2013 is shaping up to be a tipping point for Greentech investments.
We previously predicted that the second half of 2013 would see a rush of Greentech IPOs come to market. Buoyed by an improving world economy and positive sentiment around the Greentech sector in particular. We have not seen anything in the first week of the year to make us doubt this prediction. The only factor that may require revision is the timing. Going by the current positive sentiment in the market it is possible that there may be some significant IPO activity around the middle of the year.
The extension of the wind energy tax credits as part of the fiscal cliff deal last week ensured that construction of wind plants across the US can continue. The American Wind Energy Association claims that move will save 37,000 jobs.
MidAmerican Energy is expected to make further additions to it’s renewable energy portfolio in 2013. The Berkshire Hathaway subsidiary has already acquired the 579 MW SunPower Corp for $2.0m – $2.5m and we expect further acquisitions during the year.
1) An improving global economic climate in 2013 will see a rush of Greentech IPOs in the second half of the year.
2) New entrants to the market and a return of the WTI crude oil price to over $100 a barrel will see increased interest in hybrid cars.
3) Further technological developments in photovoltaic cells will see the cost of electricity from solar continue to fall. However parity with electricity from fossil fuels will not be achieved in 2013.
4) Governments seeking to boost economic productivity will approve additional large scale wind farms as part of their strategy for meeting global carbon emissions targets.
5) International airlines will continue to develop aviation bio fuels for commercial use. By the end of the year some airlines will be using a mixture of biofuel and traditional in scheduled flights.
SolarCity Corp (SCTY) shares jumped 47% in two days following it’s 12 December IPO which raised $92m. The offer price valued the company at $585m.
SolarCity installs solar systems on customers rooftops and sells them the electricity at a price 10%-15% lower than from a utility company. SolarCity says it has provided systems for more than 45,000 buildings in 14 states.
The California based company headed by Elon Musk had originally hoped to raise $151m in the IPO. However pressure from investors led to a lower offer price of $8 from an original range of $13 – $15. The number of shares offered increased from 10.1m to 11.5m representing 16% of the company.