The Efficiency Experts

Energy efficiency is a niche of the green market. It is not about finding new technologies but rather, making the most of traditional energy sources. The American Recovery and Reinvestment Act has budgeted $8 billion for weatherization work on mid- to- low income homes. This work typically includes doing energy audits and making simple upgrades like sealing windows and repairing vents. This first wave of stimulus efficiency is projected to employ 87,000 people. In the private sector, firms nationwide are doubling or tripling work forces to upgrade millions of homes, businesses and government buildings. The reason? The stimulus spending and an accompanying batch of new tax breaks for efficiency (http://www.chicagotribune.com/news/nationworld/chi-weatherize_for_monmar23,0,736350.story).

To see what an energy auditor does, check out the video “Home Green Home: Hunting Energy Leaks” on this page. http://greeninc.blogs.nytimescom/. Energy auditors use infrared cameras to locate air leaks. You may notice the auditor was using a device with a FLIR logo on it. That makes sense as Flir Systems (Nasdaq:FLIR, www.flir.com) is the largest maker of handheld infrared cameras and is going after this market in a big way but with a market cap of $2.9 Billion, it is not a small cap. The company that supplies FLIR with technology that magnifies the resolution between varying thermal images is Bellevue, WA-based Emagin Corp (EMAN.OB, http://www.emagin.com/.  It is small, with a market cap of just $8 million, but could see some coat-tail-riding near term upside. Its leadership in OLED microdisplay technology has applications for the gaming, medical, industrial and military markets.

Lime Energy (Nasdaq:LIME, http://www.lime-energy.com), of Elk Grove, IL is an energy efficiency engineering firm that this month announced a $2.25 million weatherization and lighting contract for a US army facility. Lime is selling its proprietary energy technologies to focus on such energy efficiency design/build opportunities. The stock rarely trades and sits at $3.93, not much above its low of $3 and far from its 52 week peak of $11. One has to assume that the company is well-positioned to capture its share of energy efficiency projects that are sure to be up for bid as the stimulus and tax breaks trickle down. And this could be one of few pure play “weatherization” stocks around.

Lime may very well re-design buildings that use energy efficient windows and glass, a niche in which Minneapolis -based Apogee Enterprises (Nasdaq:APOG, http://www.apog.com/), has a strong grip. Progressive Investor named it one of its Top 20 Sustainable Stocks of 2008 and a recent Motley Fool article listed it as one of 7 stocks to benefit from the stimulus plan. It trades at $11.23; 52 week hi/low is $5.32/26. http://www.fool.com/investing/general/2009/02/27/7-companies-set-to-profit-from-the-stimulus-plan.aspx

If you notice that the lights in your downtown are a bit dimmer than usual this Saturday, do not be alarmed. It is not a brown-out, but a planned light-out by the World Wildlife Fund. The group is hoping that all governments, businesses and homes will turn off their lights at 8:30-9:30 local time the world over to raise awareness of the pressing need to limit carbon emissions. Several small caps are marketing lighting efficiency.

East Hanover, NJ based Comverge (Nasdaq:COMV, www.comverge.com), is engaged in a lighting replacement project for the Times Square Arts Center in Manhattan that will reduce its energy usage by 190,000 kWh and save more than 200,000 pounds of carbon dioxide emissions on an annual basis, resulting in annual savings of $35,000. The stock has solid volume trading at 158K/day and at $7.16, it sits below its 52-week high of $15.74. The Company offers a spectrum of solutions and products to assist utilities and end consumers in utilizing energy “smarter” and more efficiently. Its lighting division mandate reduces lighting energy costs by up to 50 percent per square foot. Other companies that focus on developing and marketing efficient lighting systems include Plymouth, WI.-based Orion Energy Systems (Nasdaq:OESX, www.oriones.com), and Solon, OH-based Energy Focus (Nasdaq:EFOI, www.energyfocusinc.com).

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