Ardour Global Alternative Energy Index

Ardour Global Indexes, LLC runs numerous stock indexes, which model various groups of alternative energy companies. The five different indexes divide alternative energy companies into different global regions, as well as one index that models solar energy companies. The Ardour Global Composite Index is the largest, composed of 125 different companies. The rest of the indexes are broken down in to smaller regional sectors. The balancing of the index is based on the market size of the company. Some big names in the index include Vestas Wind Systems, First Solar, and SunPower.

The composite index is composed of companies in the following industries with a few examples given in each:

-Alternative Energy
Solar, wind, biofuel
-Distributed Generation
Fuel cells, diesel engines
-Environmental Technology
Clean coal, water treatment
-Energy Efficiency
Lighting, Energy recycling
-Enabled Technologies
Advanced materials, superconductors

The gamut of industries in the index is general indicator for the alternative energy industry as a whole. This is one of the few, if not the only index specifically tailored to model the growth of alternative energy. The composite index includes all companies dealing in the previously mentioned categories that have a large enough market capitalization. The sub-indices go through rebalancing where companies are added and removed to ensure accuracy. Ardour claims an unbiased approach and maintains independence when analyzing companies. The index will be an interesting tool to track the growth of alternative energy over the next few years. One can also invest in the index as a whole under the symbol GEX, which is an Exchange Traded Fund (ETF) run by VanEck.

More information on the Ardour indexes can be found at:

http://ardour.snetglobalindexes.com/

What the election means for alternative energy

With Barack Obama as the President elect for the United States, the coming years will bring many changes to this country (as we so often heard in the past few months). Either candidate would have hand their hands full come inauguration. The economy is in a slump due to the falling stock market and credit crunch and home prices and consumer confidence continue to fall, but what lies ahead for alternative energy? Both candidates favored the use of alternative energy as a way to reduce our dependence on fossil fuels, so the alternative energy sector would have performed well in the future regardless of what happened on Election Day. In reality, the sector will win out one way or another over time.

Change (it will be hard to use that word in the future without sounding partisan) in energy technology will start to become more and more visible throughout the United States in the coming years. Subsidies for alternative energy projects will increase making more opportunities for solar, wind, and biofuel firms to take on projects. Natural gas will become more widespread as a transportation fuel and dirty coal and dangerous nuclear power plants may become less dominate in electricity generation.

Some alternative energy technologies are approaching the cost effectiveness of traditional fuels such as oil and coal. Although natural gas is used in a similar manner as petroleum fuels, it is highly available domestically and is clean burning. Subsidies for alternative energy will probably become easier for startup companies to obtain. Increased research and design will give more advancement opportunities in various alternative energy technologies.

According to Obama’s energy plan, the administration plans on creating 5 million “green collar” jobs and investing $150 billion in the next 10 years. This injection of capital will help build a future of continued alternative energy use. The energy plan also includes cutting greenhouse gases, putting more plug-in hybrids on the road, and having 10 percent of the nation’s energy come from alternative sources by 2012.

Regardless of the candidate elected, green energy will be big business in the years to come. The industry itself is very diversified and the opportunity for job growth will be high. Hopefully the increase in alternative energy will stimulate the economy and bring more jobs across the nation.

Solyndra: The cylindrical solar system

Solyndra is a private company based in Fremont, California with a unique solar panel design utilizing flat roof spaces. The cylindrical shaped panels resemble fluorescent light bulbs and can be mounted flat on unsloped rooftops. Traditional solar panels must be angled towards direct sunlight to operate efficiently. Solyndra panels (or tubes) lie flat and can collect sunlight from multiple directions. The spaces typically existing between angled panels are eliminated with the Solyndra flat mounting panels. Solyndra panels use a thin film photovoltaic material, wrapping a full 360 degrees around the solar cylinder. This allows sunlight to be collected from both direct rays and rays reflected from the roof underneath the panel, improving collection efficiency. The roof is often painted white to maximize sunlight collection.

The company is young and only has a few installed systems, but the company claims there is enough rooftop space in the United States to supply 150 gigawatts of power using their round solar panels. Since the system lies flat, it is fairly simple to install and doesn’t require much modification to the existing structure. Many businesses may be attracted to the flat panel design because it won’t affect buildings aesthetically. The systems are often unseen from the street level because of the low profile design. This is one of the most unique solar companies around today; more can be read about Solyndra at:

www.solyndra.com

(image from http://solyndra.com/Products/More-Electricity)

Silicon vs. thin film solar cells

Today there are two main types of photovoltaic systems available. The mainstay of the industry and historic method of producing solar panels is with silicon. In short, silicon crystals in the panels harness the sun’s energy and electrons flow through the panels into a usable current of electricity. More can be read on the basics of solar energy at:

http://jc-solarhomes.com/photovolt.htm

 Silicon panels have traditionally been costly to produce and wasteful of material. Ingots of silicon are typically sawn into wafers and then made into panels. Solar grade silicon can reach the price of $500 per kilogram. Silicon panels are generally more efficient than their thin film counterparts and the physical panel itself is relatively simple to dispose of once its working life is through. 

Thin film solar panels are made from a micro thin layer of a semiconducting material such as cadmium telluride or other material combinations. These thin film cells can be made from a wide variety and combinations of materials, all of which depend on the manufacturer. Cost efficiency is an advantage of thin film solar arrays, but silicon is still generally more efficient for energy conversion at this time. First Solar of Arizona is one company successfully manufacturing the cheaper thin film panels, one disadvantage of their product is its toxicity and the eventual problem of disposal at the end of service life.

There is a high amount of competition in the solar energy business. Many companies are looking to produce panels as cheaply as possible and many of these small startups seem to come and go rather quickly. Over the next few years, there will be a greater separation between these two technologies. If the thin film technology becomes more efficient, a decline in the traditional silicon panels will be imminent.

 

http://www.sciam.com/article.cfm?id=solar-power-lightens-up-with-thin-film-cells

http://www.sciam.com/article.cfm?id=how-does-solar-power-work

Natural gas refueling at home: The Phill System

The existing infrastructure for gasoline and diesel fuels is immense. There is talk in the news recently of using natural gas as a transportation fuel, but there are few existing stations in the United States at this point in time. Currently the company FuelMaker (which is being acquired by Clean Energy Fuels Corp., CLNE) manufacturers a product called Phill, a home compressed natural gas fueling station. The system installs outdoors or in a garage and can refuel a natural gas powered vehicle over the course of a few hours or ideally, overnight. The system is being utilized by many fleet operations, such as city buses and other government vehicles. Some states like California already have a fairly widespread use of CNG. This home refueling station might be a big step in switching more vehicles to run on natural gas. 

Compressed natural gas may be utilized more as a transportation fuel in the future due to its low cost and domestic availability. The only commercially available consumer CNG vehicle is the Honda Civic GX. There are also many companies which install aftermarket CNG conversions for vehicles currently running on gasoline or diesel. The Phill System may make purchasing a natural gas vehicle more appealing to consumers, especially those who can use the car for commuting. Natural gas vehicles get about the same mileage per gallon equivalent as gasoline vehicles, but natural gas burns much cleaner and costs less. The Phill System is a big step in converting the nation’s vehicles to run on a domestic fuel source.

 

Read more about the Phill system, the Honda Civic GX, and CLNE at…

 

http://www.myphill.com/

http://automobiles.honda.com/civic-gx/

http://www.cleanenergyfuels.com/main.html

Evergreen Solar Q3 earnings announcement

Evergreen Solar announced third quarter earnings after trading hours October 16^th,and the share price tumbled the next day due to the small margin of revenue. The company lost 18 cents per share, far more than the expected loss of around 10 cents per share. The loss per share increased from the previous quarter, where the company lost 8 cents per share. The loss is attributed to the start up costs of the new Devens manufacturing facility. The net loss for the company is expected to continue into the fourth quarter of this year, with the company’s estimate between 8 and 10 cents per share.

Evergreen solar is still waiting days of profitability. Thus far, the company has yet to report positive earnings per share. According to the conference call the company has $309 million cash on hand, which is enough to complete the Devens manufacturing facility and produce 135 megawatts of product in 2009. Currently, the company is selling just over half of its product in the United States, with the rest of the sales coming from operations with EverQ in Europe and a small amount of business in Asia.

Although the company is currently in a period of expansion and negative earnings, good news did come out of this quarter’s conference call. The company announced two new long-term sales contracts, which will already put the 160mW Devens facility at full capacity beyond 2010. The contracts are with Mainstream Energy Corporation and AEE Solar Corp. These two contracts will put the total long-term sales backlog at over 1 gigawatt. This is a good sign for the company, as customers aren’t afraid of the current credit crunch and have faith in the quality of Evergreen Solar’s product line.

 

The conference call and other announcements can be found here:

 

http://www.evergreensolar.com/app/en/investors/

Energy Stock Horizon

The last two weeks have been a roller coaster ride for the stock market. The Dow Jones Industrial Average had its largest ever up and down point swings one week apart. With the large amount of recent volatility, alternative energy stocks have been heavily beaten down in price. Oil futures have also dipped below $80/ barrel this week, causing even further sell off energy related stocks.
With the recent decline in stock prices across the board, one may wonder if this is the time to own a risky alternative energy stock. Many of these companies rely on debt to finance their operations and long term loans will be harder to obtain in the near future. Even if banks and other financial institutions have the money on hand to loan out, they will be much more selective in their loan processes.
When considering the above mentioned risk factors, one may think stocks (including alternative energy companies) have been beaten down to very low price levels. Many of these have solid financials and good management, but have been pulled down along with the market. Although many of these seem like a steal, it may be awhile before the markets recover. Alternative energy requires a high amount of technology and many investors may flock to seemingly safer blue chip companies during times of financial hardship. Time horizon is an important factor to consider when investing in any stock, especially alternative energy. Recovery of the market is very unpredictable. Emotion can be difficult to contain, but one must keep a long term perspective when investing these days.