Lehman Collapse Unsettles Solar Sector
Kevin Kelleher - Big Green
The turmoil on Wall Street has until now had a muted impact on clean technology, but it’s starting to change. Some solar stocks are reeling from the shockwaves of Lehman Brother’s bankruptcy.
Evergreen Solar (ESLR), JA Solar (JASO) and SunPower (SPWR) took hard hits early Tuesday, falling between 10 percent and 28 percent Tuesday at the opening. Although each stock has since regained ground - JASO and SPWR are actually back in the green in midday trading - the three stocks have given up between a tenth and a third of their value this week.
Each company had been in a stock-lending agreement with Lehman, leaving the bankrupt firm with shares that could complicate their future earnings. As Reuters explains,
“Under the deals, the three companies all lent shares to a Lehman subsidiary as part of stock issuances. If Lehman fails to return the shares as laid out under the agreements, they could be counted as part of their outstanding share counts, diluting the earnings per share of the companies.”
Evergreen seems to be taking the hardest hit, despite a statement and a conference call intended to assure investors. Evergreen loaned Lehman 31 million shares for hedging transactions related to a $374 million in convertible notes. Those shares aren’t factored into its EPS figure, but investors worry they may be, diluting their stock by an estimated 19 percent. Evergreen said there are provisions to prevent that dilution, but they might cost it $40 million.
JA Solar and SunPower were much less forceful in their assurances. JA officials said they were “unaware of the intentions” of the Lehman unit holding its shares. SunPower said it “cannot provide any assurances” until it studies the matter further. But both vowed to fight for their shareholders.
Although the crisis on Wall Street has been unravelling for months, sectors like solar energy are only now waking up to the possible, and unsettling, ramifications. Over at BusinessGreen, a solar-startup CEO ruminated darkly over how the credit crunch could hurt business models like his that have inherent risk.
“In the short term, it makes credit harder to get - it has an effect on capital, leasing – all the things you would do to get project funding,” he warned, adding that ventures in areas such as photovoltaic solar were still considered to be relatively high risk. “We just came out in June, so we’re really young compared with everyone else, and I’m certain that it will have an impact on raising money.”
The nasty irony of the credit crunch on Wall Street has been that no one has ever been very sure how bad it would be, so they put their money aside to wait things out. But putting money aside made the market less liquid and made things worse.
Now the risk is that this destructive dynamic will be exported to other sectors, such as solar. It may not happen, of course. But then again, nobody can be very sure how bad it will be.
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How to Invest in Clean Abundant Water
Katie Fehrenbacher - Hitlines
The water industry is a dysfunctional train wreck with a business model that could have been invented in Pyongyang, said Christopher Gasson, Editor in Chief of Global Water Intelligence magazine, at the AlwaysOn GoingGreen show on Tuesday. (OK, we’re awake now). That might not be a great thing for the planet at the moment, but its makes for a lot of opportunities for startups with innovative technology, as well as investors that want to fund a very nascent market.
But with so many water needs — drinking, agriculture, manufacturing, energy production, waste management — how do you find ways to fund possible innovations? Here’s some tips from Gasson, who moderated an AlwaysOn GoingGreen panel made up by Virgin Green Fund Partner Anup jacob, Miox CEO Carlos Perea, and the CTO Siemens Water Technology Joe Zuback.
1). Scalable solar desalination: There’s a lot of sun in places where fresh water is needed, and using the heat of the sun to power desalinaiton is a natural fit. We need solar clean water solutions that are low cost and can be scaled up.
2). Cheap clean water for agriculture: We need low-cost means of dealing with salinity in the agricultural system. In irrigated lands, particularly in arid areas, salinity can threaten soil and crop production. Finding a low cost way to offer better solutions to irrigate crop lands and keep salinity low is needed.
3). Lower energy salt separation: Desalinating water with less energy. There are a variety of ways that companies are working on this, such as: nano-engineered membranes, reverse osmosis membranes, mimicking the filter processes of the kidneys and mangroves, and working with chemical substances like clathrate hydrates and methane hydrates.
4). Value In Wastewater: We need to find more value in brine or wastewater.
5). Sludge Management: While innovations to clean wastewater are starting to emerge, the leftover sludge is one of the forgotten parts. The sludge tends to go to landfill and is expensive to deal with. We need to turn it into energy, and more efficiently and cost effectively use it.
6). Real-time water quality monitoring: There are a lot of technologies that look at parts of the water supply chain on a certain schedule. But we need advanced, real-time, smart monitoring systems that can, say, send a message to a cell phone that there’s an agent or unknown substance in the water supply.
7). Distribution solutions for drinking and wastewater: Water is expensive and difficult to move around. Investing in infrastructure and distribution will be needed. Former oil baron T. Boone Pickens knows this — he owns more water than any other individual in the country, through rights to the Ogallala aquifer under the same land he is putting wind turbines on. And Pickens is working to get a deal to transport both his wind and water over to Dallas.
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