Lehman Collapse Causes Funding Difficulties for Renewable Energy Companies

By Ucilia Wang

The fall of Lehman Brothers [LEHMQ.PK] has raised serious concerns for renewable-energy companies seeking to raise money in the near future. But that won't stop some firms from trying.

Until it filed for bankruptcy protection last week, Lehman had been a popular underwriter for companies raising funds by issuing shares or borrowing money. The investment bank's collapse prompted statements from companies such as SunPower (SPWR) and Evergreen Solar (ESLR) explaining the financial impact of Lehman's fall (see Lehman's Fall to Create Greentech Woes).

Investors said the market's turmoil will likely suppress any appetite for initial public offerings for now. Solar and wind-energy companies also will likely find it difficult to raise money in the near future to build power plants or factories. 

Some companies don't want to wait until the markets stabilize. LDK Solar (LDK), for example, announced last week that it intended to raise $200 million (see LDK Wants $200M More for Manufacturing).

Startups might have an easier time raising money from venture capitalists, who typically don't expect immediate returns on their investments.

Here is some other funding news:

PUBLIC:

• Ormat Technologies, (ORA) a geothermal power developer in Reno, Nev., intends to raise $1.5 billion, the company said in a filing with the U.S. Securities and Exchange Commission (see Ormat Technologies Seeks $1.5B). The filing will enable Ormat to raise money by issuing shares or borrowing money, but the company hasn't specified how it plans to obtain the capital.
• Capstone Turbine Corp. (CPST) expects to raise $29.5 million in net proceeds from selling about 21.49 million shares of common stock and issuing warrants to buy an additional 6.45 million shares of common stock. The Chatsworth, Calif., company makes micro wind turbines.

Comments

[playtohavefun:]

It does not seem to be the case. For instance, it is not that LDK Solar (LDK) intended to raise $200 million. It has already raised $200m. As a matter of fact, LDK sold 4.8 million shares, which exceeded the 3.8 million it planned to sell.

2008 Sep 23 07:06 AM

[roebling:]

Is there no fact-checking involved in these pieces? Capstone makes Brayton cycle microturbines powered by gaseous or liquid fuels (or in a potential application, air heated by solar energy). They have NOTHING to do with the wind.

2008 Sep 23 07:31 AM

[annyone:]

look at the headlines "Lehman Collapse Causes Funding Difficulties for Renewable Energy Companies" is this a news, which only effects Renewable Energy.

2008 Sep 23 08:20 AM

[gebby:]

global warming exists and governments are mandating investment in alternative energy. how is it that these companies with the best of all prospects wont attract investor dollars? these companies announce that the leh collapse will impact earnings by about .05 cents for 2009. this article should read "solar investments still bright despite lehman collapse". citibank raised eslr rating last week. another brokerage is forecasting earnings of .90 in 2010 for eslr. ldk is strong.

2008 Sep 23 08:31 AM

[tessant:]

i'm getting on the gebby train. long ldk.

2008 Sep 23 02:23 PM

[TheCrystalNut:]

Do your research. Capstone does not make micro "wind" turbines.

The Capstone MicroTurbine™ is a compact, turbine generator that delivers electricity onsite, or close to the point where it is needed. Our MicroTurbine is suitable for applications ranging from remote locations to city centers, delivering clean, high quality power from a wide variety of fuels, with superior safety and emissions. It offers the best value for clean and reliable small-scale power production. Features including maintenance-free air bearings, the lowest emissions of any non-catalyzed fossil fuel combustion, and digital power conversion combine to produce the optimal small-scale generator.

2008 Sep 23 03:58 PM

[Brian Pursley:]

Oil and gas are renewable and the companies in the sector are well funded.

"Enormous implications follow from oil and gas being renewable resources." -- Peter R. Odell, 2004

2008 Sep 23 09:30 PM

[Malanthus:]

Yep, the author dropped the ball on CPST. CPST has good technology, but they do NOT make wind turbines. They make turbines that run off of just about any flammable fuel. They are R&Ding Concentrated Solar Power (CSP) applications now, using CSP super heated air to run the turbine. This application does not apply to PV solar though. Anyway, the idea is that it is suppose to run more efficiently than the current CPS technology.

2008 Sep 25 01:09 PM

[longtermstocks:]

Go CPST!!

2008 Sep 26 11:18 AM