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1. First Solar's Earnings Warms Investors' Hearts
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2. Hydro Green Energy To Tap Mississippi in September, Seeks $70M
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3. Energy Bonds: A New Financial Market
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4. SolFocus Builds Out First Phase of Spanish Solar Plant
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5. Tendril Launches Energy Management Ecosystem
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6. The Daily Sprout
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7. The End of Cheap and Easy Carbon Credits
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8. LA Times Knocks Off T. Boone's Green Halo
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9. Lighting Science Group to Buy LED Maker Lamina
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10. Intel Double Dips in Solar & Chips with $12.5M in Voltaix
First Solar's Earnings Warms Investors' Hearts
Kevin Kelleher - Big Green
Here’s a refreshing change: Some positive news about a solar company.
First Solar [FSLR], a prominent stock in the beleaguered solar sector that has held up relatively well of late, posted earnings for the quarter ended June 30, and the numbers were well ahead of what Wall Street had been expecting. The stock shot up 7 percent in aftermarket trading on the news.
First Solar’s revenue grew to $267 million in the quarter, 36 percent above the $196 million in the previous quarter and more than three times larger than the $77 million in the second quarter of 2007. Analysts were looking for revenue of $217 million.
Net income came in at $69.7 million, or 85 cents a diluted share. That was not only above the 57 cents from the previous quarter, but far ahead of the 58 cents a share in profit that Wall Street had been expecting.
Michael Ahearn, CEO of First Solar, said in a conference call that production rose to 114.1 megawatts in the quarter. “We continue to ramp capacity in our new production facilities,” Ahearn said, noting that construction of new facility being constructed in Malaysia was also “proceeding well.”
“Looking at our production volumes in relation to market demand, we were able to increase throughput in existing production lines faster than conceived and to bring up new lines at a faster rate,” Ahearn said.
CFO Jens Meyerhoff said he expects revenue for all of 2008 to come in between $1.175 billion and $1.225 billion as more production lines open up. The midpoint of that range, $1.2 billion, would be 138 percent above 2007 revenue of $504 million and higher than the $1.04 billion that analysts had been forecasting.
As First Solar’s revenues grow, its margins are expanding. Gross profit came in a 54.2% of revenue, compared with 36.7% a year earlier. Operating profit was 33.2 percent in the quarter, up from 7.5 percent a year ago. Meyerhoff said operatng margins for the full year would come in between 31 percent and 33 percent, slightly lower than the second quarter margin.
For the most part, First Solar’s stock has been trading between $250 and $300 for several months, holding up relatively well as other solar stocks have slumped. First Solar’s stock rose as high as $305 in the hour after releasing its earnings, up 7% from the official close and approaching the record high of $317 reached in May.
Hydro Green Energy To Tap Mississippi in September, Seeks $70M
Craig Rubens - Startups
Hydro Green’s technology uses turbines with a 12-foot diameter; each one is capable of producing 250 kilowatts of power. A whole turbine array can be mounted on the bottom of a barge or platform with a gantry, allowing the turbines to be raised out of the water. That design eliminates the need for underwater mounting or maintenance, the company says.
Hydro Green’s founder and CEO Wayne Krouse confirmed with us that once the turbines are up and running in the Mississippi, Hydro Green hopes to close a Series B round of funding in the neighborhood of $70 million (hat tip VentureWire).
While Hydro Green is actively seeking Series B funds, the company wouldn’t confirm any potential investors. Likely candidates include previous investors such as David Gelbaum's Quercus Trust, which led Hydro Green’s $2.6 million Series A round in April this year. Another possible backer is Acorn Ventures; the firm’s president, Stuart Schube, sits on Hydro Green’s advisory board.
Hydro Green isn’t the only company looking to tap the Mississippi. Free Flow Power is a Massachusetts-based startup with a $3 billion plan to place thousands of small electric turbines down the Mississippi river — from St. Louis to New Orleans — which could generate more than 1 gigawatt of electricity. The startup has preliminary three-year permits to study 59 sites in the Mississippi, granted by the marine power gatekeeper, the Federal Energy Regulatory Commission.
Beyond the Mississippi, Hydro Green is also working to generate power from ocean tides and currents, too. Earlier this week the startup announced an agreement with Wind Energy Systems Technology Group to explore the development of a hybrid offshore wind-hydrokinetic ocean current power project in the Gulf of Mexico. The basic idea makes a lot of sense — if you’re going to build an offshore wind turbine generating power above the water, you might as well mount some turbines underwater, since you’ve already got a pylon.
Energy Bonds: A New Financial Market
Brian McConnell - Policy
One of the most daunting but necessary challenges faced by the U.S. is getting to other side of this energy crisis, both by migrating away from fossil fuel-based energy and building new infrastructure. But this is a challenge that requires billions of dollars, money that has to come from somewhere.
As a country, we have become locked in a consumer debt mindset. Few people adequately prepare for their retirement. Savings rates have dropped to all-time lows, while federal and consumer debt has ballooned to record levels.
But there might be a way to fund these massive clean energy public works projects, promote long-term savings and sanity in public finance, and in the process, educate citizens about how government and financial markets work.
We all hate taxes. As the saying goes, the power to tax is the power to destroy. So instead of creating a tax, we should create a national savings program that invests in national clean energy infrastructure projects. Here’s how it might work. (Keep in mind this is a simple example; in the real world, it would include exceptions):
A new line item appears on your payroll tax for a so-called “Federal Investment Bank” (or whatever it gets named). Five percent of your gross pay is automatically invested, say, $250 per month. This is not a tax, however, but a debt instrument, backed by the Treasury and carrying a 10-year maturity; whether you cash it in or reinvest it is up to you. As with private retirement accounts, incentives reward you for staying invested over the long term.
This fund would provide cheap, long-term capital for public works projects and would pay investors/taxpayers a guaranteed rate. To qualify, a project would need to be fiscally sound and provide a public good or service. Clean energy and public transit infrastructure are two good examples of facilities that both serve the public and require large-scale, long-term capital investment.
This fund would either loan money directly to projects or to specialist banks and agencies that focus on specific types of projects. These would not be grants, but traditional loans with long-term repayment schedules, collateral, etc. The government, as it does with the Federal Reserve, would serve as the bank’s bank, and act as a source of cheap and reliable capital.
You’d be able to see how much you had contributed, which projects had been funded with your bonds and expected rates of return. Would you view this as a tax, for example, if you knew that this year, your $3,000 helped fund a $100 million wind farm in Arizona, and that you’d expect to receive an average annual return of between 4 and 5 percent on that loan over 10 years?
However we tackle it, migrating to a national clean energy infrastructure is, by itself, a trillion-dollar challenge. Maybe we can continue borrowing that money from foreign countries, or maybe we should be investing in this ourselves. Sure, most of us would like to have more take-home pay, but if these funds are invested in public facilities that benefit everyone, one could argue that not only are you making money in the long term, you’re receiving benefits in the short term (for example, because investment in clean power farms is sheltering you from spikes in energy bills, local re-investment, etc).
Even for less sophisticated investors, most people will understand a statement that tells them their account balance, how much interest they’re earning and what’s available to withdraw or re-invest as their bonds mature. And of course, there’s no sophistication required to notice when gas prices are going down.
SolFocus Builds Out First Phase of Spanish Solar Plant
Katie Fehrenbacher - Startups
SolFocus, a startup that designs and builds solar concentrating photovoltaic systems, says this morning that it has completed the first 200-kilowatt phase of a sizable 3 MW system in Castilla-La Mancha, Spain. The solar plant, which SolFocus claims is the world’s first commercial-scale concentrating photovoltaic system, is owned by the Spanish Institute of Concentration Photovoltaic Systems (ISFOC). It will both produce clean power and act as a testing ground for various concentrating solar PV technologies.
Concentrating solar PV is a more nascent technology compared to both traditional solar photovoltaic systems and solar thermal plants that use the sun’s heat to produce power. The concentrating photovoltaic plants use arrays with lenses and curved mirrors to focus sunlight onto cells in order to produce more power with less material.
In the case of SolFocus, the startup says its concentrating technology allows a one-square-centimeter cell to capture more than 500 square centimeters of sunlight. Such a setup reduces the number of expensive panels used, which can significantly cut down on the cost of the system; SolFocus says it uses 0.1 percent of the solar cell material required by a standard PV setup.
The startup, which is based in Mountain View, Calif., and has a sister company, SolFocus Europe, in Madrid, has been filling its war chest to help it build more systems like the ISFOC plant. In June the two-year-old company was reportedly looking to add between $60 million and $80 million in a Series C round. Previously the company was funded to the tune of $95 million by New Enterprise Associates, Moser Baer India, David Gelbaum, Metasystem Group, NGEN Partners and Yellowstone Capital.
Next up, the company begins work on the second phase of the ISFOC project, boosting its total capacity to 500 kW.
Tendril Launches Energy Management Ecosystem
Craig Rubens - Startups
The system includes an energy display, wall-plugs to manage individual appliances, a smart thermostat and a web site where users can track their use. The entire system is pulled together wirelessly, operating over a ZigBee network.
There are a number of energy startups working on similar services and devices. Tendril’s TREE represents one of the more sophisticated consumer-facing energy dashboards we’ve seen. The communication between the consumer and energy provider can help deliver a lot of transparency for the consumer’s energy bill.
The startup is located in Boulder, Colo. and raised $12 million in series B funding earlier this year from RRE Ventures, Vista Ventures, Access Venture Partners and Appian Ventures.
The Daily Sprout
Craig Rubens - 1
PG&E Taps Silver Spring Networks for Smart Grid: PG&E, one of the country’s largest utilities, has picked Silver Spring Networks to provide smart grid services for some 5 million customers through the utility’s SmartMeter program upgrade - Press release.
EEStor Gets Third Party Verification on Energy Storage TechUltracapacitors: EEStor says they have had their ultracapacitor-based architecture technology verified by a third party, lending some insight and credibility to the otherwise secretive startup - Clean Tech Group.
Tesla Fender Bender in San Francisco: Hours after being delivered to it’s new owner, Tesla production car #6 unceremoniously found itself wedged between a Camry and a Mercedes in a car accident not serious enough to deploy any airbags. Check the link to see pictures of of the partially-crushed Roadster - Wired.
Electric Car Roundup from 2008 British International Motor Show: CNet does a quick rundown of some fo the electric vehicles being showcased at this year’s motor show - CNet.
The End of Cheap and Easy Carbon Credits
Craig Rubens - Policy
The days of cheap and easy carbon credit projects are over, according to a new report from energy research firm New Carbon Finance. Specifically, abatement projects for two very potent greenhouse gases — HFC-23 and N2O — have been almost entirely tapped out because offsetting these gases yields large returns on the credits generated. Because of this New Carbon Finance expects to see more money go into renewable energy and energy efficiency, to the tune of €9 billion ($14 billion) by 2012, if the Kyoto Protocol targets are to be met.
HFC-23 and N2O are found in industrial flue gas and are thousands of times more potent greenhouse gases than carbon dioxide. Fortunately, cleaning them up isn’t hard and investment in reducing those emissions costs about €1 per ton of CO2 equivalent, which yields a tidy profit as the going rate for carbon credits is about €20 per ton. In China, where the bulk of the world’s HFC-23 and N2O are emitted, all of the major sources of HFC-23 and 80 percent of N2O reducible through carbon offsets are already either receiving credits or are under development, according to New Carbon Finance. While this is ultimately good for the environment, it does mean that going forward, abatement of greenhouse gases will cost more.
HFC-23 and N2O offset projects comprise 72 percent of all credits issued by the UN under the Kyoto Protocol, down only slightly from 75 percent in January 2007. Because few new projects can be developed, New Carbon Finance expects that number to drop to 30 percent by 2010 and to 24 percent by 2012, when the Kyoto Protocol expires.
This will hopefully encourage more investment in renewable energy and energy efficiency projects. They’re just not aren’t nearly as lucrative. The report says credits generated from these sorts of projects cost about €5 and €15 per ton of CO2, severely cutting into the return on investment. But even so, New Carbon Finance director Guy Turner said in a statement: “The price of credits we are seeing today of around €20/ton should be sufficient to stimulate the necessary capital flows to these high-quality projects.” However, it will likely take a big increase in the value of carbon credits to encourage offsetters to go after CO2 and other greenhouse gases like they went after HFC-23 and N2O.
LA Times Knocks Off T. Boone's Green Halo
Katie Fehrenbacher - Energy
The Los Angeles Times does an eloquent body slam on the green halo floating over T. Boone Pickens’ head today. Pickens’ plan to use natural gas-powered vehicles for a third of U.S. transportation turns out to have a very self-serving interest, which could also be funded by billions from California taxpayers. OK, so we knew Pickens is a savvy businessman, but we can’t help but feel a little let down — please, a moment of silence for our crushed idealism.
Alright; all done. So here’s why you should be concerned. Reporter Anthony Rubenstein writes in the LA Times that Pickens owns natural gas fueling station company Clean Energy Fuels, which of course would benefit tremendously from the Pickens Plan’ call to boost natural gas vehicles. But more interestingly, Rubenstein says Clean Energy Fuels is the only backer of a proposition on California’s November ballot that calls for the sale of $5 billion in general fund bonds for clean energy incentives. “[B]y the time the principal and the interest is paid off,” he writes, “it would squander at least $9.8 billion in taxpayer money on Pickens’ self-serving natural gas agenda.”
Ah, so that’s who’s supposed to fund T. Boone’s plan. We were wondering about that. The is proposition is also supposedly filled with a “laundry list of cash grabs” for natural gas vehicles, many of which could go straight to Clean Energy Fuels. Hey Californians, watch out for Prop 10. Like us, Rubenstein sheds a tear for the newly minted green leader, and says he almost prefers to think that Pickens is being misled by his lawyers and consultants.
Lighting Science Group to Buy LED Maker Lamina
Craig Rubens - Startups
Lamina previously raised at least $16 million from investors Morgenthaler Partners, Easton Capital, Redshift Ventures, Granite Global Ventures, CID Equity Partners and Mellon Family Investments. So given the assets of the company were sold for an initial $4.5 million in cash, doesn’t look to be such a great deal for the startup. LSG isn’t exactly in the catbird seat either — along with the Lamina acquisition, the company announced that it has entered into an agreement with Bank of Montreal for a $20 million line of credit, which will help finance the Lamina purchase.
We’ve seen consolidation like this before, and this deal is a small drop in a very big bucket. LED poster child Cree purchased LED Lighting Fixtures for nearly $100 million earlier this year. Philips, one of the largest lighting companies in the world, has been on an acquisition tear, too. The company acquired LED maker Lumileds for around $950 million, paid $72.8 million for solid-state lighting module manufacturer TIR Systems, spent $794 million on LED maker Color Kinetics, and finally bought Genlyte for $2.7 billion at the end of year.
Perhaps the New York Times was right when it wrote yesterday that “this bulb’s time has come.”
Intel Double Dips in Solar & Chips with $12.5M in Voltaix
Craig Rubens - Big Green
Voltaix, headquartered in Branchburg, N.J., was the former ChemOvonic division of Energy Conversion Devices, from which it was spun off in 1986. The company plans to use this funding to build out its business to sell into the growing thin-film solar industry and sees particular potential in the realm of building integrated photovoltaics. However, not all thin-film manufacturing require Voltaix’s chemical products, and startups are working on printing systems that don’t require vacuum chambers or dangerous gases to achieve even and cheap deposition.
Intel Capital has been increasingly investing in both cleantech and solar. The firm spun out SpectraWatt and led a $50 million round for the solar startup. Then earlier this month, Intel put some $37.5 million into German thin-film solar module maker Sulfurcell. Outside of solar, Intel invested an undisclosed sum into Grid Net, a smart-grid software developer.
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