Three months ago analysts expected First Solar’s second quarter EPS to come in at $2.01. That estimate is now $0.92. Even if the company beats expectations, the results will be disappointing. So First Solar found some good news to report.

The smaller bit of news is that the company’s cadmium-telluride (CdTe) thin-film modules have been certified as able to withstand the corrosive effects of salty air close to coastlines. This means that First Solar’s modules can be used in a rather nasty environment and that the company’s 25-year guarantee actually means something.

The second bit of news is more interesting, if somewhat longer term in applicability. The company has announced that it has set a new record for CdTe thin-film efficiency of 17.3%. That is, the solar PV cell converts 17.3% of the sunlight that hits it to electricity. This is 0.6% better than the previous efficiency record, which was set 10 years ago. In technology circles, 10 years is about 3 lifetimes.

While First Solar’s achievement is certainly praiseworthy, production of the high-efficiency cells remains well into the future. Currently the company is shipping modules with efficiencies of 11.7%. (Modules, unfortunately, are not as efficient as single cells.) By the end of 2014, First Solar expects to be shipping modules with an efficiency of 13.5%-14.5%.

Compared with crystalline silicon solar PV modules, the efficiency is not as high, but the cost/watt more than makes up the difference. Current modules prices are right around $0.75/watt, the lowest in the entire solar PV industry. If the company can get the higher efficiency cells out at that price, that will be a significant achievement.

General Electric Co. (NYSE: GE) claims to have produced a CdTe module in its laboratories with an efficiency of 12.8% and that it will begin mass producing modules with these high efficiency ratings in 2013. That’s a bit lower than First Solar’s projected efficiency, but the timeline is more aggressive. If GE can make good on its promise First Solar will have some real competition in the thin-film solar PV space.

None of this is likely to sway investors much if First Solar’s earnings are not gargantuan. At around mid-day, shares are trading down about -2%, at $117.89, within a 52-week range of $111.40-$175.45. Any kind of miss or near-miss on expectations could push shares closer to the low end of that range.

Paul Ausick

First, the stimulus package is aimed at creating jobs.  Some 3-4 million jobs according to President Obama.

Estimates from the Solar Energy Industries Association and the American Wind Energy Association figure more than 200,000 jobs in their industries alone. With unemployment rates projected to go to nearly 10% nationwide next year, creating that many new jobs is a good thing.

But from a different perspective, those 200,000 jobs could serve to raise significant barriers to entry to competing, and better, renewable energy companies. Those jobs are not targeted at R&D, but at manufacturing. That, too, is a good thing, given the loss of manufacturing jobs in the auto industry and elsewhere. Provided, of course, that the necessary skills are transferable.

Still, if existing solar and wind energy companies can’t thrive and expand with the current levels of government incentives, how can throwing more money at renewable energy make things better? Subsidies for ethanol have distorted the market for corn and gasoline. And the grants proposed under the stimulus package amount to subsidies.

The government agency that oversees and makes the grants will come under a lot of pressure to pick one technology over another. The choices the agency makes could be right, or they could be wrong. In either case, some jobs will be created. But how long will those jobs last?

It’s a difficult choice. Recall the first $350 billion in TARP funds that was given to banks with virtually no strings attached and no accountability. A few billion went out as bonuses, much to the public’s dismay.

Given the nature of the current recession, only the federal government has the tools to kick-start the economy. But it walks a fine line. It can either just toss the money over the fence and wait to see what happens, as it did with the banks. Or it can try to target the money to where it will have the maximum intended effect, as with the funds for renewable energy.

As simple as it sounds, the $5 billion part of the stimulus package that would pay for weatherization of homes may be the most effective idea in the whole $50 billion package. It requires consumers to purchase goods and hire people. Simple, but very effective at creating jobs. More of that please.

Paul Ausick
February 13, 2009

Some of the companies we have looked at in this sector are Altair Nanotechnologies (NASDAQ:ALTI), privately held A123 Systems Inc., Active Power Inc. (NASDAQ:ACPW), Beacon Power Corporation (NASDAQ:BCON), Exide Technologies (NASDAQ:XIDE), EnerSys (NYSE:ENS), C&D Technologies Inc. (NYSE:CHP), and Axion Power International, Inc. (OTCBB:AXPW).

Certainly the interest in hybrid electric cars has generated publicity about battery and fuel cell development. The financial stimulus package before Congress includes $2 billion in grants for advanced battery development. For the transportation sector, advanced batteries need to be lighter and last longer. Current lithium-ion technology, though state-of-the-art, is hampered by the rising cost of the raw material and the relatively short life span of Li-ion batteries. Altair Nanotechnologies (NASDAQ:ALTI) and privately-held A123 Systems Inc. are both working on improving Li-ion performance.

By focusing on batteries for transportation applications, the stimulus package ignores a potentially more important use for advanced batteries: storage for electricity generated by wind and solar power plants.

If solar-generated power created during daylight hours could be stored and put on the grid during non-daylight hours, the impact of large solar installations would essentially double. Similarly, if wind-generated power could be stored for use when the wind isn’t blowing its popularity would soar.

Such batteries would need to be very large and able to respond to requests quickly to meet peak generation demand. Much of the development of this type of battery has been in the uninterruptible power supply space. For example, Active Power Inc. (NASDAQ:ACPW) uses a flywheel technology to build systems that provide up to 3600 kVA as a bridge to firing up a stand-alone generator in the event of a power failure. The flywheel technology can be scaled up to 2000 kW of storage, but that’s at least an order of magnitude too small to be useful in wind/solar storage project. Beacon Power Corporation (NASDAQ:BCON) is also a pure-play flywheel company, but its technology is still very much in the development phase.

To reach the scale needed for big wind and solar projects, the old stand-by lead-acid battery probably offers the most potential. The basic technology is more than 100 years old, but it has the advantage of being less expensive and scalable. Companies such as Exide Technologies (NASDAQ:XIDE), EnerSys (NYSE:ENS), C&D Technologies Inc. (NYSE:CHP), and Axion Power International, Inc. (OTCBB:AXPW) are all working on improving lead-acid technology and scalability. Axion has patented lead-carbon technology that significantly decreases the amount of lead needed in a battery and is currently working on a couple of utility-scale demonstration projects.

The $2 billion in the US economic stimulus package is a huge amount by the standards of the battery industry. The interesting thing to watch here will be how the Department of Energy divvies up the money. The battery companies, with a couple of exceptions, are very small with very low share prices. They employ few people, and won’t employ many more even with new federal money.

By virtue of its authority to make grants, the DOE could decide which companies win and which companies lose. That has never proven to be the best way to develop a market. It does, however, have the advantage of making things happen quickly.

Remember the ethanol boom following the government’s requirement for increased ethanol content in gasoline? Fortunes were made off this.  Ethanol promised to be so big that even Bill Gates jumped into the ring very early via an investment in a company no one ever heard of before he got in.  But the winners are not always winners in the end.  Think of where ethanol stocks are now. That kind of market distortion could happen with advanced battery technology as well.

The good news about the sector is that there are very large companies who have their eyes on the arena.  The world’s largest conglomerate has its hands tied right now, but it has shown some interest recently in battery technology.  We all need power.  Whether we all need ethanol is something we don’t care to debate, because we are firmly entrenched in our own thoughts there.

Paul Ausick
February 13, 2009

A cloudy forecast, however, is more likely to affect Energy Conversion’s share price today. The company’s guidance for its third quarter, ending March 31st, is for revenue of $95 million to $110 million with consolidated gross margins of about 35%. For its full 2009 fiscal year, Energy Conversion expects total revenue of $395 million to $440 million. This outlook is far below guidance issued in August of $455 million to $485 million. The company’s president and CEO blames the “global economic downturn,” and points out that Energy Conversion’s risk factors include the availability of credit for its customers, many of which are builders of commercial and industrial buildings. That’s certainly reason to be concerned. In 2008, just one customer accounted for 23% of Energy Conversion’s sales.

The company’s shares are of 69% from the 52-week high of $83.33 reached this past summer.  It appears that there is no danger of topping that number anytime soon.

Paul Ausick
February 9, 2009

Yingli Green Energy (YGE) was rated overweight.  Solarfun Power (SOLF) was started as underweight.  China Sunergy (CSUN), LDK Solar (LDK), ReneSola (SOL), and Trina Solar (TSL) were all started as equal weight.

Jon C. Ogg

February 9, 2009

General Electric (NYSE:GE) announced orders for 20 Jenbacher Gen-Sets, 4 LMS 100 Gas Turbines for Latin American power companies, and 333 wind turbines in two U.S. states.

Yingli Green Energy Holding Company Limited (NYSE: YGE) priced its offering of US$150,000,000 zero coupon convertible senior notes due 2012 and the pricing of a concurrent offering of 5,600,000 American depositary shares by certain shareholders of the Company.

Amtech Systems, Inc. (NASDAQ: ASYS) received a $3.9 million follow-on solar order for diffusion processing systems from an existing solar cell customer based in Taiwan.

Yesterday, Gulf Ethanol (OTC: GFET) signed definitive agreements to acquire its new cellulose feed-stock processing technology for ethanol plants.

Just yesterday, Lazard Capital Markets reiterated its SELL rating on LDK Solar (NYSE: LDK) despite it being up large on a questionable supply order.

Active Power, Inc. (NASDAQ:ACPW) announced yesterday that the S.E.C. has completed its investigation into the company’s past stock option granting practices and is not recommending any enforcement action.

Yesterday, Morgan Stanley (NYSE: MS) invested in a $200 million staged solar project fund in Recurrent Energy to provide financing for $100mm of Recurrent Energy’s solar electric power projects in 2008 and an additional $100mm in 2009.

Jon C. Ogg
December 11, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

The nominal amount of the filing is for $250 million and the company will take the proposed ticker "GU" on the NYSE.  Merrill Lynch has been tapped as the lead underwriter in the syndicate and co-managers are listed as CIBC World Markets and Piper Jaffray.  So, take a look at the description and you will see what the potential excitement is:

• China’s largest biodiesel producer as measured by annual production capacity in 2006 by Frost & Sullivan…..
• One of the first commercial biodiesel producers in China; commenced operations in 2001 predecessor company, Sichuan Gushan Vegetable Fat Chemistry Co., Ltd., or Sichuan Gushan).
• Aggregate annual biodiesel production capacity increased from 40,000 tons in 2004 to 70,000 tons, 170,000 tons and 190,000 tons as of 2005, 2006 and 2007, respectively.
• Produced and sold 36,045, 61,119 and 158,994 tons of biodiesel in 2004, 2005 and 2006, respectively, and 136,587 tons of biodiesel in the nine months ended September 30, 2007. REVENUES: revenues and net income increased substantially during the same period…. generated revenues of RMB172.2 million, RMB360.8 million and RMB824.5 million (US$110.0 million) in 2004, 2005 and 2006, respectively, representing a compound annual growth rate, or CAGR, of 118.8%, and generated revenues of RMB736.4 million (US$98.3 million) for the nine months ended on September 30, 2007.
• Net income of RMB74.2 million, RMB152.5 million and RMB332.8 million (US$44.4 million) in 2004, 2005 and 2006, respectively, representing a CAGR of 111.8%, and recorded net income of RMB250.1 million (US$33.4 million) for the nine months ended on September 30, 2007.
• TARGET: to increase annual production capacity to 400,000 tons by the end of 2008.

We frequently discuss more detailed and IPO previews with back door plays for our open email distribution list if you wish to join.

Jon C. Ogg
December 4, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the 24/7 Wall St. Special Situation Investing Newsletter and he does not own securities in the companies he covers.

• Aventine Renewable (AVR) current year cut from $0.95 EPS to $0.76 EPS; next year cut from $0.55 EPS down to -$0.15 EPS.
• Pacific Ethanol (PEIX) current year cut from $0.16 EPS to $0.05; next year cut from $0.35 EPS to -$0.35.
• Verasun (VSE) current year cut from $0.46 EPS to $0.35; next year cut from $0.70 EPS to $0.15 EPS.

The cut estimates reflects a continued cautious rating on the sector as Goldman Sachs believes a long anticipated oversupply has arrived.  They note that ethanol capacity growth needs to come to a halt and existing capacity needs to run at lower utilization rates.

Goldman Sachs says its earnings projections are now significantly under First Call estimates.  Does that mean even more downgrades on the way from other research firms that have already cut them?  We have had a serious concern for some time about corn-based ethanol in the US.  Other ethanol is profitable elsewhere and without the subsidy this sub-sector of the industry would likely have some viability issues.  This is also a very political topic and the argument could be tossed up that if Iowa primaries weren’t so important that this would be deemed as snake oil.

Articles of interest:

• Yesterday in  "The Business of Global Warming"
• T. Boone Pickens still an oil and alternative energy bull
• Goldman Sachs recently lifted its oil super-spike price to $135 per barrel
• Ethanol Stocks Drowning in their own tanks
• Other ethanol stock downgrades

Jon C. Ogg
September 27, 2007

New Poll Finds Most Favor Nuclear Energy To Meet NJ’s Rapidly Increasing Electric Demand

American Superconductor Corporation (NASDAQ: AMSC), a leading energy technologies company, today introduced a Static VAR Compensator (“SVC”) product line. AMSC also announced that it has received its first transmission-level SVC order from Bonneville Power Administration (BPA), operator of 75 percent of the high voltage transmission grid in the Pacific Northwest.

Costco (NASDAQ:COST) and PermaCity team to deliver 2.4 Megawatts of Solar Electric Power to La Habra, Westlake Village, Simi Valley and Culver City Costco Warehouses.

Encore Energy Systems, Inc. (OTC: ENCS) issued a stockholder update: Jack Tarry, CEO said: "We remain on a rapid and strong path of growth and expansion. We will continue updating stockholder on our progress. We have many exciting developments to report in the coming days and weeks. This update further demonstrates our ability to set goals and deliver accordingly."   This sounds more like noise rather than news.

BP (NYSE:BP) and the Massachusetts Institute of Technology (MIT) announced a major research partnership around energy conversion technologies. The program will explore the conversion of low-value carbon feedstocks such as petcoke and coal to high-value products such as electricity, liquid fuels and chemicals while minimizing carbon dioxide emissions.

Baard Energy, L.L.C. has acquired a technology license from Shell U.S. Clean Coal Energy Inc., part of Royal Dutch Shell (NYSE:RDS), to use its Coal Gasification Process in the gasification portion of its proposed $5 billion coal-to-liquid fuel (CTL) project located in Columbiana County, Ohio.  The project will produce over 50,000 barrels per day of jet and diesel fuel, and other liquid products from coal and biomass feedstock.

Green Private Equity Fund, With A Hockey Twist

Jon C. Ogg
September 25, 2007 

As a reminder, whether you prefer the term "Global Warming" or"Climate Change" is not the issue as far as 24/7 Wall St. covers it.Green business has become big business, and this affects many publiccompanies today.

Sectors of particular interest for the firm include:

• Green consumer products,
• Eco-friendly building materials,
• Alternative energy,
• and Industrial environmental services.

ECP is actively seeking growth and buyout transactions that require equity investments of $10-25 million, but the firm has the ability to complete larger transactions.

The firm will be led by Managing Partners William Staudt, an entrepreneur with extensive private equity and operating experience, and Robert Egan, formerly of J.P. Morgan Partners, LLC. The firm’s Partners include Dr. Stephen Kellert, a senior professor at the Yale School of Forestry and Environmental Studies, and former New York Ranger, Michael Richter, a recognized figure in the environmental community and frequent speaker at environmental events.  Mr. Richter was considering a run for Congress when he was first approached about forming ECP. If you watch hockey you might find the greening or environmental efforts somewhat amusing considering the fights.

New York Private Bank & Trust Company is the largest privately owned bank in the nation. Howard Milstein, President and CEO of NYPB&T, and Barry Friedberg, a Director of NYBP&T, and the former chairman of the Investment Banking Division and member of the Executive Management Committee at Merrill Lynch & Co., will serve on ECP’s Investment Committee along with Messrs. Egan and Staudt.

If you are interested in our daily coverage in alternative energy you can set your RSS feeds to:
http://www.247wallst.com/alternative_energy/index.html

If you’d like to see our coverage in the sector for a quick review visit the following:

• The Business Day In Global Warming (AEP, ARSC, SPLS, AKNS, JNPR, PWER, MCEL, YGE)
• Some Ethanol Names Drowning In Their Own Tanks (USBE, PEIX, VSE, AVR)
• The Business Day In Global Warming (EEE, AECOX, GE, VOLV, SOLF, FTEK, AW, PCG, PGN)
• T. Boone Pickens Still Bullish on Oil, AND on Alternative Energy (CLNE)

Jon C. Ogg
September 25, 2007