By Paul Carton
ChangeWave’s latest Alternative Energy survey shows strong growth in 2010 for the Wind and Solar sectors, coupled with momentum for Smart Grid technologies.
Not surprisingly, the industry’s upbeat growth picture is still largely reliant on government stimulus investments and other government incentives to keep it moving forward.
A total of 195 respondents who work in the Alternative Energy industry participated in the January survey.
Industry Trends – Solar and Wind Lead
Industry respondents report the Wind (49%) and Solar (45%) sectors have experienced the most rapid economic growth over the past year – although the percentages saying this are down slightly since our previous survey in June 2009.
Looking ahead, industry respondents continue to believe Solar (52%; down 1-pt) will achieve the most rapid economic growth over the next 2 years. Wind (39%; up 3-pts) remains second in terms of future growth prospects, followed by Hybrid/ Electric Vehicles (31%; down 3-pts).
We also asked industry respondents how they think their own company's products and services will do in the marketplace going forward, and found an improved outlook compared to our previous survey in June 2009.
- A total of 45% project an Increase in sales of their company’s products and services over the next 90 days, while only 2% foresee a Decrease – a net 4-pts better than previously.
- In yet another bullish sign, there has been a major uptick (17-pts) in the percentage of industry respondents who think their capital budget will increase over the next 90 days.
Continued Reliance on Government Initiatives
Three-in-five (59%) industry respondents believe the Federal Government will be the biggest driver of Alternative Energy technologies going forward. To put this in context, only 25% thought similarly back in August 2008.
At the same time, four-in-five (79%) see the Obama administration continuing to provide a Substantial or Moderate investment in energy infrastructure over the next 2 years – yet another indication of high industry expectations for, and reliance on, government investment.
A Closer Look at Solar
We asked 96 respondents working in the solar industry a series of additional questions on their sector – and in an upbeat finding, 94% now see U.S. government subsidies accelerating demand for Solar Photovoltaic (PV) products over the next 12 months.
The companies expected to see the highest rate of sales growth in the solar industry are First Solar (FSLR; 42%), SunTech Power (STP; 23%) and SunPower (SPWRA; 22%), according to industry respondents.
- First Solar is a leader in low-cost Photovoltaics (PV), based on its combination of thin-film technology and large manufacturing scale. One of the dominant solar players based in the U.S., FSLR is aggressively pursuing new solar project business.
- SunTech is among the world's largest PV manufacturers and it's well positioned in its home base of China – the fastest growing solar market in the world. Importantly, with its low-cost production, superior distribution channels, and new initiatives in the U.S. market, STP is emerging as a global force in the solar industry.
- SunPower, a leading U.S. solar firm whose strength lies in its ability to manufacture high-efficiency solar cells, has a strong network of suppliers and installers that gives it an advantage in both the residential and corporate markets.
Smart Grids and Energy Infrastructure
The overwhelming majority of respondents expect ‘Smart Grid’ technologies to continue to be a major beneficiary of spending going forward, with 89% projecting a spending Increase over the next year.
”Cree is a classic technology company that initially struggled to refine its products and to control costs so it could successfully compete in the major lighting markets," says ChangeWave Analyst Josh Levine.
But beginning in 2004, ChangeWave Research data showed that LED lighting would gain broad adoption, and today we're seeing this growth in action. Cree is now a likely takeover candidate by a major lighting player seeking to get a foothold in the next generation of lighting.
On the U.S. stimulus front, one major winner in the race for government dollars is Itron, a leading developer of smart meters and the infrastructure enabling communication between customers and utilities.
Another company with momentum is Echelon, which recently entered a long-term agreement with electric utility Duke Energy (DUK) to supply smart meters as part of Duke's smart grid program. Duke has also received a $200 million stimulus award for the smart grid improvements in which Echelon will play a key part.
A key goal of the U.S. stimulus package is to boost efficiency across the electric-power grid. And one of the major battery manufacturer and innovators in electrical storage – Johnson Controls – is developing better lithium and advanced batteries for the grid and for automobiles. The survey results point to increasing sales for Johnson Controls going forward, and industry respondents expect it to remain a major player in the sustainable hybrid and electric vehicle industry in the U.S.
Andy Golub co-wrote this article.
Disclosure: No Positions