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Rona Fried, Ph.D., is editor of Progressive Investor and CEO of Known for her wide-ranging, deep knowledge of sustainable business, she speaks and writes on topics related to green business, green jobs and green investing. She writes the "Investing in Clean... More
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  • Ramped Up Solar Inverter Supply May Overshoot Demand in 4Q

    Inverter capacity will be ramped past 30 gigawatts (GW) this year and inverter production may exceed actual demand by more than 2 GW in 4Q10 leading to large inventory build, according to a new report from IMS Research.

    This effect reverses the earlier inverter shortage seen in the first half of 2010 and is set to impact the industry as it heads for a major slowdown in demand in 1Q11.

    According to IMS Research, inverter production capacity has more than doubled in 2010 and by the end of the year will exceed 30 GW. Based on the expansion plans of more than 30 top suppliers, capacity is set to grow another 40% in 2011.

    However, significant double-ordering occurred in 1H10 as customers panicked to secure inverters as the German market boomed. Now that German demand is slowing, these additional orders are starting to be cancelled as warehouses fill up with unwanted inverters.

    “Although inverter shortages were evident in the first half of this year due to a bottleneck in component supply, an oversupply of inverters is now very possible and inventory is starting to build at customers," PV Research Director Ash Sharma said. "Suppliers continue to ramp capacity and production at an alarming rate given market demand is now starting to wane. Installation demand is predicted to be 13% higher in the second half of the year compared to this first half. However, planned inverter production is forecast to be 56% higher.”

    Looking past 4Q, the picture for inverter companies looks bleak in the short term. Production capacity has been massively increased, with all leading suppliers expanding facilities and many new entrants to the market. This increasing supply, however, is likely to meet falling, or at best, stable demand in 2011 and a large fall in prices seems likely as a result.

    As such, inverter suppliers will need to brace themselves for a sharp fall in profits in 1Q11, with IMS Research predicting the lowest level in seven quarters. A major fall in demand, coupled with intense pricing pressure and additional costs of expanding capacity will undoubtedly see a slide in supplier gross margins.

    Two of the companies that have ramped up to meet demand include Satcon (NASDAQ CM: SATC), which signed a Chinese manufacturing agreement with GCL Solar, and Power-One, Inc. (Nasdaq:PWER), which is opening an new manufacturing facility in Phoenix, Arizona.

    Disclosure: no positions
    Tags: Q, PWER
    Nov 11 12:37 PM | Link | Comment!
  • Quebec Wind Industry To See $10B Investment by 2015

    By 2015 the wind industry in Quebec, Canada, will develop 4,000 megawatts (NYSE:MW) of generating capacity, resulting in $10 billion in new investment, thousands of new jobs and other benefits, according to a new study. The survey of projected economic impacts, commissioned by the Canadian Wind Energy Association (CanWEA), determined that wind farm construction will create more than 37,000 jobs between 2005 and 2015. More precisely 5,210 jobs per year would be created between 2011 and 2015. In addition, nearly 1,400 permanent wind jobs will be created in the operation and maintenance of the installations. Finally, by 2015, landowners and municipalities will stand to earn up to $25 million in annual royalties from these wind energy developments.

    Currently Quebec has 663 MW of installed wind energy capacity, generating enough electricity to satisfy the needs of approximately 230, 000 homes. The study released today also quantifies the economic benefits of the wind energy industry in Quebec for the period 2005-2010.

    Some of the players in Quebec's wind industry include:

    • Renewable Energy Systems Americas Inc., which recently acquired a contrator specializing in wind farm construction.
    • Pioneer Power Solutions, Inc. (OTCBB: PPSI), which acquired Quebec wind turbine makerAAER Inc. in June.
    • REpower Systems AG (RPW.DE), which is developing more than 900 MW of wind power in the province.
    • TransAlta Corporation (TSX: TA; NYSE: TAC), which acquired power generation company Canadian Hydro.

    CanWEA advocates that Quebec continue to develop wind power beyond 2015 by adding an additional 8,000 MW by 2025. This new phase would generate $25 million in investments and would create 90,000 jobs during the construction phase, or more than 9,140 jobs per year between 2016 and 2025 as well as 4,500 permanent operations and maintenance jobs by 2025. The economic benefits for landowners and municipalities would climb to $95 million per year.

    Disclosure: no positions
    Tags: TAC
    Nov 05 1:11 PM | Link | Comment!
  • US Cleantech Venture Capital Falls 55% in 3Q

    Read more green business news at

    U.S. venture capital (NYSE:VC) investment in cleantech companies in 3Q10 fell to $575.6 million in 53 financing rounds, a 55% decrease in capital and a 22% decrease in deals compared to 3Q09, according to newly released figures.

    Ernst & Young LLP assembled the analysis based on data from Dow Jones VentureSource.

    "This quarter reflects the ongoing volatility in cleantech investment that we have observed over the past two years, depending on the presence of the very large transactions we see in cleantech," said Jay Spencer, Ernst & Young LLP's Americas Cleantech Director. "However, a number factors point to the continuing strength in the U.S. cleantech sector, including growth in Energy Efficiency investments and corporate involvement throughout multiple industries--from utilities to technology to consumer products."

    Later stage financings predominate

    Later stage venture financings continued to drive U.S. cleantech investment. There was $407 million invested in 25 later stage deals, which accounted for 48% of deal activity and 70% of capital invested. The Industry Products and Services segment saw the greatest number of later stage rounds, with nine transactions raising $99.5 million.  

    Energy Efficiency gains in both financing rounds and capital invested

    The Energy Efficiency segment attracted the most financing activity with 17 deals raising $161.7, increases of 21% and 6%, respectively. The largest deal in this segment was closed by Smooth-Stone Inc. a developer of low-power data center chips based in Austin, TX, which raised $48 million. Large corporate investments in Energy Efficiency technology also shaped Q3 '10 investment trends. GE (NYSE: GE) announced plans to invest $432 million over the next four years to research, design, and manufacture energy efficient refrigerators in the U.S.

    Energy/Electricity Generation—smaller, early stage deals

    While deal activity in the Energy/Electricity Generation segment grew 27% to 14 rounds, capital invested fell 39% to $203.9 million as investors focused on smaller, earlier-stage deals, including two seed round, two first rounds and five second round deals. Solar companies represented the majority of investments in this segment, with 10 deals raising a total of $150.1 million. The largest deal of the entire quarter was a $65 million third-round later stage deal by Solaria Corp., a Fremont, CA developer of solar photovoltaic solutions.

    Sizeable corporate investments in Energy/Electricity Generation companies are helping advance the US cleantech sector. For example, NRG Energy, Inc. (NYSE: NRG) agreed to pay $350 millionfor Texas-based Green Mountain Energy, an alternative energy generation and distribution company, while the Sharp Corporation (6753.T) announced a $305 million purchase of Recurrent Energy, a California-based photovoltaic power project developer.

    Other cleantech segments had a challenging quarter. Investment in the Industrial Products segment fell 72% in terms of capital to $116.9 million and 50% in term of financing rounds to 12. The Alternative Fuels segment raised $50.5 million in three deals.

    Strong corporate engagement

    Approximately 23% of the VC cleantech deals in 3Q10 included participation by corporate investors, including BASF Venture Capital GmbH, Intel Capital and General Motors Venture Group, which all did two deals apiece. Corporate investor participation increased from 15% in 3Q09. Another indicator of corporate interest in cleantech was GE's announcement of a $200 million smart grid fund along with Emerald Technology Ventures, Foundation Capital, Kleiner Perkins Caufield & Byers, and Rockport Capital.

    Cleantech momentum in other asset classes

    U.S. mergers and acquisitions activity in 3Q10 was reflective of the corporate engagement in cleantech investment. Nine deals closed, of which the disclosed amounts totaled approximately $1.9 billion, according to IHS Herold. These deals include the acquisition by Nebraska-based ethanol producer Green Plains Renewable Energy (Nasdaq: GPRE) of Global Ethanol, LLC, of Minneapolis, MN for $166.4 million.

    Two cleantech initial public offerings took place in the US during 3Q10, according to Bloomberg New Energy Finance: Ameresco (NYSE: AMRC), an energy efficiency and renewable energy company in Framingham, MA, raised $87 million; and biofuels developer Amyris Biotechnologies (Nasdaq: AMRS), based in Emeryville, CA, raised $84.8 million. Companies that have announced or filed for IPOs during the quarter include Gevo Inc., SemiLEDs, Molycorp, and PetroAlgae.  

    Regional breakdown

    Regionally, California experienced a significant decline in investment, with deals falling 44% to 21 and dollars falling 71% to $295 million. In comparison, California had five deals over $50 million one year ago, including the $286 million financing of Solyndra.

    Massachusetts came behind California with eight deals and $87.6 million, a 50% increase in deals and a 65% increase in capital invested compared to 3Q09. New Hampshire and Texas followed with investment of approximately $50 million each.

    Disclosure: no positions
    Nov 02 11:14 AM | Link | Comment!
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