM | Beijing Taking Hands-Off Approach To Solar Recovery | Comments (0) April 29, 2014 Kandi: The World's Greatest Non-Candy Company Ed. Note: This article was first published as an instablog by 'Illuminati Investments' on Seeking Alpha, and was intended as an April Fool's joke post. I found it very funny. Kandi advocates may not. Wouldn't it be nice to invest in the best business in the world? Now, I don't want to hyperbolize, but I believe I have uncovered the greatest investment opportunity in the history of the universe. This perfect company goes by the sweet name of Kandi Technologies (KNDI). Now, I know what you're probably thinking: "Mmm, candy..." If this is the case, you're either A) Homer Simpson, or B) Hungry. Why are you still reading this? Go fix yourself a snack or grab some actual candy, because it's going to take a while to describe just how incredible this company is. Are you back? Good. Anyway, contrary to what you were probably thinking when on your candy break, the company Kandi is actually a manufacturer of Electric Vehicles in China. Now, wait just a minute, you ask out loud, causing your spouse, dog, or coworkers to look at you like a crazy person, "Isn't China irredeemably corrupt?" The answer, of course, is yes. But it's only their politicians. Oh, and some of their CEOs. So basically it's exactly the same as here in the good old US of A, except slightly less socialist. The main difference is that they have a much larger population than us, the US. Wikipedia, the main source of information for lazy writers like yours truly, estimates that they have over 1.3 billion people. That's billion, with a B. Or whatever letter of the alphabet that "billion" starts with in Chinese. But, no matter how you ignorantly translate it, this is a fairly large addressable market. If every man, woman, and child in China were to buy an electric vehicle, this could help solve global warming, assuming it is not a myth. An affordable electric vehicle, that is, not global warming, which is clearly a scientific theory, like Intelligent Design. All of these (except ID, which, unlike here, their backward education system doesn't allow them to teach) Kandi can help solve, perhaps mainly by causing a bit of a traffic jam, as many urban Chinese are not used to driving, especially the aforementioned children. But, no matter, Kandi has a solution to this problem as well, which will probably allow them to gain considerable market share in China, as well as in other progressive countries like California. This is a revolutionary CarShare program, where the vehicles are sold not directly to consumers, but rather to cities, which will then rent them out of high tech garages to make them more accessible to the masses. Especially the aforementioned children, who will probably be the only ones capable of operating such an advanced technological system. Now, if you'll excuse me for a sec, I have to go ask my 6 year old nephew to show me how to cut and paste an image of the car sharing garage into this article... Ah, there we go. Wait a minute, buddy, how do I make it larger? I can't read it without my glasses! Come back here! Ah, never mind, it'll have to do, with the added benefit that the image of the car in the photo is now shown at actual size. What, you were expecting some big honking road hog like we drive here in the States to compensate for our physical and fiscal insecurity? No, the Kandi electric vehicle is perfectly sized for the Chinese market. Not because the people there are small, that would be presumptuous to presume, as well as possibly racist even though perhaps factually true. Except for Yao Ming, obviously, he probably wouldn't even be able to stand up in the garage, much less fit into the actual car. But anyway, to arrive at my point in a roundabout way, street smart pun intended, the space saving design of both the garage and car is perfect for China's crowded cities, where space is at a premium. Also, fresh air is at a premium as well, with smog approaching pea soup thickness in some cities. Or to use a more appropriate culinary analogy, egg drop soup thickness. Or egg drop soup with peas thickness, although I hate when restaurants ruin perfectly good egg drop soup with vegetables! Regardless, air/soup quality is a major problem that Kandi's product can help solve. Well, not the soup problem, as the electric motor on these cars is not quite powerful enough to run a blender at a high enough speed to get the right consistency in a soup. But it does power these cars at speeds up to 30 mph, which is even faster when translated into kilometers per hour, or whatever unit of time the Chinese use. I believe it is the yuan, since after all, time is money in any language. So, assuming the exchange rate stays constant, you can cruise along in your Kandi EV at up to 48 km/yuan, which may or may not be the speed limit in China, but I'm too lazy to even bother looking it up on wikipedia. But won't driving at such a high speed drain the battery, leading to performance anxiety? Did I say performance anxiety? Sorry, Freudian slip, I meant range anxiety. Range anxiety, of course, is the fear that your battery might not have the juice to go all night long. Or day, if you're driving in the daytime, which come to think of it is probably much more likely and less of a double pun-tendre. But, having beaten around the bush long enough before reaching my climactic point (I've found the trick is to think about baseball), I will now reveal that Kandi's solution to this problem is a battery exchange system, shown as follows: This QBEX system, short for Quick Battery Exchange Xstem, quickly and easily swaps out a flaccid battery for a fully charged one, like electric Viagra. If this system looks familiar, it's probably because Tesla (TSLA) blatantly ripped it off for their own battery swap system. This is no surprise, given Elon Musk's history of stealing great ideas, for as everyone knows the Winklevoss twins really invented the Model S. But I wouldn't trust Tesla's Supercharger, a grandiosely named but clearly cheap knockoff product, since have you ever tried generic versions of Viagra? No, of course not, me neither. It was a rhetorical question, what are you implying? However, even though Kandi has had to put up with the corporate espionage of lesser electric vehicle manufacturers, they have managed to keep research and development spending in check. In fact, since completely overhauling their product lineup from their legacy ATV and go-cart business to become a global electric vehicle powerhouse, they have only spent several million dollars per year on R amp;D. Contrast this with the irresponsible wasting of several hundred million taxpayer dollars per year, which Tesla has dumped into boondoggles like R amp;D with not much to show for it, other than the greatest car of all time. But this is nothing compared to what Kandi has been able to achieve, not only an impressive lineup of small appliances/vehicles, but also all the impressive infrastructure to support them like smart parking garages and battery exchange systems. To imagine that Kandi has developed all this on a mere hundredth of the R amp;D spending, fills my mind with wonder until it strains the credulity of my tiny brain. But of course this can be easily explained when you consider that unlike me, Kandi's founder and CEO, Xiaoming Hu, is a certified genius. Yes, he literally has a certificate, as you apparently can get any sort of official document drawn up in China for the right price. But, all kidding aside, which would have made this article quite a bit shorter and probably saved some eInk and eIQ points, the man must be brilliant to have built such an incredible company with so many innovative products on such low R amp;D spending. Apparently he retained some patents from his illustrious career as a government scientist, which he donated to Kandi pro-bono, which is Latin for "in exchange for a majority stake". These decades old patents laid the foundation for Kandi's impressive lineup of EVs, which may be why most of them look somewhat like a Yugo from the early '90s. But say what you will about aesthetic styling, Hu was ahead of his time. You might say he was first, well ahead of when Tesla got into the game. Hu was first, and with his design, the battery responds with power in a second. I'm not sure even Tesla can match that acceleration, and I can't even name the third place finisher in this contest. So to recap: Hu's on first. Watts are second. I Don't Know's in third. So in conclusion, Kandi Technologies has developed a cutting edge product for a huge market at a very low cost, which is the holy grail of business. And you can buy a share of this company and own 100% of Continental Development Limited, which owns 100% of Zhejiang Kandi Vehicles, which owns 30% of Jinhua Three Parties New Energy Vehicle Services Company and 50% of Zhejiang Kandi Electric Vehicles, which owns 100% of Kandi Electric Vehicles and 19% of Zhejiang ZouZhongYou Electric Vehicle Service, where Zhejiang Kandi Vehicles owns 100% of Yongkang Scrou Electric, 90% of Kandi Electric Vehicles and 50% of Jinhua Kandi New Energy Vehicles, which also owns 10% of Kandi Electric Vehicles. Obviously, this labyrinthine corporate structure is for the benefit of shareholders, to get around Chinese ownership laws, allow them to more easily form lucrative joint ventures, and/or to save on taxes, or something similar that sounds good in SEC filings, when they actually bother to disclose relevant things like that in them. But hey, that's just a minor issue when you own the greatest company in the world. I'm sure their impending massive profits will eventually find their way back into your pocket. After all, you're certainly not a fool for reading this story today and wanting to buy the stock, so the joke's on those who merely laugh at this article and miss out on these April showers of profits. Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. Posted by Guest Contributor at 11:33 AM | Kandi: The World's Greatest Non-Candy Company | Comments (0) April 27, 2014 BYD Runs On Government Support Doug Young I gave quite a bit of attention a few days ago to US electric vehicle (EV) sensation Tesla (Nasdaq: TSLA), so itтs only fair that I follow up by writing about Chinaтs homegrown EV superstar BYD (OTC: BYDDF; HKEx: 1211; Shenzhen: 002594), which has just released quarterly results that look quite disappointing. The only things that look slightly encouraging in this latest report are the fact that billionaire investor Warren Buffett continues to hold onto his 10 percent stake in the company, which he bought in 2008, and that BYD remains profitable. But even the profits are due to strong support from Beijing, under its program to encourage clean-energy vehicle development. If I had to describe BYDтs recent performance in a single thought, I would say that this company is quite good at setting up pilot programs for its EVs but has difficulty translating those programs into big business. Over the last 3 years, BYD has announced a steady string of such pilot programs in a wide range of markets, from Western Europe to the US and Latin America, as well as in its home China market. But with only a few rare exceptions, we have yet to see any of these programs turn into the large orders that BYD will need to make its EV program viable over the longer term. All that said, letтs look more closely at BYDтs latest quarterly results that show its profit largely evaporated in the first 3 months of the year. The company reported a first-quarter net profit of about 12 million yuan, or just about $2 million, which was down 90 percent from a year earlier. (company announcement) Thatтs quite a tiny figure for a company whose revenue totaled nearly 12 billion yuan for the quarter, which also was down by a more modest 9 percent. BYD reported it received 98 million yuan in government grants during the quarter, meaning it almost certainly would have lost money without that support. Obviously we canтt directly subtract this amount from its total profit, but I do think itтs fair to say the company would have reported a loss of 50 million yuan or more without this government assistance. BYDтs Hong Kong-traded shares fell 2.8 percent before the report came out, though they regained some of that ground in the latest trading session on Friday. The stock has actually rallied quite a bit over the last year and a half, more than tripling since October 2012 on enthusiasm over the EV program. But I suspect this latest disappointing result could force investors to realize the companyтs electric dreams arenтt materializing as hoped, and could mark the beginning of a broader sell-off that could see the stock fall by a third or more over the next few months. BYD is in the difficult position of waiting for its EV business to start bearing fruit, as its older battery and traditional gas-powered car businesses show signs of aging. BYD has previously said it will leave the gas-powered car business altogether by 2015, as it sees the future in electric vehicles. In a bid to shore up its cash position, the company announced a major plan a year ago to raise up to $500 million by issuing new shares. (previous post) Iтve mostly written enthusiastically about BYD each time it announced a new EV pilot program, as such programs are a necessary first step for customers to test out the technology before placing bigger orders. But the fact that weтre seeing few major orders being placed up to 3 years later probably means that many of these pilot programs werenтt as smooth as BYD had hoped and perhaps the buyers didnтt like the technology. That certainly doesnтt bode well for the companyтs future, meaning BYD could be dependent on government assistance to support its bottom line for the rest of this year and quite possibly into 2015. Bottom line: BYDтs latest results show its EV sales arenтt accelerating as quickly as planned, and it will remain dependent on government subsidies to support its bottom line for the rest of this year. Doug Young has lived and worked in China for 15 years, much of that as a journalist for Reuters writing about Chinese companies. He currently lives in Shanghai where he teaches financial journalism at Fudan University. He writes daily on his blog, YoungТДs China Business Blog, commenting on the latest developments at Chinese companies listed in the US, China and Hong Kong. He is also author of a new book about the media in China, The Party Line: How The Media Dictates Public Opinion in Modern China. Posted by Doug Young at 06:08 PM | BYD Runs On Government Support | Comments (0) April 26, 2014 Unlocking Solar Energy's Value as an Asset Class James Montgomery 2014 is predicted to be a breakout year for solar financing, as the industry eagerly pursues finance innovations. Many of these methods aren't really new to other industries, but they are potentially game-changing when applied in the solar industry. Not all options are ready to step into the spotlight, though. Master limited partnerships (MLP) and real estate investment trusts (REIT) promise more attractive tax treatment than securitizations or yieldcos, but they require some heavy lifting and difficult decisions at the highest levels: MLPs need an act of Congress even for an infinitesimal language tweak to remove a legislative exclusion to solar and wind, while REITs involve a touchy reclassification of assets from the IRS that could have broader and undesirable tax consequences. Yet another model gaining traction is a more institutionalized version of crowdfunding, led by Mosaic (technically they call it "crowdsourcing"), but crowdfunding is awaiting more clarity from the Securities and Exchange Commission about what rules must apply. And so, while patiently waiting for Paleozoic movement out of Washington, the industry is turning its attention and anticipation toward ushering in two other new financing models: securitizations (converting an asset into something that is tradable, i.e., a security) and тyieldcos" (publicly traded companies created specifically around energy operating assets to produce cash flow and income). Their build-up actually began last year: in the fall SolarCity (SCTY) finally launched the first securitization of distributed-generation solar energy assets, with a pledge to do more and significantly larger ones in the coming quarters, and throughout 2013 several companies (NRG, Pattern, Transalta, Hannon Armstrong) spun off yieldcos with varying levels of renewable energy assets in their portfolios. These were NRG Yield (NYLD), Pattern Energy Group (PEGI), TransAlta Renewables (RNW.TO), and Hannon Armstrong Sustainable Infrastructure (HASI). Just weeks into 2014 we're already seeing an uptick in activity. While the industry awaits SolarCity's next securitization move, in the meantime the company has acquired Common Assets, which had been building up a Web-based platform for managing financial products (most especially renewable energy investments) for individual and institutional investors; the first SolarCity-backed products are expected to start rolling out by this summer. We're also hearing rumors of up to half a dozen other securitization deals working through the pipeline, referencing unidentified large players with long histories of building out projects т some names frequently invoked as potentially fitting those criteria include familiar residential-solar companies such as Vivint, Sunrun, Sungevity, and several others. On the yieldco front, in mid-February SunEdison announced plans for its own "yieldco" IPO aimed at unlocking more value within its solar energy assets. Pricing wasn't announced at press time, but earlier reports suggested it could generate a $300 million payday. SunPower also recently has been talking about doing a yieldco in a 2015 timeframe, likely to feature its 135-MW Quinto project and possibly its 120-MW Henrietta project. Others reportedly eyeing the yieldco model include Canadian Solar, Jinko Solar, and First Solar. What Capital Markets Can Do For Solar Companies What's coming together to bring these two financial innovations into the arena right now? Put simply, it's the confluence of plunging PV prices and blistering installation growth which are achieving a scale and maturity that outstrips the capacity of traditional tax-equity sources -- but it also means they can now entertain large-scale financial instruments, explains Joshua M. Pearce, Associate Professor at the Michigan Technological University's Open Sustainability Technology Lab, who recently published a study of solar securitizations. Look at it from a macro level: even conservative growth estimates for U.S. solar energy capacity additions point to 20 GW coming online by the time the investment tax credit (ITC) is planned to run out in 2017, notes NREL energy analyst Travis Lowder, author of another recent report. At an average of $3/W that's $60 billion in assets, of which a third or even half could generate securitizable cash streams for solar developers. Spin that equation around: a single $100 million securitization deal could support 72 MW of residential solar assets, 100 MW of small commercial solar, or 133 MW of larger commercial/industrial projects. Number of PV Systems (by Market Sector) Potentially Financeable Through a Single Securitization Transaction. Credit: NREL What does that mean for individual companies? In its 3Q13 financial results SunEdison calculated its current business model of building and selling solar projects yields about $0.74/Watt, but those assets' true value could jump as high as $1.97/W if the company could find ways to lower its cost of capital, apply various underwriting assumptions, and factor in residual value in power purchase agreements. That's a startling 2.6x increase in potential value creation that SunEdison thinks it can unlock, by choosing to hang onto its projects vs. simply selling them off. In its mid-February quarterly financial update the company revealed more value-creation calculations: it captured an additional $158 million during 4Q13 through those retained assets, with a resulting metric of "retained value per watt" at $2.02/W. By applying most of the 127-MW on its balance sheet with an estimated $257 million in "retained value" to its proposed yieldco, the company says, it now has sufficient scale to unlock the true value of those solar assets. The ability to lower the cost of capital deserves extra emphasis. SolarCity's securitization last fall had a 4.8 percent yield, only slightly higher than a 30-year fixed mortgage and with twice the payout on current 10-year treasury bonds, which is great for investors т but for the company it represented roughly half the cost of capital vs. what can be obtained currently for distributed solar PV financing, noted Rocky Mountain Institute's James Mandel. "This trend is transformative for the solar industry" because of how it can unlock so much more value and generate more returns, explained Patrick Jobin, Clean Technology Equity Research analyst with Credit Suisse. (Disclosure: SunEdison is one of his top picks specifically for that reason.) "We're probably in the first or second inning of the public capital markets appreciating what this does for the industry." Securitization vs. Yieldco: The Good, Bad, And Unknown Both securitization and yieldcos increase access to lower-cost financing by pooling solar assets into an investment vehicle, separating the more reassuring elements of them (payments from operating energy assets under a power contract) from the riskier ones (project development). Both of them promise returns, though yieldcos come as dividends that vary with the company's performance while securitizations are fixed-income meaning investors get locked-in payments for a set period. And most importantly to the solar industry, they offer a lower cost-of-capital compared to the usual funding sources: debt, tax equity, and sponsor equity. Generalized solar securitization transaction. Credit: NREL One key difference: yieldcos own both the energy producing assets and the contracts, which means they can monetize federal investment tax credits. An equity owner can't use power-purchase agreements to create a securitization and also take the tax benefits. The real challenge, says Yuri Horwitz, CEO of boutique financial services firm Sol Systems, will be building a yieldco that has income-producing assets that create tax liability, coupled with solar projects that have tax benefits. NRG's yieldco last year did that, and he thinks they have a leg up because of it. Moreover, yieldcos will go out into the market to compete aggressively with other options such as specialty financing that offer similar returns. The hope is that as yieldcos mature and more operating assets are added in their competitiveness will improve. Defining what assets are best securitized and best spun out into yieldcos exposes a gap that neither properly addresses. Larger projects are good candidates for yieldcos; securitizations typically involve residential solar assets. (An exception: MidAmerican used debt securities/project bonds for its 550-MW Topaz solar farm, as did NextEra (NEE) for its two 20-MW St. Clair solar projects in Canada.) In between is the commercial/industrial segment which presents a more complicated financing challenge. "[Securitizations and yieldcos] don't really work in the center," Horwitz said. A different class of securitizations, "collateralized loan obligations," are more applicable to the commercial sector where less diversity in assets means more risk in making ensuring offtakers' credit-worthiness, suggests NREL's Lowder. Something else that successful securitizations and yieldcos have in common: the more scale and diversity the better. But that's also a limiting factor: not everyone can pool a wide distributed portfolio of solar assets to mitigate risk, or a smaller portfolio of larger ones. And the more diverse it is, the harder it is to evaluate them as a whole, value them, and get underwritten. By definition, they require someone who can offer up a large pool of assets as de-risked and diversified as possible, and backed by a brand-name sponsor, pointed out Tim Short, VP of investment management at Capital Dynamics. "There's plenty in the wings that will never make it," he said. "There's not a whole lot of people to bring all the ingredients together." One other factor to account for in any solar-backed financial models is the externality of policy changes. While investors appreciate the value in a solar offtake contract, but they need to factor in potential risk of any retroactive policy changes, such as is on the table in the net metering debates raging in several states. If net metering policies end up being reduced or even repealed, "solar contracts may default and reducing predicted income streams," Pearce said. "Ensuring policy stability and communicating that stability to investors will be key to the on-going attractiveness of solar assets." The Need to Standardize What will be critically important as more of these financing innovations emerge, and more solar companies try to take advantage of their promise, is pinpointing ways to standardize how the process works, in specific areas and as a whole. "The number-one priority is standardization, especially moving forward with vastly more distributed-generation assets coming online, said Haresh Patel, CEO of Mercatus. That's the glue that will hold these offerings together with both developers and investors т and it needs to be embedded in developers' DNA from the very beginning, so their solar assets can be evaluated and bundled repeatedly and reliably. Addressing the databasing of solar asset performance metrics are NREL and SunSpec with their open-source OSPARC database. One "Gordian knot" issue: who owns the data and are they willing to share it? That pathway of data ownership can get muddled because not all issuers outright own their systems, and it gets worse by adding a tax equity layer. Figuring out that chain of data ownership protection and security is hugely important., notes Mike Mendelsohn, senior financial analyst at NREL. That's part of OSPARC: anonymizing and rolling up data into a friendly fashion so it's easy for solar companies to present to investors, and for them to digest. "We need to build confidence that those issues are adhered to," he said. Startup kWh Analytics is similarly targeting aggregation and benchmarking of information about solar asset performance, which is crucial because it tells institutional investors about the soundness of the collateral (the system and the leasee). What are individual PV panels and inverters doing compared with other options; are the customers with FICO scores in the 650-700 range paying off their bills? Developers also want to know how their chosen systems are performing comparatively т and increasingly so with the emergence of these new investment vehicles, where the developer retains those assets as a financing tool. Mercatus, meanwhile, wants to address the whole package, assessing everything from system components to permitting. "What entities look for is consistency for which they can reduce risk," said Haresh Patel, CEO of Mercatus, which is tackling that problem with its own platform: quickly process and synthesize projects' data so they can be more easily pooled for investors -- and in the same language project after project, especially as new assets come into the pool. Establishing a mechanism to organize this on a repeatable basis is "the biggest friction point," he said. Project summary view inside Mercatus' 2.0 тGolden Gate" platform. Credit: Mercatus Standardizing offtake contracts "is the best place to start as this problem impacts every step in the process," Pearce suggested. "Uniform contracts facilitate comparison, reducing asset evaluation costs and promotes pooling. They also simplify data collection and analysis. Uniform contracts will better facilitate data collection and analysis, asset comparisons and pooling, all of which means reducing costs. As part of SolarCity's securitization last fall, Standard amp; Poors (which rated it BBB+) revealed some interesting background info about the assets being offered, including an impressively high FICO score for residential system owners (and strong mostly investment-grade ratings for the nonresidential ones). There is no solar version of FICO scores, which took decades to become the standard for credit ratings and lending. Addressing this particular pain point is the truSolar Working Group, formed a year ago by 15 solar companies and organizations, trying to develop uniform standards similar to a credit score for measuring the risks associated with financing solar projects, explained Billy Parish, founder/president of Mosaic and a truSolar founding member. "Standardization will happen much sooner than people think," Patel said. "Standards drive velocity." He invoked the efforts of the DoE-NREL multi-year project Solar Access to Public Capital (SAPC), which folds in well over a hundred organizations with activities from standardized PPAs to installation techniques, "mock pools" of solar assets to rating agencies, and collecting performance data.at involving groups with touchpoints all along the solar energy chain from panel suppliers to banks. Message to the Masses As solar companies come around to how much extra value they can unlock, part of that process is coming up with new metrics to calculate that value potential, such as "net present value per watt" or "retained value per watt," and then educating investors who might persistently adhere to the traditional metrics like earnings per share. Issuers including SolarCity and SunEdison and the investment banks go out and do their part with investor roadshows, but also out in the field helping educate about solar asset-backed investments is SAPC is out pounding the pavement too, engaging both sell-side investment banks and buy-side capital market managers to get everyone more comfortable with how these vehicles will work. "We are now in a positive feedback loop," said Michigan's Pearce. "By successfully accessing lower-cost capital, the solar industry can fund high rates of growth in the future, continuing the current momentum of eliminating antiquated and polluting conventional electricity suppliers." 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. Posted by Guest Contributor at 09:23 AM | Unlocking Solar Energy's Value as an Asset Class | Comments (0) April 25, 2014 Tribulations of a Meter Reader by Debra Fiakas CFA Last week Badger Meter (BMI: NYSE) joined a building fraternity: companies reporting strong year-over-year sales growth, but delivering weaker than expected earnings. However, the Badger Meter actually increased earnings by a greater magnitude than it grew sales. The Company reported $83.5 million in net sales, representing 16.3% growth over the same quarter last year. Net income grew by 59.3% year-over-year to $4.6 million or $0.32 per share. As impressive as these results appear to be, the consensus had been for earnings per share of $0.41. The stock declined sharply as investor registered their displeasure with the short-fall. Badger Meter supplies flow measurement and control technologies products to industrial, commercial and utility customers around the world. The company is so much more than a simple meter reader supplier. Anybody who has a system through which fluids flow can benefit from Badgerтs wide range of flow control and metering products. The company is included in our Mothers of Invention Index of developers of energy efficiency and conservation technologies. The alternative energy and water industries are key beneficiaries of Badgerтs products. Like its peers in the water metering industry the Badger Meter struggled during the recent recession, but has managed to recover. In 2013, the Company reported record sales of $334 million, on which it earned $24.6 million in net income. Importantly, operations generated $34.8 million in cash. That represents a sales-to-cash conversion rate of 10.4% that helps support future growth and dividends for shareholders. BMI has been a part of the Crystal Equity Research coverage universe for some months. In our view, the sell-off of the stock was unjustified given the Companyтs actual performance. However, it is also the responsibility of management to provide sufficient guidance to publishing analysts so as to avoid egregiously high expectations. A new and clearly bearish sentiment began building in the shares several days before the earnings announcement. Most likely this bearish sentiment is company-specific and beyond the weakness observed in the broader U.S. equity market in recent weeks. A review of recent trading patterns in BMI reveals a so-called тdouble bottom breakdownт that occurred the week of April 14th. This chart pattern portends future weakness in the stock and investors should be concerned that stock could fall even further. Earlier this week we warned our research subscribers that although we were maintaining our Hold rating on BMI shares, even though the stock has declined into the a range in our trading guide where we would be whipping up new positions. Indeed, the stock appears to be oversold at the current price level. However, we noted that it would be a more prudent trading strategy to wait for some recovery in upward momentum before adding to positions. Unfortunately, our analysis suggests investors might have to wait a bit. One very helpful indicator is Moving Average Convergence/Divergence (MACD), which at this time suggests the stock could continue its march southward for several more trading sessions. Debra Fiakas is the Managing Director of Crystal Equity Research, an alternative research resource on small capitalization companies in selected industries. Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein. Posted by Debra Fiakas at 08:57 AM | Tribulations of a Meter Reader | Comments (0) April 24, 2014 Tesla CEO Makes Smooth Drive Into China Doug Young Tesla cruises into China I have to give my congratulations to new energy car maker Tesla (Nasdaq: TSLA) for creating the kind of buzz and excitement this week that only names like Apple (Nasdaq: AAPL) and smartphone sensation Xiaomi have typically been able to muster. In the last 2 days, the company and its charismatic founder Elon Musk were all over the Chinese headlines as Tesla delivered its first electric vehicles (EVs) in China on the sidelines of the nationтs biggest annual auto show happening this week in Beijing. Musk seems to have done interviews with nearly all of the major publications I regularly read, leading me to wonder if the man ever sleeps. But all joking aside, Tesla really has done an incredible job of launching its first vehicle sales in China. I honestly havenтt seen this kind of media frenzy and hype surrounding a product launch for at least a year or two, back when Apple was still at the height of coolness in China. Tesla has also made all the right moves in terms of associations, getting its name connected with a number of big-name companies, projects and people as Musk hinted his company could consider building a plant in China. All this buzz comes after a rocky start in China for the company, following a tussle with a trademark squatter and some initially difficulties getting its first shop set up in Beijing. Whatтs more, the company is at a slight disadvantage to domestic rivals like BYD (HKEx: 1211; Shenzhen: 002594; OTC:BYDDF) and Chery because its cars donтt quality for the generous subsidies being offered by Beijing to jump-start electric car sales. And yet despite all that, Tesla has managed to generate lots of buzz these last few months and has set an aggressive target of selling as many as 8,000 cars in China this year. It officially delivered the first of those this week, as it handed over the keys to 8 of its Model S electric cars to an A-list of high-profile buyers that included the president of the Lifan soccer team and the founder of Autohome (NYSE: ATHM), the nationтs leading car information website. (English article) Musk has also managed to get his companyтs name associated with a number of major Chinese companies as he tries to send the message that Tesla will support clean energy as it helps to build the necessary charging infrastructure to support EV development. According to the various reports, Teslaтs list of potential corporate partners runs the range from Sinopec (HKEx: 386; Shanghai: 600028), one of Chinaтs top oil refiners; to State Grid, operator of Chinaтs national electric grid; to JA Solar (Nasdaq: JASO), one of the nationтs leading makers of solar panels. Tesla discussed its potential local partnerships as it also revealed it is preparing to spend hundreds of millions of dollars to help to build charging stations to make electric vehicles practical in China. (English article) But perhaps most tantalizing to officials in Beijing was Muskтs hints that he could consider building an EV manufacturing plant in China, which could become the companyтs biggest global market as soon as next year. Clearly Musk has done his homework and is hitting on all the right notes in China to create a well-oiled campaign as he enters the market. Of course it also doesnтt hurt that Tesla has a very good product to sell, and that it has cultivated an image as a very environmentally friendly status symbol in this very status-conscious country. If it continues to play its cards right, which looks likely, the company could stand a very strong chance of selling at least 4,000 or 5,000 cars this year in China, making it one of the companyтs top global markets. Bottom line: Teslaтs China launch, accompanied by a well-crafted publicity blitz, could help the company sell up to 5,000 cars in the market this year. Doug Young has lived and worked in China for 15 years, much of that as a journalist for Reuters writing about Chinese companies. He currently lives in Shanghai where he teaches financial journalism at Fudan University. He writes daily on his blog, YoungТДs China Business Blog, commenting on the latest developments at Chinese companies listed in the US, China and Hong Kong. He is also author of a new book about the media in China, The Party Line: How The Media Dictates Public Opinion in Modern China. Posted by Doug Young at 04:41 PM | Tesla CEO Makes Smooth Drive Into China | Comments (0) April 21, 2014 Don't Bet Against SolarCity By Jeff Siegel DISCLOSURE: Long SCTY. It wasn't an April Fool's Day gag when I said it was time to buy SolarCity Corp. (NASDAQ: SCTY) at the beginning of the month. After a brief standstill, the company's battery-backed solar projects have begun to move forward again. The State of California Public Utilities Commission has added an important item to its May 15 agenda that will make a huge difference for SolarCity. Utility companies may finally be blocked from imposing big fees on battery-backed solar systems. For more than a year, California's largest utilities companies demanded that battery-solar systems undergo costly and time-consuming inspections to prevent them from тlaunderingт power they pulled off the grid. Non-battery solar systems were not a concern for the utility companies, because that energy could be unquestionably verified as solar in origin as it was fed back into the grid. Battery systems did not provide an equal degree of certainty. Each new battery-backed PV user had to submit an application to connect to the grid that cost $800 and required additional meters and hardware that cost as much as $3,700. Only a dozen of SolarCity's customers completed the application and approval process out of the more than 500 customers who had signed up. In March, SolarCity had had enough. It halted its applications for interconnections to Southern California Edison, Pacific Gas and Electric, and San Diego Gas and Electric. Now, the Public Utilities Commission seeks to exempt battery solar installations from these huge fees, so these customers can get their systems. SolarCity has resumed filing applications. The Threat to Utilities Energy companies expressed concern that solar batteries could store power from the grid rather than from solar panels, and feed it back into the grid for net metering billing reductions. Net metering is a system that allows residential solar users to send their unused solar energy back into the grid and roll their traditional electric bills backwards. With this type of system in place, people can install solar panels on their home and not really rely on them to power anything except the grid. Since solar batteries allow customers to store the power they generate, this means they can save their energy to use on themselves and not even have to participate in net metering if they don't want to. It essentially rearranges residential power priorities into a pyramid with solar on the top, solar battery as the backup, and traditional grid as the backup to the backup. Solar battery systems, therefore, threaten to slash customer reliance upon local power monopolies. SolarCity, however, isn't positioning itself as a threat. It wants to work with the power companies. In a blog posting entitled тPut Battery Storage in the Hands of Grid Operators,т SolarCity Co-founder and CTO Peter Rive said: тWhile cutting the cord enables one household to be 100% renewable and self-sufficient, it limits what these technologies can do. In short, the grid is a network, and where there are networks, there are network effects. When batteries are optimized across the grid, they can direct clean solar electricity where (and when) it is needed most, lowering costs for utilities and for all ratepayers. This is true of homeownersт behind-the-meter storage units, and itтs also true of larger commercial and utility-scale units.т Despite SolarCity's apparent goodwill toward power companies, the threat this technology poses to power companies is still strong. All in the Family SolarCity was co-founded by brothers Peter and Lyndon Rive, and they have a very important cousin: Elon Musk, CEO of Tesla Motors (NASDAQ: TSLA). Together, the family is pushing for a battery-powered future. In the automotive sector, batteries mean drivers do not have to rely upon costly gasoline to get around, and in the residential power sector, it means users don't have to rely upon energy monopolies. The combined effect of two battery-crazy companies in different sectors is a massive economy of scale. Tesla's so-called тgigafactoryт is going to produce enough lithium-ion batteries at such a high volume that prices will drop. Both Tesla and SolarCity will reap the rewards. The Gigafactory is not expected to be built until early 2017, and production ramping will not begin until 2020. It may be a long way off, but think of what can be done in the meantime. SolarCity has only existed for eight years, and it has grown in explosions. In the third quarter of 2013, it grabbed a 32 percent share of the solar installation market, and it expected to grow its number of installations by more than 80 percent in 2014. This means it could deploy upwards of 525 Megawatts of photovoltaic cells this year alone. Jeff Siegel is Editor of Energy and Capital, where this article was first published. Posted by Jeff Siegel at 12:45 PM | Don't Bet Against SolarCity | Comments (0) Next Page Site Sponsors Search This Site input Enter your search terms input input Web input AltEnergyStocks Submit search form input input input input input input input input input Share Us Tweet Subscribe to this Blog Enter your email address:Delivered by FeedBurner Subscribe by RSS Feed Categories About Biofuels Biodiesel Ethanol Biomass Biochemicals Waste-to-Energy Books, Reports, Webcasts Podcasts Clean Transportation Alternative Transportation Plug-in Vehicles Electric Grid Energy Efficiency Energy Storage Batteries Flywheel Hydrogen Environmental Markets Featured Companies Fuel Cell Geothermal Hydro Income Investments Industry General Interviews Microturbine Misc Mutual Fund ETF News Nuclear Ocean Power Peak Fossil Energy Policy Polls Pollution Control Portfolio Power Production Solar Solar Photovoltaic Solar Thermal Strategy Synthetic Fuels The Week in Cleantech Wind Archives May 2014 April 2014 March 2014 February 2014 January 2014 December 2013 November 2013 October 2013 September 2013 August 2013 July 2013 June 2013 May 2013 April 2013 March 2013 February 2013 January 2013 December 2012 November 2012 October 2012 September 2012 August 2012 July 2012 June 2012 May 2012 April 2012 March 2012 February 2012 January 2012 December 2011 November 2011 October 2011 September 2011 August 2011 July 2011 June 2011 May 2011 April 2011 March 2011 February 2011 January 2011 December 2010 November 2010 October 2010 September 2010 August 2010 July 2010 June 2010 May 2010 April 2010 March 2010 February 2010 January 2010 December 2009 November 2009 October 2009 September 2009 August 2009 July 2009 June 2009 May 2009 April 2009 March 2009 February 2009 January 2009 December 2008 November 2008 October 2008 September 2008 August 2008 July 2008 June 2008 May 2008 April 2008 March 2008 February 2008 January 2008 December 2007 November 2007 October 2007 September 2007 August 2007 July 2007 June 2007 May 2007 April 2007 March 2007 February 2007 January 2007 December 2006 November 2006 October 2006 September 2006 June 2006 May 2006 April 2006 March 2006 February 2006 January 2006 December 2005 November 2005 October 2005 September 2005 August 2005 July 2005 June 2005 May 2005 April 2005 March 2005 February 2005 January 2005 December 2004 November 2004 October 2004 September 2004 August 2004 July 2004 Certifications and Site Mentions Twitter Updates follow me on Twitter p Blogroll Green Stocks Clean Break Clean Energy Intel Clean Energy Wonk Cleantech News Climate Bonds EcoGeek Green Gold Knowledge Problem The Master Resource Report Technology Review Energy Todd Litman Mountain Town News Powered By MType 3.2 FN Zip GB MType 3.2 FAA Florist One


text:
November 20, 2014 – MDS Energy Development, LLC and sister company First Class Energy, LLC (http://www.firstclassenergy.net) are pleased to announce the purchase of their newest drilling rig from Schramm, Inc., a local, Pennsylvania based company. First Class Energy took delivery of the Schramm TXD in October. The rig is currently drilling its first hole close to MDS headquarters in Armstrong County, Pennsylvania before shipping out to Ohio for two years on a long term contract for a major operator.
"We are happy to announce the acquisition of our most recent drilling rig from Schraam" says MDS Energy Development and First Class Energy President and CEO Michael D. Snyder. "The new rig is safer, with more automation and less worker interaction than other rigs. It is also larger and more powerful, which offers more operational flexibility with today's deep horizontal shale drilling."
From Schraam Inc. website:
The TXD is the drilling contractor's rig of choice for energy sector directional drilling and large diameter deep hole water well drilling applications requiring 200,000 lb hoist capacity.
Thanks to its patented Telemast® design, the TXD offers Range III tubular capability in a fully portable, trailer mounted package that can be set up in a matter of hours upon arrival to the drilling site. In addition, its small footprint dramatically reduces environmental impact.
LoadSafe®, Schramm's fully automated pipe handling system is an integral part of the TXD package. When combined with hydraulic roughnecks and power slips to meet specific site requirements, LoadSafe offers the highest degree of operator safety available in the industry today.
Any climate, any terrain, Schramm rigs are built your way, delivering maximum performance and reliability in the most extreme environments on earth.
- Up to 200,000 lbf ( 890 kN) hoist capacity
- Up to 32,000 lbf (142 kN) pulldown
- Range III tubular capability
- Precise hydraulic weight on bit control
- Compact 53 ft (16.2 m) transport length
- LoadSafe automated pipe handling system included
- Rotation brake for directional drilling available

subset: commoncrawl