Energy Efficiency

by Tom Konrad CFA Many people still think of green technologies as costly. But cost is never the main barrier to efficiency measures, which often can boast internal financial returns far higher than even risky junk bonds.  The barriers against energy efficiency and legion, but cheif among them are the small size of the investments and split incentives, where the person making the investment is not the same person who reaps the rewards. A Colorado based NGO, the International Center for Appropriate and Sustainable Technology (ICAST), recently launched a charity-finance hybrid to overcome this problem of split incentives....

Most studies show that the greatest potential for reducing our carbon emissions comes from energy efficiency technologies.  And, unlike many renewable energy technologies, energy efficiency is almost always less expensive than developing new energy sources, so energy efficiency businesses can be profitable now, and still have a large potential upside which will come with regulatory efforts to reduce our carbon emissions and rising energy prices. Unfortunately, the reason this free lunch exists is because selling and implementing energy efficiency technologies isn't easy.  It's also much more difficult to find companies that profit from energy efficiency than those that produce...

by Scott Schnelle As an energy consultant for home retrofits, I often have customers and acquaintances ask my opinion regarding green technologies and energy efficient products. Undoubtedly, with the recent surge of the green movement and a shift toward becoming more environmentally sustainable, now is a great time to invest in these types of products. One product that has been getting more and more attention lately is spray foam. The product itself has been around for many years, but it has recently risen in popularity for a couple of reasons. Here, I’ll discuss spray foam briefly...

A few weeks ago, I stumbled upon a presentation that was given by FERC officials on the phenomenon of rapidly rising costs in US power generation (presentation link at the end of this post). The FERC, or Federal Energy Regulatory Commission, is America's energy watchdog. The presentation begins by noting that across America's major electricity hubs, power prices are up significantly on last year (between 62% in the Midwest and 123% in NYC) and that, unfortunately, this probably isn't an anomaly. In fact, the presentation argues, there may be something secular at play. Two main trends are noted....

Lighting Science Group Corp. (LSGP.OB) announced an order for 1,000 of Lighting Science's Optimized Digital Lighting(TM) (ODL(TM)) Low Bay lighting fixtures from Amtech Lighting Services, an ABM Industries Incorporated subsidiary, which is one of the nation's largest lighting management companies. Lighting Science expects to begin shipping the products during the second quarter for installation in select garages operated by AMPCO System Parking, another ABM subsidiary, and in AMPCO client garages. The nation's estimated 40,000 garage facilities provide an excellent platform for Lighting Science to launch their low bay fixtures given the high cost of electricity and the demand...

Tom Konrad CFA A Fat Cat. Photo of "Cauchy" by author. Friday, in a generally positive article about Lime Energy (NASD:LIME), I noted that the top five executives at the company seemed overpaid in comparison to one of their nearest rivals, Orion Energy Systems (NYSE:OESX).  Since this was not based on in-depth research, and is a pretty serious allegation about a company I’m otherwise enthusiastic about, I decided to do some more digging. Who is a Fat Cat? Using data on executive pay from Morningstar, I compared executive pay at...

Jim Fitzpatrick Watching baseball's first quadruple play was strange. Seeing Wal-Mart (WMT) go green is stranger still. First the baseball: The scene was a game of T-Ball, where everyone bats every inning, regardless of the number of outs. The bases were loaded when a line drive ended up in the glove of the pitcher. While he wondered how it got there, all the runners took off without tagging up. The pitcher ran to third, then second, then first. We kept counting the number of outs and they did not add up. First in our heads:...

by Debra Fiakas CFA It is the season of lights.  Lights for Hanukkah.  Lights for Christmas.  Energy Focus (EFOI:  Nasdaq) has been having a season of lights all year.  The company reported $62.3 million in total sales of its LED lighting products in the most recently reported twelve months.  Customers included large business and industry, property owners and the military.  The oil and gas industry is an important market vertical. Energy Focus really shines for the U.S. Navy with its explosion proof LED globes in all the colors the Navy needs to provide military personnel safety...

Tom Konrad CFA It's no secret that the housing market is in the doldrums.  New housing starts in August fell to an annual rate of 571,000, and fewer homes were under construction since record keeping began in 1970.  This has taken a toll on energy efficiency stocks in the housing sector, leading to some very attractive pricing in two of my favorites. Waterfurnace Renewable Energy (WFI.TO / WFIFF.PK) I've long been fan of Waterfurnace, an Indiana-based manufacturer of ground source and water-source heat pumps.  A note from a reader Wednesday prompted me to poll...

Tom Konrad, CFA Pioneering light-emitting diode (LED) maker Cree, Inc. looks overvalued. Light-Emitting Diodes, or LEDs, can be made to shine more brightly by increasing the power to them.  This has the unfortunate effect of overheating the leads and shortening the lifespan of the LED.  A similar effect may soon hit the stock of LED maker, Cree, Inc. (CREE.) Since I began the tradition, Cree has been a mainstay of my annual portfolio of ten stocks for the next year, published each January (See the 2008 and 2009 lists.  The Cree-free 2010 list is here.)  LEDs have been among...

The same Fortune interview with Jim Rogers, which I referenced yesterday also contains an excerpt from his new book, A Bull in China.  In it, he goes over a few stock picks, including one I thought worth bringing to the attention of investors interested in profiting from rising CAFE standards and other increases in vehicle efficiency:  Jim says: Aluminum Corp. of China (Chalco) (NYSE: ACH). Three year trend: profits up 86.7%, revenues up 88.8%. Chalco is the largest producer of primary aluminum in the world's fastest-growing aluminum market.  Established in 1999 out...

by Debra Fiakas CFA Appliance Recycling Centers of America (ARCI:  NYSE) is a typical small company, toiling away in seeming obscurity and struggling to get proper valuation of their success.  There is little glamour in old refrigerators and washing machines, but ARCA has figured out how to wring cash from recycling our household appliances.  In the last three fiscal years the company converted 1.6% of sales to operating cash flow. Unfortunately, things have turned a bit sour in the world of old Frigidaires and tired Maytags.  Last week ARCA reported financial results for the quarter ending September 2015.  The company suffered...

by Debra Fiakas CFA Shares of Appliance Recycling Centers of America (ARCI:  Nasdaq) has trended downward over the last year, despite some strong fundamental progress in the company’s position the recycling sector.  The corporate name tells at least part of the company’s story.  Besides recycling appliances such as washers, dryers and refridgerators, ARC also sells new and like-new appliances right out of the box.  The company has eighteen stores branded ApplianceSmart across the country.  Services to electric utilities and other energy companies related to energy efficiency programs provide yet another revenue source. In the twelve months ending March 2017, ARC reported...

Tom Konrad, CFA Baldor Electric Company stands to benefit from new Federal energy efficiency standards and other efforts to improve industrial energy efficiency. One of the lesser-known provisions of the 2007 Energy Independence and Security Act (EISA) will be to require efficiency standards for the majority of industrial electric motors.  This will be a boon for motor manufacturers when EISA comes into effect in December 2010: efficient motors require higher quality materials and manufacturing, and so can be sold for higher margins.  A major beneficiary of this transition will be Baldor Electric (NYSE:BEZ).  Baldor is...

by Debra Fiakas CFA Based on Austria, Zumtobel Group (ZMTBF:  OTC or ZAG:  Vienna) is a supplier of modern lighting products using Light Emitting Diode (LED) technology.  Zumtobel sells its lights and components under three international brands Thorn, Tridonic and Zumtobel and two regional brands ACDC and Reiss.  Zumtobel has a long history in lighting with its foundation in the 1950s in Dr. Zumtobel’s Electrogerate und Kunstharzpresswerk.  The Thorn brand, which was acquired in 2000, dates back to the 1920s when founder Jules Thorn set up the Electric Lamp Service Company.  Zumtobel sells lights in over...

Tom Konrad CFA Last week, a prominent display of $10 LED light bulbs from Cree, Inc. (NASD:CREE) arrested my attention as I entered a home improvement store. These were officially launched in March, and are similar to a 40 watt-equivalent bulb I bought in 2009.  I still have that bulb, which I use for outdoor lighting, because Compact Fluorescent Lights (CFLs) take too long to warm up in the winter.  It’s still going strong.  The only problem: it cost $50, and used as much energy as a CFL for the same amount of light. Four years later, we have...