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Beyond Solar Death… More Federal Loan Guarantees For Solar (UTX, SRE, STP, FSLR, NVE, PLD, BAC)

Administrator — Thu, 29 Sep 2011 16:02:20 +0000

Despite the debacle with a $535 million loan guarantee to now-bankrupt Solyndra, the US Department of Energy is pressing ahead with loan guarantees to solar projects ahead of tomorrow’s deadline. Two guarantees were announced yesterday and six more remain in the hopper. Some Republican congressmen have accused the Obama administration of rushing the loan guarantees to beat the looming deadline.

The loans approved yesterday include a $737 million guarantee to privately held SolarReserve LLC, a joint venture between United Technologies Inc. (NYSE: UTX) and private equity firm US Renewables Group. The second approval, for $337 million, was awarded to Sempra Energy (NYSE: SRE), which plans to use solar panels manufactured in Arizona by China’s Suntech Power Holdings Co. Ltd. (NYSE: STP).

To date the US DoE has invested some $40 billion in 40 clean energy projects, including solar PV and solar thermal, geothermal, wind, and a new nuclear power plant. First Solar Inc. (NASDAQ: FSLR) lost a $1.9 billion federal guarantee for its Topaz project when it apparently let its application lapse as it negotiates a deal for private capital.

SolarReserve’s Crescent Dunes project is a 110-megawatt concentrating solar power tower that will use molten salt as its heat transfer and storage medium. The molten salt allows the plant to store heat generated by the sun during the day and then use the heat at night to generate steam to produce electricity. The project is expected to employ 600 people during construction and 45 people in permanent positions once the plant is operational. The project is located near Tonopah, Nevada. SolarReserve has a power purchase agreement with NV Energy, Inc. (NYSE: NVE).

Sempra’s Mesquite Solar project is a 150-megawatt solar PV farm located near Phoenix, Arizona. It is expected to provide about 300 construction jobs and will purchase at least a portion of the required panels from the recently opened Suntech manufacturing plant. Sempra has a 20-year power purchase agreement with Pacific Gas & Electric Co.

Of the projects awaiting decisions from the DoE, SolarCity’s $344 million project to install rooftop solar panels on military base housing will not meet tomorrow’s deadline. Two more projects from First Solar remain in the running. Both the 230-megawatt Antelope Valley project, with a conditional guarantee of $680 million, and the 550-megawatt Desert Sunlight project, with a partial guarantee of $1.88 billion, are still in the running. Sunpower Corp. (NASDAQ: SPWRA) is seeking a guarantee of nearly $1.2 billion for its 250-megawatt California Valley Solar Ranch project.

Perhaps the most interesting project remaining in play is Project Amp, a $2.6 billion project to finance solar installations on US commercial and industrial rooftops. The project is owned by ProLogis (NYSE: PLD), and is seeking a guarantee of up to 80% on $1.4 billion in debt financing that is being underwritten by Bank of America Corp. (NYSE: BAC).

It’s also worth noting that tomorrow’s deadline for federal action applies only to so-called Section 1705 projects. Newer technologies like concentrating solar PV fall under Section 1703 of the law and will still be eligible for consideration.

The barometer for solar is often in the Guggenheim Solar (NYSE: TAN) ETF and it is more of an agnostic solar player that wins only if the whole sector (or its largest components) have share gains. Its shares are up 0.6% at $3.45 today, but shares also hit a new 52-week low of $3.40 and are down from over $9.00. This has been brutal so far, and things aren’t getting better for the solar makers.

Paul Ausick

Filed under: Alternative Energy, Green Biz, Politics, Regulation, Utilities Tagged: BAC, FSLR, NVE, PLD, SRE, STP, UTX

The Smart Grid Surge Hitting Home (ITRI, COMV, ELON, ED, CEG, DUK, FPL, NVE, POM, SO)

247wallst — Tue, 27 Oct 2009 19:37:50 +0000

We are seeing at least some significant moves from the company’s who have announced that they are grant recipients under part of the $3.4 billion Smart Grid pledge from the Obama administration day. We are seeing the big moves in the companies which traders and investors believe will receive the direct orders from the utilities, and are even seeing gains down in the utilities and power companies who are getting direct grants.

Itron Inc. (NASDAQ: ITRI), for smart metering systems, was up 3% at $59.56 with a $2.38 billion market cap. Comverge, Inc. (NASDAQ: COMV), for peaking and base load capacity solutions to electric utilities, operators, and electric markets, is up 10% at $12.95 with a $286 million market cap. Echelon Corporation (NASDAQ: ELON) is up 7% at $14.70 with a $598 million market cap.

In the utility sector we are seeing the following moves:

Consolidated Edison Inc. (NYSE: ED) up 0.3% at $41.47; $136 million grant vs. $11.4 billion market cap.
Constellation Energy Group, Inc. (NYSE: CEG) up 0.4% at $32.03; $200 million grant vs. $6.45 billion market cap.
Duke Energy Corporation (NYSE: DUK) up 0.15% at $15.95; $200 million grant vs. $20.7 billion market cap.wins $200 million smart grid grant
FPL Group Inc. (NYSE: FPL) down 2.2% at $50.95; $200 million grant vs. $21 billion market cap.
NV Energy, Inc. (NYSE: NVE) up 1.3% at $11.52; $138 million grant vs $2.7 billion market cap.
Pepco Holdings, Inc. (NYSE: POM) up 0.4% at $14.51; $168 million grant vs. $3.2 billion market cap.
Southern Company (NYSE: SO) up 0.35% at $32.69; $165 million grant vs. $26 billion market cap.

Many of the beneficiary companies have not reported yet their awards.

Jon C. Ogg
October 27, 2009

Posted in Green Biz, Politics, Utilities Tagged: CEG, COMV, DUK, ED, ELON, FPL, ITRI, NVE, POM, SO

Goldman Sachs Mixes Calls in Oil and Utilities (RIG, PTEN, HAL, OIS, NBR, DO, FTI, WR, NRG, NVE)

247wallst — Thu, 25 Jun 2009 12:22:07 +0000

Goldman Sachs has made several key upgrades and downgrades this morning in the utility sector and in the oil patch. While the utility sector was raised to attractive, some of the other calls seem more mixed on the surface in the oil patch.

Transocean (NYSE: RIG) was one of the few real upgrades as shares were raised to Buy from Neutral. Patterson-UTI (NASDAQ: PTEN) and Halliburton (NYSE: HAL) were cut to Neutral, while Oil States International (NYSE: OIS) was cut to Sell. Nabors Industries (NYSE: NBR) was cut to Sell from Neutral. Diamond Offshore (NYSE: DO) and FMC Technologies (NYSE: FTI) were both upgraded, but only to Neutral from Sell.

Westar Energy (NYSE: WR) and NRG Energy (NYSE: NRG) were both raised to Buy, while NV Energy (NYSE: NVE) was cut to Neutral.

Jon C. Ogg
June 25, 2009

Posted in Analyst Calls, Oil & Gas, Utilities Tagged: DO, FTI, HAL, NBR, NRG, NVE, OIS, PTEN, RIG, WR