vitamin_j

Obama's Green Obsession: More Harm Than Good?

What a poorly reasoned article. Yes, if we just understood the "real scientists" we'd see that smoking doesn't cause cancer - we should really do some more studies - and that we really should do a few more decades of research to see exactly what all this manmade CO2 is doing to our atmosphere before we sound any alarms. Really, this is just Exxon or Tobacco level reasoning, where you throw a few isolated "scientific" facts/statistics in to give credibility (yes, with a few stats in paragraph XI you've really exposed the hidden lies behind a whole industry).

Once I got past the windy and in this case unnecessary theoretical discussion (mostly ornamental, dressing up a weak argument in fancy terms), you seem to argue that Obama should not try to jump start an alt energy industry because coal and gas have already reached economies of scale. Basically, we wouldn't want to alter the status quo; after all it's already so well established.

This ignores the fact that some pretty modest government support has already brought solar within sight of becoming an economy of scale, with all the same advantages that supposedly can only exist with coal and gas. And that future support is intended to get them to the point of being self-sufficient economies of scale. That's with today's technology mind - that's not mentioning efficiency or manufacturing improvements, or recent advances like the discovery at MIT of a better catalyzed hydrogen production that could work with solar power. Finally, talking about any form of energy generation as if it exists without massive government incentives and direct or indirect support is just naive. The coal, gas, nuclear, and oil industries are already just as supported by government as your supposed anti-free market green sources would be.

You also seem to think that building alt energy generation, at least in the timeframe Obama discusses, means massively decommissioning coal and gas plants and immediately eliminating those industries. This is just not the case, and nobody serious is saying it will be anything but a very phased process. It just serves your argument that Obama's plan will kill jobs, which is the standard entrenched corporate interest argument against doing anything. You give a hysterical, straw man version of the plan so you can easily knock it down.

Finally, your article has no mention of carbon costs. They probably don't exist to you, but the Pentagon and the CIA are already planning for the security ramifications of global warming, insurers are already adjusting actuarial tables for it, and investment banks are already growing leery of financing coal plant building. Though I would argue that the equation is already in alt energy's favor, it really really becomes in alt energy's favor once you factor in the previously externalized cost of carbon.

Really, I could go on, but I'd like to get a sandwich. Very poor. You should read Neal Dikeman on cleantechblog. He's also a skeptic of the Obama plan, but at least he can write.

Solar Technology: Cutting Costs the Unsexy Way

Thanks for the response. I am definitely watching those SGA expenses - I don't see how they can improve much in Q4, however I think they will improve over the year. Taking the Q3 call at face value, about a million of their loss (working from memory, not reference) resulted from their mispricing - they expected panel prices to drop over the year, and panel prices did not. Forgive my inexperience, but is that an ERP problem, or just an unfortunate economic call on their part? They also had problems with sales commissions and with installers working overtime - essentially, too much business, too few installers = lots of overtime. Also stock compensation for their departing CFO, among others. Growing the business in that state is a recipe for growing losses, I agree, but I tend to attribute it to growing pains, a temporary state, etc. I believe more "steady state" quarters are on the way that will show better results.

I will take a look at those inventory figures - that's very interesting, and a question I hadn't considered enough, or perhaps not in the right way. I'd also note that they are clearing inventory to make way for their new panels, so I expect that to also weigh on Q4.

I hold some AKNS, so I tend to believe that they made good investments for growing the company long term - they opened a lot of offices in '07. They say each office takes 6-12 months to really get up and running, so I anticipate that those 6 or so offices will stop dragging and start showing more results. I also think that they've got a marketing/sales operation that's sized for the larger company they anticipate being, say by the end of this year. It's an aggressive approach, for sure, but I knew I was buying aggressive when I bought this one.

I also tend to buy into their story about the Andalay panel - it will reduce costs, time, and bring licensing money that will bolster the bottom line. I do however wonder if it's the competitive advantage they claim - after all, REC Solar has come out with a "Solarak" system that also reduces installation costs - so once everyone has an efficient system, then where is Akeena? But I don't know any more about that REC system than what the PR says right now. Maybe Andalay is still the best design out there. At the least it will help Akeena get installation costs down.

Also - is Andalay the "vaporware" you're talking about? I'm about as far from the Valley as you can be, so maybe the term is lost on me. But Andalay exists and is going into the OS, so to speak. Or do you mean the "patent pending" aspect of it? Or some larger metaphorical usage of "vaporware"?

Finally, longer term, I think Akeena will do best if they focus more on being a design company, and not stake their business solely on the "hardware / construction" aspect you mention. That's the way they're trending with Andalay, and they need to keep that up if they're going to make it longterm (or get bought by someone with that view). For example, before someone installs a system on their house, have a thorough energy audit, do everything possible to boost efficiency, so you install the Kws you reasonably need (maybe that's already industry practice). Or with coming things like plug-in hybrids - they need to (maybe they are) get an integrated/plug n play/andalay style carport charging station. Partner with General Motors on it. Basically, diversify, partner, license - think there's a lot with efficiency, monitoring, allocating (a non-technician talking here), financing, carbon-auditing, consulting, and more that would go hand-in-hand with small, distributed PV systems - and that could help buffer them against the ups and downs of the installation business.

Thanks again for your previous response.

Solar Technology: Cutting Costs the Unsexy Way

Mr. Whitehill, I found your comment very interesting.

I'm wondering: are you implying that Akeena is, in your opinion, a "top heavy" company? If so, could you elaborate on why you believe this? Is it specific to their "inventory problem," or general to the company as a whole (sales, marketing operation, etc.)? Thank you very much for your insights.

-A small-time Akeena investor