The Future of Green Tech Investment

green technology investmentAccording to a recent article in Green Technica by author Joshua S. Hill, green tech investment could “skyrocket” by 2030. Hill cites research from Bloomberg New Energy Finance, including a detailed analysis of three different potential scenarios. As their research shows, wind and solar could have the efficiency and popularity needed to bring the renewable energy industry into its own.

Although clean energy ETFs have been underperforming in an era where fossil fuels have largely recovered from recession-era prices, each of the three scenarios explored by Bloomberg New Energy Finance shows an increase in green technology investing. A 230% increase in annual investment by 2030 would mean increasing to a total of $630 billion per year. Bloomberg New Energy Finance largely attributes this to the decreasing cost of wind and solar technologies, as compared to fossil fuel alternatives. The report also shows increased use of hydro power, geothermal and biomass.

Michael Liebreich, Bloomberg New Energy Finance’s chief executive, believes that we have already passed the “tipping point” for clean energy technology. He points out that, even though most news coverage is discussing the future of fossil fuels, costs for green energy and implementation are falling. He says, “The news right now is dominated by stories of pain caused by overcapacity on the supply side of clean energy, and the lure of cheap shale gas, but this is playing out against the falling costs of renewable energy and of all the technologies required to integrate it into our energy system, and falling costs win. What it suggests is that we are beyond the tipping point towards a cleaner energy future.”

The three scenarios explored by Bloomberg New Energy Finance are “New Normal”, “Barrier Busting” and “Traditional Territory”. “New Normal” is cited as the most likely, and ends with a probable $630 billion per year in green tech investing. Each scenario calls for growth in the renewable energy sector, notably in solar and wind energy, along with decreases in fossil fuels. Even the modest “Traditional Territory” scenario shows green tech investment increasing to $470 billion by 2030.

Guy Turner, the head of economics and commodities for Bloomberg New Energy Finance, says that renewable technologies will be the “anchor of new generating capacity additions” in all scenarios. He points out, “The main driver for future growth of the renewable sector over this timeframe is a shift from policy support to falling costs and natural demand.” Read the original article.

When we last looked at solar energy in particular, we noted that 2013 is a slower year for installations due to an oversupply of solar panels. However, by bringing this technology to end-users more quickly and at lowered prices, we explored the idea that solar energy may be closer to being at parity with fossil fuel based energy. Also helping the situation is a budgeted increase in spending for the Department of Energy, including a 75 percent increase in spending on advanced vehicles to $575 million, and a 29 percent increase in spending on the ongoing effort to integrate solar and wind power into the national electric grid.


Large Cap Siemens AG Leaves Solar Business to ‘Specialized Companies’

Citing “sinking prices and  cutbacks in government support for solar-thermal projects,” Siemens AG announced this week that it was exiting from the solar power business but would continue its alternative energy focus on wind and hydro power, according to several newspapers including the Wall Street Journal ( for subscribers). The much publicized austerity measures throughout Europe, the glut of solar panels that have devastated market prices for panels and cutbacks in solar-thermal projects all played a role in this decision, the WSJ reported. 

Photo courtesy of Siemens AG

It was just three years ago that Siemens paid $418 million for Israel-based Solel Solar Systems as well as a stake in Italy-based Archimede Solar Energy, according to the WSJ report. The solar announcement comes on the heels of Siemens previous decision to shelve its nuclear power ventures.

Michael Suss, a Siemen energy division head, suggested that “only specialized companies” will thrive in today’s solar market. Siemens was focused on solar-thermal technology, “which unlike solar panels, uses the sun’s rays to heat water in large-scale projects, turning it into steam” to generate electricity.” the WSJ report noted. Siemens is apparently in talks to sell off the solar division of its business.

It was only a month ago we took a look at a few small cap solar stocks (call them “specialized companies”), which back then were struggling with many of the same issues as giant Siemens (73.5 billion Euros in annual revenues during its last fiscal year) and trying to keep from being delisted by Nasdaq and the NYSE. So let’s see what’s happened since.

Tempe, AZ-based First Solar (Nasdaq: FSLR,, which specializes in thin-film solar modules, is not a small cap but we include it anyway. FSLR closed Sept. 25 at $20.51. FSLR closed Oct. 23 at $23.31, down 49 cents, with a market cap of $2 billion.

Ontario, Canada-based Canadian Solar (Nasdaq: CSIQ, ), which sells a variety of solar products, closed Sept. 25 at $3.01 with a market cap of $130 million. CSIQ closed Oct. 23 at $2.61, up 1 cent, with a market cap of $112.6 million.

San Jose, CA-based SunPower Corp. (Nasdaq: SPWR,, which makes a wide variety of solar products and systems, closed Sept. 25 at $4.60 with a market cap of $547 million. SPWR closed Oct. 23 at $4.34, down 4 cents, with a market cap of $516 million.

China-based LDK Solar Co. (NYSE: LDK, manufactures solar products and silicon materials. LDK closed Sept. 25 at $1.25 with a market cap of $167 million. LDK closed Oct. 23 at $0.88 with a market cap of $117 million.

China-based Trina Solar Ltd. (NYSE: TSL, designs, manufactures and sells photovoltaic modules worldwide. It has a chart similar to many of the other solar stocks, which reached highs in the summer of 2011. TSL closed Sept. 25 at $4.47 with a market cap of $316 million. TSL closed Oct. 23 at $4.42, up 12 cents, with a market cap of $312 million.

China-based Yingli Green Energy Holding Co. (NYSE: YGE,, which makes photovoltaic products including cells, modules and systems, closed Sept. 25 at $1.74 with a market cap of $272 million. YGE closed Oct. 23 at $1.72, up1 cent, with a market cap of $269 million.

China-based Suntech Power Holdings (NYSE: STP,, the world’s largest producer of solar panels, closed at $0.92 on Sept. 25. STP closed Oct. 23 at $0.85, up 3 cents, with a market cap of $154 million.

Finding Value in ADR Shares of Foreign-Based Companies (Part 2)

Finding Value in ADRs

We find that if you exclude momentum-driven exchanges, many foreign companies are valued at lower multiples or in lower quartiles than US-based companies that might be considered peers or comparables.  And since most ADRs are initiated by the companies without doing a US offering or even a US roadshow, many ADRs languish on US exchanges, with very low levels of trading that can scare off investors.

The trick to capturing value in an ADR is to realize that the ADR is a security that you can create when you need it and then convert back to its original form on demand.  So if you buy the shares of a foreign company on, say, a European exchange, you can convert them to ADRs on demand if there is an ADR program with one of the depositary banks. 

 Once the foreign shares are converted to ADRs they can be handled as US securities, reported on statements in US dollars, and, depending on individual broker-dealer rules, may be marginable.  If the trading liquidity of the ADR in the US is not satisfactory, the ADR can be converted back to the original form as an “ordinary” share, and sold on the home exchange. 

 So while it is convenient if there is a liquid trading market in the ADR, it is not essential if there is a liquid market in the home exchange. 

OTCQX International

The OTCQX International is aUSelectronic trading market that is primarily for cross-border companies represented by ADRs.  Founded in 2007, the OTCQX has become a haven for large and small non-US companies who might, in former times, have been listed on Nasdaq or on the NYSE in order to make their securities available to US investors. 

With the high cost of duplicative filing rules, D&O insurance and compliance with US laws & regulations such as Sarbanes-Oxley, many cross-border companies have elected to move their listings to OTCQX International, where costs are considerably lower than they are maintaining a full NYSE listing, but respectability is assured.  Large-cap international companies like Deutsche Telekom, easyjet, BNP Paribas, Gazprom, Roche, and AXA trade on the OTCQX, alongside small-cap and mid-cap companies.

 Each company trading on the OTCQX has a Principal American Liaison (PAL) or a Designated Advisor for Disclosure (DAD) as a guide to the regulatory environment, and, in some cases, as a helper in navigating US markets.  These PALs and DADs are investment banks, broker-dealers, law firms, accountancies – companies that bring helpful expertise to the task.

 Unlike London’s AIM (Alternative Investment Market), to which many compare it, the companies listed on the OTCQX International do not use their listings to raise financings, but simply to facilitate trading of the ADRs.  The “Level 1” ADRs listed on the OTCQX International are not empowered to do US financings without complying with more of the full panoply of US laws & regulations. 

Two other ADR examples include:

Poland-based Grupa ADV ( is a group of companies in three developing areas: integrated market communication, innovative technologies and e-commerce. The companies offer a variety of interactive media and e-marketing services including online campaigning, email marketing, viral marketing and advertising production. It trades as ADV on theWarsaw exchange and GPVSY on the OTC in theU.S.

Mauritius-based Essar Energy (, a subsidiary of the Essar Group, is a low-cost, integrated energy company focused onIndia. It has interests in both the power generation and petroleum industries. It trades on the London Stock Exchange as ESSR and is a constituent of the FTSE 100 Index. Its ADRs trade on OTC as ERERY.

For further information

For more information on ADRs, please contact us at  We are NOT financial advisors and do NOT trade or sell securities or make markets.  We are an investor relations agency with strong experience in cross-border securities.

1603 Babies: Another Year of Life

The so-called “lame duck” Congress has gotten itself into a productive fit over the last couple of weeks, and passed more important legislation than it had done all year long — much of it bipartisan.  In many ways nothing was more surprising than the action that preserved the “1603 Program” this morning.  Widely reported today, the 1603 Program (so-called because it was created as section 1603 of the American Recovery and Reinvestment Act of 2009 — or ARRA) will be extended by a year, allowing the clean and renewable energy industries to continue to be boosted by a 30% subsidy for qualifying projects.   Proponents of the program claim that it has been responsible for the creation of 100,000 jobs.  Here is a take on the news by Pete Danko of EarthTechling:

Fellsmere FL large-scale Petroalgae R&D facility for algae-based fuels

The Treasury had doled out nearly half a billion dollars this year to solar projects alone:, and the support was very widespread, with 42 out of 50 states getting at least one grant.  Here is a brief summary from WilmerHale of the provisions of the program and related programs:

What does this mean for the renewables industry?  According to the American Wind Energy Association, the 1603 Program enabled the construction of 10,000 MW of new wind capacity in 2009, along with 10,000 construction jobs and 2,000 permanent jobs.  The solar industry grew by more than a third in 2009 and may grow by more than 50% in 2010 when the numbers are tallied:

What does that mean to investors?  Well, to begin with, many of the renewable-energy companies had seen their valuations whacked over the last several weeks as doubt mounted about whether 1603 would be extended.  So there may be some bounce-back profits to be made simply from that.  Look at the giants like First Solar (Nasdaq: FSLR;, whose shares have moved up nearly 10% over the last 2 weeks.  But since the trickle-down effect may not be either as fast or as efficient for the smaller companies and the supply chains, you may have more time to take a position.


Biomass companies are definitely included in 1603 — and that includes companies that grow their own biomass (jatropha, algae) as well as companies that use decomposing waste to create fuels.  An article from Popular Mechanics talked about 5 of them:  One of those is South San Francisco-based Solazyme (, but the choice is not wide if you are looking for companies that trade on the stock markets.  The largest is Melbourne, FL-based Petroalgae Inc (EBB: PALG;, with a market cap of over $1.1 billion. 



Solar concentrator looking like a ferris wheel

There are as many solar companies as Arabian Nights in the story book, it seems, divided into those that make the gear (photovoltaic cells, thin film, solar concentrating devices, a myriad of different parts and pieces); those that install the gear, and those that generate electric power from the installations.  There seem to be many claimants for the title “Largest Solar Installation in the World,” but one of the most recent is due to be installed in the eastern Mojave desert near the California city of Blythe:  About 2 months earlier, First Solar announced its own “world’s biggest”:  But the “dream team” solar project still has to be the electrification of the Sahara desert, even though it has no hope for 1603 funds:


And pretty-made turbines all in a row (at sea)


Perhaps the most controversial renewable is one of the oldest: harnessing the wind.  When I was a kid I was taught that waterwheels and windmills were some of civilized man’s first non-combustible attempts to harness natural energy.  But as the applications have gotten bigger, the windmills and waterwheels have become gigantic — and some folks don’t like them one little bit.  The highest-profile new projects tend to be offshore these days, like the huge project planned for the area around Nantucket Island, described here:  Wind farms are probably no larger than solar farms, but they stick up really high, and they create what some people see as visual pollution — “that big white thing with the rotating arms is ruining my view.”  Most of the big vendors are BIG, but there are a few smaller makers who might be good places to place a bet.  One is Irvine CA-based Composite Technology Corp (EBB: CPTC;, founded in 1980, and with a market cap of about $66 million.  CPTC makes wind turbines for the electric utility industry, and so stands to be a fairly direct beneficiary of 1603.   Or there’s Hamburg-based REpower Systems AG (DAX: RPW;, which just last week announced 51 additional MW for the US to be installed in PA, NY, OH and WA.  RPW is a much larger company, with a market cap in the range of 1.1 billion euros, and in the US there is an ADR, RPWSF.PK.


Hydroelectric dam (best not to mention fish around them)

If there’s anything more picturesque than an old windmill (think Mykonos), it’s an old waterwheel, and if there’s anything more gargantuan than a big wind farm, it is the modern descendent of the waterwheel, a huge hydroelectric dam.  But if there is anything that is renewable it is mountain streams and the rivers they power, and from the time that Buffalo was electrified by Niagara Falls, the attempt to harness every fast-flowing river has been universal.  And when there are no fast-flowing rivers, we create artificial lakes to run the turbines.  Most big dams are owned or operated by utilities or groups of utilities, and many small dams are under the authority of the Army Corps of Engineers, with a popular estimate that there are 20,000 small dams in the US alone that do not yet generate any electric power. Thus the growing demand for what is called “small hydro” — miniturbines that can generate smaller amounts of electricity but that can also be installed with a minimum of environmental impact and capital expenditure:  Earlier this year Russell Ray had a look at the regulatory and funding environment for small hydro:

It’s not easy to find a small hydro smallcap stock, because most of the hydroelectric stocks are big companies like Idacorp (NYSE: IDA) or AECOM Technology Corp (NYSE:ACM).  Smaller utilities in the northeast and northwest can be good places to look, and some very small nonpublic technology companies like Hydroring, a privately held Dutch company with an innovative “fish friendly” small turbine for riverine applications.  Very little data is available on Hydroring, based in The Hague, but there is a website at

Storage: the 800-pound gorilla

One of the conundrums of renewables is that although they smile a lot, utilities frequently are not well-disposed toward renewables.  They present a lot of technological and cost problems.  They are frequently remote from the grid and very costly to build long lines to.  Talk to most utilities and you will quickly believe that the key to renewables is a way to store the energy generated until it is needed.  And that means batteries.  Some lithium-ion companies have major smart-grid initiatives underway, but they represent a super-expensive way to store wind-turbine energy.  Regular old lead-acid batteries are a heck of a lot cheaper, but they don’t charge up and charge down fast enough, and they wear out very quickly.  As with other areas of potential 1603 beneficiaries, there are a lot of energy storage companies, so you might look at NYC-based Ener1 Inc (Nasdaq: HEV;  , which has a lot of Russian and Japanese lithium-ion technology know-how.  Another option would be Tyngsboro MA-based Beacon Power (Nasdaq: BCON;, which has a flywheel technology.  And the low-cost leader looks to be New Castle PA-based Axion Power International* (EBB: AXPW;, a company with a battery that is a relative of the lead-acid battery in your car, but turbocharged with nanocarbon to eliminate corrosion and increase the ability to charge/recharge.  It is worth saying that none of the 3 companies has been a mass manufacturer of their products to date, so all require due diligence with regard to their ability to scale up and serve the market.

*client of Allen & Caron, publisher of this blog.

During a recession or recovery — green shoots everywhere you look

The media vacillate daily about whether the economy is growing, whether the recession is lifting, and the market is like the audience at the US Open, heads moving back and forth in unison.  One way to look at the recovery — fast or slow, V-shaped or the dreaded W, robust or lackluster — is that it will probably happen, based on past history and the underlying strength both of the US economy and the economies of other industrialized nations.  And there are some things one can bank on already, including the new crop of technologies and spunky little companies that will emerge, or are already emerging.  There are books and articles on the subject, but a good summary was supplied by McClatchy newspapers last spring:  And it’s worth remembering that companies like HP and Microsoft were started during recessions.

The back-of-a-napkin technology stories tend to be exaggerated, and having spent 30 years with small companies, I know it’s 99% perspiration, as Thomas Edison is said to have said (and General Electric was born in a recession too, come to think of it).  The dynamic is simple: companies anticipate lower sales and so they retrench, firing people, sometimes in waves of thousands.  No one likes firing people, so the firings tend to be LIFO-based to give them a rationale, or wholesale site-closings (favored by heavy industry).  The LIFO unemployment lines hit younger employees disproportionately hard, and some of those go on to start companies (most new companies are started by young people, not by middle-aged people who have moved to the center of the economic spectrum already).

And you thought algae were just pond scum?

It’s a bit early to take a roll-call of new companies spawned by the 2008-2010 recession, but it is likely to be an impressive list in fairly short order.  We are already seeing some major public offerings queueing up for VC-backed new companies like Melbourne FL-based Petroalgae (OTCBB: PALG;, which has no revenues, but also has the good fortune to be banked by Goldman Sachs, UBS and Citi for its projected $200 million raise this autumn.  It has a totally theoretical market cap in the billions already, but the truth of that will be in the aftermarket.  At any rate, it ain’t gonna be chickenfeed.

As Marie Daghlian pointed out in a perceptive article in Seeking Alpha (, Englewood CO-based Gevo Inc, also with no revenues, is a biomass-to-fuel company looking for $150 million with a syndicate of banks only slightly different from that employed by Petroalgae — this time it’s UBS, Goldman Sachs and Piper Jaffray.  Gevo has a splendid website:

There’s actually been a good deal of talk about these two pending IPOs already, but I bring them up in order to point out that the companies that grow up in a recession tend to be companies with a different “take” on reality.  Exxon and BP continue to believe that the energy future is totally dependent on fossil fuels, but the European Union has decreed that 20% of Europe’s electricity will be derived from renewable sources by 2020, and that a 20% decrease in electricity usage will be accomplished in the same time period (the so-called 20-20-20 rule: ) — which creates some cognitive dissonance with the fossil-fuel-forever point of view.

And truthfully, you don’t have to have your ear firmly to the ground to know that there are all kinds of smaller, brainier, cutting-edge companies popping up in all kinds of sectors and all around the world.  In the Netherlands there is privately held Hydroring*, which has developed and is installing as we speak, micro-turbines to be submerged in rivers to create electricity without building dams — and these are donut-shaped turbines that fish can swim through (  At present we are told there are orders for 5 of these in the UK, 1 in the Netherlands, several in Germany and 2 in India.  Each one is expected to produce around 40 kWh on a constant basis year-round, without disrupting wildlife or shipping.

Bright Automotive — not just about cars any more

And in a variation on the theme of new companies, the “new” General Motors, itself preparing the biggest IPO in history, has extended a hand to one of the most promising of the really “new” greentech companies: privately held Anderson IN-based Bright Automotive (, whose battery-pack work is probably more significant than its slightly odd-looking delivery truck design.  However you look at it, though it’s a move sure to infuse some new ideas into the face-lifted former automotive sales leader from Detroit:

And while Petroalgae is pursuing its mega-deal in the US, Algae.Tec is in the process of closing a very modest deal in Australia for what seems like a far more innovative method of producing the same product at lower cost:  It also seems to have deals to build in Australia and China:

And although we have a policy against long articles, there are new green shoots as well in medical devices, pharma, biotech, software, media, internet, fish-farming — you name it, and clever people are doing it. 

However you look at it, one of the most important pieces of the puzzle facing a new company is how to get enough money to survive.  In the next installment of this series, we’ll talk about a new crop of “mid-market” investment banks bidding to take the position formerly held by the (sometimes 5 or 6, but usually 4) Four Horsemen, only one of which is still around (Needham & Co).  Signal Hill anyone?  Janney?  Madison Williams?  Baird?  Revolution Partners? 

Stay tuned.

* Denotes Allen & Caron client

CleanEquityMonaco: A Must-Do for the Greentech Aficionado or Investor March 4-5

One of the high points of the greentech year is coming up March 4-5: CleanEquityMonaco ( in the picturebook-lovely city of Monte Carlo.  Interestingly enough it is not a costly conference to attend, probably because it has very distinguished sponsors, and probably worthwhile even for Americans to fly to.  The conference has arranged very attractive hotel rates, a fraction of what one would expect on the Riviera, and quite reasonable flights can be found from the Northeast to Nice (which is the airport for Monaco as well).

Monaco Harbor from the Old City

CEM is a meetingplace for people with new and significant green technologies of all types, and from all over the globe.  There are several plenary meetings set, and some very distinguished guest speakers as well.  Awards for the best technologies and best commercializations will be made by Sir Stelios Haji-Ioannou and HSH Prince Albert II.  The conference coincides with an annual meeting of the United Nations Environmental Programme (UNEP) and green technocrats from all over the world will be in town at the same time.

But the real show are the new technologies themselves.  The publisher of this blog, Allen & Caron ( is working with the conference organizers on a pro bono basis, and we have admired the arrangements as they have been made over the last 6-8 months. 

Loopwing Wind Turbine from Japan -- meet them at CEM March 4-5

For obvious reasons, the largest category of new technologies will be in the field of alternative energy: solar, wind, new fuels, etc.  But there will also be environmental technologies that run the gamut.  The sponsor and organizer is London-based Innovator Capital (, a boutique investment bank and financial advisor with a devotion to environmental causes, and there will be investment bankers prowling around looking for clients, as well as technocrats from big multinationals looking for acquisitions and partnerships.  Many of the companies that are showing new technologies are not listed or publicly traded, and quite a few are really post-academic, though all have demonstrated proof of what they claim to be able to accomplish.  All are scrappy, feisty, fearless and have new mind-bending ideas.

Some “hot” publicly listed companies will also be presenting, including Shanghai-based China Energy Recovery, Oak Park MI-based Azure Dynamics, Torrance CA-based Enova Systems, Oxford UK-based Oxford Catalysts, Southboro MA-based Protonex, Cuxhaven Germany-based PNE Wind, Perth Australia-based Enerji Ltd,  and Griesheim Germany-based BGI EcoTech.

Jigar Shah, CEO of The Carbon War Room

The keynote speaker will be Jigar Shah, CEO of The Carbon War Room( , a noted authority on renewable energy, and the founder of SunEdison, which has more megawatts of solar energy under management than any other company in the world.  Mr Shah is an alumnus of BP Solar, a DOE contractor on fuel cells and alternative energy, and a member of several boards, including Greenpeace USA and the Prometheus Institute. 

Sir Stelios Haji-Ioannou

Sir Stelios will introduce the Next Wave segment of new technologies on the second day of the conference.  He is best known for having founded EasyJet, a leading lowcost airline that has revolutionized European travel, but he is also the founder of several other companies.  His Stelios Philanthropic Foundation is devoted to environmental sustainability, education and entrepreneurship. 

We highly recommend that you consider attending.  The cost is reasonable and the technology rewards potentially earth-changing.  Some of these concepts will completely reorder the way you see the world.

ThinkGreen 2009: San Francisco This Week

Many of the most visible and notable companies and personalities in the greentech/cleantech world will be on hand for ThinkGreen 2009, to be held Wednesday & Thursday at the InterContinental Hotel in San Francisco.  The conference is sponsored by investment bank, Think Equity (

Presenters will include Ascent Solar (Nasdaq: ASTI), Ceradyne (Nasdaq: CRDN), Ener1 (Nasdaq: HEV), LDK Solar (NYSE: LDK), MasTec Inc (NYSE: MTZ), Real Good Solar (nasdaq: RSOL), Spire Corp (Nasdaq: SPIR), Suntech Power Holdings (NYSE: STP), Valence Technology (Nasdaq: VLNC), and World Energy (TSX: XWE), in addition to a gaggle of not-yet-public companies whose names we will no doubt become more accustomed to seeing in the future.

On-site registration is $1,000.  For a look at the agenda, go to  You can register online, or in person, with registration open as of Tuesday evening.