This is a guest post written by Nick Blitterswyk, founder and CEO of Urban Green Energy (UGE).
The distributed renewable energy (DRE) industry has gone through significant changes in the last five years, as the industry grew from a cottage industry to one with worldwide revenues of $100 billion and rising. The market has come back down to earth from the highs of 2005 to 2009, when investors' bets on technology companies and manufacturers went sour as supply outstripped demand. As the latter continued to grow, profitable business models and clear leaders have emerged, and along have come opportunities. Successful IPO's have countered a lackluster clean tech investment environment, showing that there is success to be had for companies with a winning formula.
SolarCity is one stellar example: they took a pretty simple piece of technology, rooftop solar panels, and became the leading solar installer in the U.S. by revolutionizing the financial vehicles that allow customers to receive a system with no money down, at less cost than their current electricity rate, and without having to go through all the paperwork necessary to monetize government incentives. Financing provided by SolarCity is much more than a revenue growth accelerator, it's at the core of the business model itself. By focusing only on states that offer adequate government incentives, a relatively small market when compared to the global potential of clean tech, SolarCity has seen its sales, and stock, succeed. Shares in SolarCity are up more than 200% since their IPO in late-2012. Delving beyond their annual revenues, SolarCity has surpassed $1 billion in solar energy systems deployed last year.
At the opposite end of the spectrum we see companies with a strong technology background that failed to figure out an adequate business model. Take Southwest Windpower, a GE-backed distributed wind turbine manufacturer, once tipped to be the next big thing in renewable energy. While their technology was second to none, their focus on wind turbine supply, rather than on solving their customers' problems, led to disappointing growth.
Another example is solar manufacturer SunTech, which recently defaulted on its debt obligations. SunTech's management focused exclusively on their product, pushing to lower costs and finding itself engaged in a battle with competitors that ultimately eroded profit margins. Throughout the renewable energy world, several manufacturers have made the mistake of waiting for customers, a fatal decision in the face of commoditization and over-supplied markets.
Companies like New York-based UGE merge technology with a customer-focused business model. In order to reach scale, UGE focuses on specific market opportunities by looking for technological challenges and high barriers to entry. A specific example are telecom towers in developing countries, where users are most in need of cheaper and more secure energy.
We oft hear of the penetration rate of cell phones in emerging markets, but what we don't hear about is the enormous challenge involved in powering the towers that support those phones in countries where the grid is unreliable and, in many places, unavailable. In many cases, these towers are powered by diesel at a very high cost. UGE has taken a leadership position in powering towers with its technology, using off-grid wind turbines and solar energy storage. Clients include Carlos Slim's America Movil; while most of these sites are in developing countries, the company also works with Verizon in the U.S. for some of its remote sites.
UGE's technology goes beyond remote telecommunication sites. The same hybrid technology platform that delivers cost savings to telecom companies is also being used by multinationals such as Hilton and BMW to lower costs and become more sustainable. Similarly, with financial firms like TD and Citibank vying for the title of "greenest" bank, wind turbines and solar energy storage systems are being used to protect bank branches against power outages with the added benefit of assisting their sustainability efforts. UGE has achieved this by matching its technology to its business model, designing products like the Sanya Skypump EV charging station jointly with GE.
Altogether, DRE can no longer be looked at as a small industry. Counting with greater energy choices is sure to create ripples that will alter the way utilities like Consolidated Edison and Duke Energy operate. With onsite energy, companies are now able to choose where their energy comes from, and by incorporating onsite storage those same companies can choose when to draw that energy as well. Certainly some forward-looking energy companies, such as Total and NRG Energy, have jumped at the chance to expand their business and have invested in or purchased companies operating in the space. Though the dust has started to settle and the winners of the clean tech boom that ended the last decade are becoming visible, the effects of increased usage of renewable energy on a distributed scale will play out with more significant results in the years to come.
This is a guest post written by Nick Blitterswyk, founder and CEO of Urban Green Energy (UGE).
The distributed renewable energy (DRE) industry has gone through significant changes in the last five years, as the industry grew from a cottage industry to one with worldwide revenues of $100 billion and rising. The market has come back down to earth from the highs of 2005 to 2009, when investors' bets on technology companies and manufacturers went sour as supply outstripped demand. As the latter continued to grow, profitable business models and clear leaders have emerged, and along have come opportunities. Successful IPO's have countered a lackluster clean tech investment environment, showing that there is success to be had for companies with a winning formula.
SolarCity is one stellar example: they took a pretty simple piece of technology, rooftop solar panels, and became the leading solar installer in the U.S. by revolutionizing the financial vehicles that allow customers to receive a system with no money down, at less cost than their current electricity rate, and without having to go through all the paperwork necessary to monetize government incentives. Financing provided by SolarCity is much more than a revenue growth accelerator, it's at the core of the business model itself. By focusing only on states that offer adequate government incentives, a relatively small market when compared to the global potential of clean tech, SolarCity has seen its sales, and stock, succeed. Shares in SolarCity are up more than 200% since their IPO in late-2012. Delving beyond their annual revenues, SolarCity has surpassed $1 billion in solar energy systems deployed last year.
At the opposite end of the spectrum we see companies with a strong technology background that failed to figure out an adequate business model. Take Southwest Windpower, a GE-backed distributed wind turbine manufacturer, once tipped to be the next big thing in renewable energy. While their technology was second to none, their focus on wind turbine supply, rather than on solving their customers' problems, led to disappointing growth.
Another example is solar manufacturer SunTech, which recently defaulted on its debt obligations. SunTech's management focused exclusively on their product, pushing to lower costs and finding itself engaged in a battle with competitors that ultimately eroded profit margins. Throughout the renewable energy world, several manufacturers have made the mistake of waiting for customers, a fatal decision in the face of commoditization and over-supplied markets.
Companies like New York-based UGE merge technology with a customer-focused business model. In order to reach scale, UGE focuses on specific market opportunities by looking for technological challenges and high barriers to entry. A specific example are telecom towers in developing countries, where users are most in need of cheaper and more secure energy.
We oft hear of the penetration rate of cell phones in emerging markets, but what we don't hear about is the enormous challenge involved in powering the towers that support those phones in countries where the grid is unreliable and, in many places, unavailable. In many cases, these towers are powered by diesel at a very high cost. UGE has taken a leadership position in powering towers with its technology, using off-grid wind turbines and solar energy storage. Clients include Carlos Slim's America Movil; while most of these sites are in developing countries, the company also works with Verizon in the U.S. for some of its remote sites.
UGE's technology goes beyond remote telecommunication sites. The same hybrid technology platform that delivers cost savings to telecom companies is also being used by multinationals such as Hilton and BMW to lower costs and become more sustainable. Similarly, with financial firms like TD and Citibank vying for the title of "greenest" bank, wind turbines and solar energy storage systems are being used to protect bank branches against power outages with the added benefit of assisting their sustainability efforts. UGE has achieved this by matching its technology to its business model, designing products like the Sanya Skypump EV charging station jointly with GE.
Altogether, DRE can no longer be looked at as a small industry. Counting with greater energy choices is sure to create ripples that will alter the way utilities like Consolidated Edison and Duke Energy operate. With onsite energy, companies are now able to choose where their energy comes from, and by incorporating onsite storage those same companies can choose when to draw that energy as well. Certainly some forward-looking energy companies, such as Total and NRG Energy, have jumped at the chance to expand their business and have invested in or purchased companies operating in the space. Though the dust has started to settle and the winners of the clean tech boom that ended the last decade are becoming visible, the effects of increased usage of renewable energy on a distributed scale will play out with more significant results in the years to come.
Original article:
http://angelaaa0014.tumblr.com/post/52672234782/capital-crown-eco-management-renewable-energy-fraud
Related article:
http://www.forbes.com/sites/afontevecchia/2013/06/10/making-green-energy-profitable-the-boom-in-distributed-renewable-energy/
http://my.opera.com/scarlettwilliams01/blog/2013/06/11/capital-crown-eco-management-renewable-energy-fraud-watch
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