Renewable and sustainable energy is clean (no emissions) and effectively infinite because it uses natural resources such as the sun and wind to create power. We are all aware of the current climate change and global warning concerns; combining these with high oil prices and the potential of peak oil we can see the desperate need for a different, more-efficient energy option.
Renewable energy replaces the conventional fuels used in generating electricity, heating systems, transportation fuels, and other energy services. An increase in sustainable energy sources results in significant energy security, climate change mitigation, and economic benefits. Renewable energy sources such as solar and wind are expected to be capable of supplying humanity with energy for another billion years. That’s a pretty great feat.
Many people may think that renewable energy projects are large-scale and expensive but more technologies are available to rural and remotes areas and developing countries. A quarter of the world’s population does not have access to electricity because of the limitation on governments’ funding. They cannot afford to extend electrical grid infrastructure in their countries. Two big players in the sustainable energy industry that are providing state-of-the-art alternative energy options are Sun Edison (SUNE) and Canadian Solar (CSIQ) .
Sun Edison (SUNE)
Exceling in providing intelligent energy solutions, Sun Edisonis a leading global solar technology manufacturer and provider of solar energy services.
They pride themselves in fulfilling each customer’s unique solar energy needs. The company develops, finances, operates, and monitors solar energy solutions that ultimately reduce the world’s dependence on fossil fuels. Their solutions provide a clean, economical alternative to fossil fuels without compromising the expected reliability of conventional energy sources.
Many industries rely on energy security, often bringing doubt to the solar energy solution. However, SunEdison offers hybrid solutions to deliver reliable energy that can still reduce fuel consumption by up to 30%; maximizing profitability and reducing total cost.
SunEdison has recently partnered with Los Pelambres mine; an agreement was reached for the long-term sale of power to Los Pelambres. The mine is owned by Antofagasta Minerals S.A., the largest private mining group in Chile. There is strong competition of solar energy in Chile, especially in the Chilean mining and industry market. SunEdison has revolutionized to deliver cost savings by transforming how energy is generated. Jose Perez, president of SunEdison for Europe, the Middle East, Africa and Latin America, stated, “This landmark project reinforces SunEdison's ability to offer competitive, innovative and sustainable energy solutions to its customers and reaffirms SunEdison's leading role in Latin America.”
The company is also excited to have received $145 million in equity financing from Google (GOOG) for the Regulus solar plant. When completed, the Regulus solar project will be SunEdison's largest developed and constructed project in North America, located in Kern County, CA. SunEdison developed, designed, executed the structured financing and is constructing the Regulus project which will begin operation later this year and supply power to Sourthern California Edison.
“We believe the world needs a wide range of clean energy technologies, each serving different needs. This project with SunEdison presented an opportunity to take an old gas and oil field and turn it into a clean energy producing solar site,” stated Nick Coons, renewable energy principal at Google.
Canadian Solar (CSIQ)
The other major sustainable energy player is Canadian Solar. Founded in 2001 by Dr. Shawn Qu (currently President and CEO), Canadian Solar is one of the leading solar manufactures in the world. A rapidly growing solar energy total solution provider with one of the largest global project development pipelines. The company is headquartered in Ontario, Canada, but it has a diversified global reach: the largest markets are Canada, USA, Japan, China, Germany, and India.
The company represents a beneficiary of strong secular growth in the solar sector and rapid growth in project development. Canadian Solar is a bankable brand with high quality products led by an impressive management team that has a proven track record.
Canadian Solar has been awarded a module supply agreement to provide 1.5MW of photovoltaic (PV) modules to Kawar Energy for a rooftop solar power project located in Japan. The company also announced recently that its wholly owned subsidiary, Canadian Solar Solutions, has completed the sale of 10 MW AC Mighty Solar power plant to One West Holdings, an affiliate of Concord Green Energy. The plant is valued at over CAN$60 million.
Dr. Shawn Qu stated, “It is important to have a partner who shares our vision of creating clean renewable energy for the future generations to come. We are pleased to support Concord on their investments in green energy opportunities within Ontario while fulfilling their mission of creating sustainable communities.”
A smaller, higher risk company in the sustainable energy sector is EnerDynamic Hybrid Technologies ($EHT:CA). EHT offers the solution to the growing conventional energy and global warning concerns: Micro-Utility/Grid Energy on demand.
EnerDynamic Hybrid Technologies (EHT)
A Canadian global energy solution company, EHT offers unique solutions that are designed to meet the growing demand and are bankable and sustainable. They can deliver both Micro-Utility and Utility Scale solutions as well as customizable energy solutions. What makes this company stand out is their combination of solar PV, wind, and battery storage solutions which can deliver energy 24 hours per day in small and large scale formats. EHT offers a complete suite of energy solutions for on- and off-grid applications such as EnerCube, EnerPole, EnerCom, and EnerSmart. They are customized for residential and commercial applications with made in Canada warranties.
In the first eight months ending May 31, 2014, EHT generated $9 million in revenue and reported $867,612 in gross margin; this rapid revenue growth is an important differentiator for the company. The company has recently completed an RTO transaction with MCM capital. The company has raised in excess of $7 million so far and is in the midst of raising an additional $10-$15 million dollars. The company has entered into negotiations to purchase a number of solar power energy plants that are currently backed by long-term power purchase agreements. The projects would produce a total of more than 50MW and potentially generate over $16 million per annum in revenues.
The company’s value is built upon the unique and proprietary solar, wind, and battery solutions that it offers. It is an immediate win for governments because they can avoid large infrastructure spending; conventional wind turbines are expensive to build and are time consuming to install and maintain. Similarly, current hybrid wind and solar structures have high initial costs, are difficult to manufacture and install, and are inefficient unless there are high wind speeds. Developing countries require modular and scalable energy solutions to avoid the high expenses of traditional grid-tied utility-scale project infrastructure.
Led by CEO John Gamble, the company maintains a solid value creation strategy: By building and retaining high value projects with long term PPA cash flows and building and selling hybrid energy projects and micro-utilities. Combining those two things will maximize retained value and growth for shareholders.
There is promising return for investors because of the growth expected from development opportunities especially with the early presence in the growing markets such as Central America, South America, and Africa. The company’s global presence allows opportunity capture in all major regions.
There is potential YieldCo Spin-Out which can help with the growing backlog of projects and will create additional value for shareholders. A yield vehicle is a publicly-traded company that owns operating assets and produced cash flow.
The experienced and strong management at EHT are working hard to grow and expand the company to increase value for shareholders. With a strong mid-market following, there is great potential here for investors looking to be involved in the sustainable energy market. EHT has positioned itself for steady growth in a market that is building speed as the world is looking for cleaner and efficient power options.
As always, if you have any questions, please do not hesitate to get in touch with me anytime. I look forward to hearing from you.