Climate change is a “threat multiplier” and worse than many of the challenges the U.S. military is already grappling with, according to a new report b…
Read more: Climate Change, Environment, Military, Oil, Oil Prices, Energy,…
Date: 10/1/2014The Massachusetts Clean Energy Center (MassCEC) published The 2014 Massachusetts Clean Energy Industry Report, the fourth annual MassCEC report discussing the size, scope, and nature of the Commonwealth’s clean energy industry. According…
Date: 10/6/2014The U.S. Department of Energy’s (DOE’s) Wind Program announced a Notice of Intent to issue a funding opportunity titled “Wind Energy Bat Impact Minimization Technologies and Field Testing Opportunities.” This funding would help address e…
Date: 9/25/2014As part of President Obama’s comprehensive Climate Action Plan to create American jobs, develop domestic clean energy resources, and reduce carbon pollution, Secretary of the Interior Sally Jewell recently announced a new competitive lea…
By Beate Sonerud
is issuing US$200m of asset-linked retail
bonds, with maturities ranging from 1-7 years and interest rates
from 2-4%. Wells
Fargo is the banking partner. While the bonds are
expects the bonds to be buy and hold, and not traded in the
The bond is issued for small-scale investors, with
investment starting at US$1000, giving this bond issuance a
crowdfunding aspect. Choosing such a different structure allows
SolarCity to diversify their investor base – the company stresses
that small-scale investors are a complement, not
substitute, for large-scale institutional investors. While
this is the first public offering of solar bonds in the US, in the
UK, such small-scale retail and mini-bonds in the solar and wind
sectors have been popular for some time.
is the largest installer of residential solar in the US, and this
is not the first time they are pioneering in the green bond space.
In November last year, SolarCity was the first US company to issue asset-backed
securities for solar. Since then, it has issued another two rounds
of ABS backed by power-purchase agreements from their customers.
All of these issuances have been private placement offerings.
SolarCity’s securitisation offerings have shown a steady decline in coupon, providing the
company with cheaper funding. The company’s first issuance was rated BBB+ with coupon at
4.80% – right off the bat achieving investment grade rating with
no credit enhancement. In April this year, the second issuance, US$70.2m, was also
rated BBB+, but achieved a better coupon at 4.60%. In July 2014,
the third issuance, for US$201.5m, achieved a lower coupon still.
The upper tranche of this issuance achieved rating of BBB+, and a
coupon of 4.026%, with the lower BB tranche getting 5.45%,
providing an overall coupon of 4.32%.
In September, SolarCity also issued US$500m of 5-year
convertible bonds, with a 1.625% coupon. We like the wide range of
different structures of green bonds they are using.
In terms of the green credentials, we consider SolarCity a
pure-play company aligned with a climate economy, although
it’s worth noting that their bonds are not labelled green bonds.
We do think there is room for labelling also for solar companies
like SolarCity, mostly because it would make it easier for
investors to identify the company’s bond issuances as green.
Although easy investor identification is less relevant for this
specific retail bond, it is something to consider for future
issuances. It is also a much simpler process to label solar than
non-pure play companies – check out our solar standards for details
of what we’d expect from a labelled solar bond.
We look forward to see what SolarCity will do next as a green
bonds pioneer. The company seems to just be getting started, as SolarCity states that: “(…) this is the
first of fairly continuous offerings”. Great stuff!
——— Beate Sonerud is a policy analyst
at the Climate
Bonds Initiative, an “investor-focused” not-for-profit
promoting long-term debt models to fund a rapid, global
transition to a low-carbon economy.
WICHITA, Kan. (AP) — A new biofuels plant in southwest Kansas represents the future of ethanol production in the United States, Energy Secretary Ern…
Read more: Biofuels Plant Waste Ethanol, Ethanol, Second Generation Ethanol, Plant Waste Ethanol, Biofuels, Farm Waste Ethanol, Cellulosic Ethanol, Abengoa, Hugoton, Transportation, Energy, Renewable Fuels, Renewable Energy, Green News
by Debra Fiakas CFA
Consumer adoption of hydrogen-fueled vehicles could have quite a
catalytic impact on the entire fuel cell industry. Two of the
public fuel cell technology companies come to mind first: Plug Power, Inc. (PLUG:
Nasdaq), FuelCell Energy,
Nasdaq) and Ballard Power
Systems, Inc. (BLDP:
Nasdaq). These companies have been toiling away for years on
fuel cell technologies, finding success on the periphery with
industrial, campus and power generation solutions. All three
companies trade at modest prices and could look like great bargains
for investors with an extended investment horizon.
Plug Power has found considerable success by focusing on commercial
and industrial users with campus or warehouse applications.
The company has packaged its flagship hydrogen fueled membrane fuel
cell with central refueling stations, winning high-profile customers
like Walmart in Canada, Kroger, FedEx and even Volkswagen that have
fleets of materials handling vehicles. Sales have been growing
and Plug Power was able to post $35.6 million in total sales for the
twelve months ending June 2014. However, the company has yet
to produce an operating profit and required $35.9 million in cash to
support operations during that twelve month period. The
company reported near $168 million in cash resources at the end of
As was noted in the article “Investor
Unplugging from Plug Power” in April 2014, the stock has
been under considerable selling pressure over the last several
months. The company’s sometimes erratic investor
communications could be part of the problem. More recently the
stock has been among the victims of the correction in the U.S.
equity markets. In September 2014, the stock formed what is
called a ‘double bottom breakdown’ in technical parlance, signaling
a bearish sentiment pervades trading in the stock. Momentum
oscillators for the stock suggest there is little to turn around the
free fall in the stock price that began in early August. There
might good reason to take a long position in PLUG if your investment
horizon is far off, but there could be opportunities yet to acquire
PLUG at even lower prices than today.
The stock of FuelCell Energy has been looking oversold and the slide
downward that began in early September and shows little sign of
stopping. Last week FCEL completed an especially bearish formation
called a ‘descending triple bottom breakdown’ by technicians who use
point and figure charts. The measure was so strong it suggests
the stock could fall as low as $0.25 per share.
If FCEL trades that low, it might be considered a good value. The
company’s technology transforms various fuels such as natural gas or
methanol or biogas to power through its proprietary fuel cell power
plants. The company has gained some traction in the market and
has over 50 installations in the power generation industry, waste
water treatment plants, healthcare facilities and other locations
that require always-on power sources. FuelCell reported $181.0
million in total revenue in the six months ending July 2014, and
posted a net loss of $46.3 million.
FuelCell Energy’s technology successes appear to have been enough to
convince a player in the energy industry to commission a study of
direct fuel cell power plants. FuelCell Energy did not release
its customers name or the value of the contract. The
development revenue will be added to $3.2 million awarded by the
U.S. Energy Department to study advanced materials.
Ballard Power Systems is giving FuelCell Energy some
competition. Ballard has developed technology for proton
exchange membrane (PEM) fuel cells that has been commercialized for
mobile and stationary power plant applications. Ballard
reported $66.8 million in total sales in the most recently reported
twelve months, resulting in a net loss of $15.2 million. Cash
usage in the same period was $15.0 million. At that cash burn
rate, Ballard could last another two years or so just by relying on
its cash resources that totaled $36.4 million at the end of June
Management at Ballard might not be so worried about their bank
account balance. Ballard has been supplying Plug Power with
fuel cell stacks for Plug Power’s GenDrive systems deployed in
forklift trucks. A new agreement extends the supply
arrangement to 2017. Wait, there is more! Digicell
Group, a communications provider in the Caribbean and Central
America, recently placed the second tranche of an order for
Ballard’s ElectraGen methanol-fuel cells to be deployed around
Jamaica for back-up power. After selling these thirteen
additional systems to Digicell, Ballard can boast 161 ElectraGen
systems deployed and operating in the Caribbean.
The wild card in the Ballard story is new leadership.
Ballard’s chief executive officer of eight years is retiring, making
room for Randy MacEwan as the new CEO. MacEwan has industrial
gas supply knowhow and extensive executive level experience in the
clean energy industry. Even with a long list of credentials
there MacEwan will still have a learning curve and it is not clear
if he has the ability to sketch out a road map to profitability.
It should be no surprise that Ballard shares has the same negative
sentiment permeating in its trading as we have observed in PLUG and
FCEL. There appears to be little support at any price level to
keep the stock from trading to below buck. The bearish price
target for BLDP is $0.75.
Three companies with recent positive fundamental developments that
indicate market acceptance of their technologies and products.
Skies above these fuel cell producers are getting blue as recent
developments in the automotive industry suggest a growing interest
in fuel cell technologies for consumer on-road vehicle as well as
commercial off-road vehicles and stationary solutions.
Three undervalued stocks with weakening trading patterns that
suggest things could get worse before they get better. For me
that adds up to three stocks that should be on a watch list until
the equity market finds its bottom.
Debra Fiakas is the Managing Director of Crystal Equity
Research, an alternative
research resource on small capitalization companies in selected
Neither the author of the Small Cap
Strategist web log,
Crystal Equity Research nor its affiliates have a beneficial
interest in the companies mentioned herein.