Solar Stocks Sector Close Up - Solar Integrators Deliver Growth
18 September 2008 - 11:09PM
Marketwired
www.RenewableEnergyStocks.com, a leading investor news and
research portal for the renewable energy sector within
Investorideas.com, presents a sector close-up on solar stocks in
the Green Investor series by environmental writer Paulo Nery. Solar
stocks featured include Premier Power Renewable Energy Inc., Akeena
Solar (AKNS) and XsunX, Inc. (OTCBB: XSNX).
Green Investor at Investorideas.com
Column by Paulo Nery, Exclusively for Investorideas.com
Solar Integrators Deliver Growth
Excerpt: (Full story at http://www.investorideas.com/gi/)
While the whole market seemed to be slipping downhill on
September 15th, there was one bold company that actually listed
publicly that day and seemed to roar straight out of the gates.
That company was Premier Power Renewable Energy Inc which launched
on the Over the Counter (OTC) bulletin board via a reverse merger
rather than a standard IPO.
Premier Power (www.premierpower.com) is one of several solar
integration companies who make it their business to design and
build solar power installations on a medium to large scale. They
install systems for commercial, municipal and agricultural as well
as residential customers. One of their core markets is wineries and
vineyards. Premier operates in Spain, California, Nevada, New York
and New Jersey. Plus they are now said to be looking for business
in France and Italy.
According to the company's press release it closed a $7 million
private placement of 3.5 million shares at $2 each. Their market
capitalization comes in at $151.8 million. They claim customers
such as KB Home, Pacific Gas and Electric (PG&E), Princeton
University, Shafer Vineyards, Silverado Wineries, ATT, and Jay Leno
among others.
Premier Power says they posted sales of $16.7 million in 2007
with a net income of $843,865 for the year. They also report that
they have contracted $48 million in sales for 2008. At face value,
that's almost 300% growth. However they've posted slightly under
$18 million on their income statement for the first six months of
2008.
Premier's rapid growth in 2008 sales is impressive, but it could
be partly due to clients rushing to get systems installed ahead of
the expiration of the Federal tax credits at the end of this year.
Several other solar installers and integrators have reported this
happening among their clients too. Though the existing scheme of
tax credits is widely expected to be extended or even made slightly
better.
And while the business is obviously growing, solar power is not
really economically viable yet at the true cost of solar
photovoltaic panels. The entire solar industry is underpinned by
government subsidy and incentives at the moment. That's a place
where nothing is really for certain, and seems slightly
uncomfortable to me. It's fairly clear that if Senator Obama wins
the presidential election he'll be pushing for more solar
incentives which will help companies like Premier. But Senator
McCain's position is somewhat less clear.
Longer term, there are positive factors for solar integrators
and installers. Firstly, silicon prices are falling. Then there are
alternative solar technologies emerging like thin film which hold
out the promise of much lower cost. Companies like XsunX (OTCBB:
XSNX) are working to complete the assembly of their multi-megawatt
thin film manufacturing operations and begin delivering thin film
solar modules to a growing market that is clamouring for more
supplies and lower prices solutions. In addition to thin film
technologies offering lower costs today experts expect that costs
may continue to go lower still making thin film solutions such as
those offered by XsunX highly attractive. Thin film is generally
seen as a utility scale solution because of its lower efficiency
and therefore greater area needed to generate the same power. But
as its cost drops and efficiency increases it will make increasing
sense for small commercial and residential applications. That could
easily spark new demand and at the same time improve margins for
the installers and integration companies.
Premier is by no means the only big solar installer/integrator
play out there. Another to consider is Akeena Solar (AKNS) which
with a market cap of $108 million, is a similar company to PPRW in
size and in their operating regions. Akeena Solar (www.akeena.net)
focuses on markets in California, New York, New Jersey,
Pennsylvania, and Connecticut. But Akeena is also more focused on
residential and small commercial market which according to
SolarBuzz, a research and consulting firm, represent approximately
65 percent of the U.S. market, and will continue to do so through
2010.
Apart from these two there are hundreds of smaller private
companies in the integration and installation space operating more
locally. They'll offer competition and some may emerge in time as
public companies too. And there are companies like BP who design
and install systems as well as manufacturing panels. But being an
integrated energy company, they are more levered to oil and can not
be regarded as an investment play on solar.
Disclosure: Paulo Nery does not currently own shares of any of
the companies named above.
Featured Showcase Solar Company XsunX: (OTCBB: XSNX)
Based in Aliso Viejo, Calif., XsunX is developing amorphous
silicon thin film photovoltaic (TFPV) solar cell manufacturing
processes to produce TFPV solar modules. To deliver its products
the Company has begun to build a multi-megawatt TFPV solar module
production facility in the United States to meet the growing demand
for solar cell products used in large scale commercial projects,
utility power fields, and other on-grid applications. Employing a
phased roll out of production capacity, it plans to grow
manufacturing capacities to over 100 megawatts by 2010. More info
on XsunX, Inc. can be found on our media profile at:
http://www.investorideas.com/co/xsnx/default.asp or
http://www.xsunx.com/.
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