The Green Technology Sector

Cleantech With All the Trimmings

Written by Brian Hicks
Posted November 28, 2009

Welcome to the Green Chip Review Weekend Edition — our insights from the week in everything alternative and cleantech, as well as links to our most-read Green Chip Review and sister publication articles.  


Lots of good news emerged and investor sentiment brightened during this shortened holiday week.

Before the turkey was even stuffed, cleantech industry reports were out claiming increasing initial public offerings, reduced costs, and general expansion across the board.

Reuters put it like this:

Purse strings are loosening, new bets are being placed, and cautious optimism has caught on in the green technology sector.

With oil prices up sharply and the U.S. economy steady, the emerging green technology industry is seen moving back to a growth path from a sheer survival track, with factories being built, funds moving to research and some high-profile young firms mulling initial public offerings of shares.

Indeed, there are IPOs aplenty. A123 Systems (NASDAQ: AONE) was probably the most high profile this year, in cleantech or any other sector.

Early November saw the introduction of STRI Holdings (NASDAQ: STRI), a Connecticut-based solar encapsulant company. And this week we learned that Chinese thin film company Trony Solar Holdings raised its IPO target to $241 million from $200 million. Last but not least, China Longyuan Power Group — the largest wind generator in Asia — says it'll raise $2.2 billion in an IPO later this year.

That last one should draw some excitement. According to the preliminary prospectus on that deal, Wilbur Ross is already in for a purported $100 million.

With respect to solar industry fundamentals, things are looking up as well. A slew of analyst reports were out this week touting the following positives:

  • Strong global incentives

  • Less-than-expected incentive cuts in Germany and Italy

  • More normalized price declines for panels, expect another 10%-15% next year

  • Better margins on slower price declines

What's more, Germany, which already boasts the world's largest solar market, will post a large unexpected jump in capacity this year. Late demand will take 2009 installations in Germany to 3 gigawatts. And insiders say strong demand will continue there into 2010.

But even though German installations are ramping up... the products are most likely coming from China. Nearly every Chinese solar company I can think of — JA Solar, Yingli, Chinese Sunergy, Canadian Solar, Trina Solar, Suntech — all beat quarter earnings estimates while stalwart German firms reported billion-dollar losses.

Finally, the carbon sector — despite fading hopes for Copenhagen — received a trifecta of good news this week.

California announced draft rules for its in-state cap-and-trade plan. Obama announced he will show up in Copenhagen, pledging to cut U.S. emissions to 17% below 2005 levels by 2020, which is 3% below the 1990 levels used for U.N. Treaties. And institutional investors holding more than $1 trillion in assets — including the largest U.S. public pension fund, renewed their call to the SEC to require companies to disclose climate-related risks.

According to Mindy Lubber, president of CERES, the group that organized the petition, "This is calling for real transparency on material risks that have a profound impact on share value of companies. These are now real on-balance sheet risks. They are material. They ought to be disclosed."

Be thankful for Mindy Lubber, and for everyone else working to make the green economy a reality.

Hope you had a great Thanksgiving,

Nick Hodge

Nick

P.S. In case you missed the week's top-read articles from Green Chip Review and our sister-publications, you can catch up now.

Geothermal Power: Chinese Lead African Geothermal Exploration
Green Chip
Editor Sam Hopkins reports on the Chinese company making its presence felt in Africa, by drilling geothermal wells for a massive Kenyan government energy campaign.

Bulgaria Wind Power: Bulgaria Wind Power Temporarily Frozen
Editor Jeff Siegel explains why Bulgaria must beef up its grid to facilitate new renewable power.

America's Electric Infrastructure: On the Verge of Collapse
Green Chip Review
reveals the massive technological initiative that will mushroom — into as much as $2 trillion by 2030 — and three smart grid stocks that can make you smart profits.

Investing in Clean Technology: John Doerr's Take on Cleantech
Green Chip
's Nick Hodge passes along notes he took at GreenBeat 2009 while listening to John Doerr talk about the future of investing in clean technology.

A Half a Billion Dollar Wind Project: 20 Years of Non-Stop Revenue for This One Single Wind Play
Green Chip reveals the most profitable pure wind development play in North America — guaranteed — why this sector is about to skyrocket, and how getting a piece of the action couldn't be easier...

Tesla Motors IPO: Tesla Motors IPO Expected
Green Chip
Editor Jeff Siegel reports: With Tesla Motors IPO filing expected shortly, the company will become the first U.S. automaker to go public since Ford in 1956.

Green Energy Finance: How to Escape the "Valley of Death"
Contributing Editor Kyle Haas shares his notes from the American Council on Renewable Energy meeting and explains where the money is for cleantech projects.

PowerMeter and Energy Efficiency: Google, the Electric Utility?
Energy and Capital Editor Nick Hodge discusses the investment potential of home energy networks by looking at the imminent success of Google's PowerMeter.