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John Petersen submits:I’m a Mac user and have been for over 19 years. More accurately, I’m a serial early adopter of new technology. I bought Sharp’s first portable calculator in 1971; bought word processing, laser printing, videotape, compact disks and satellite TV in the early ‘80s; bought a cell phone and established an Internet domain in the early ‘90s; and had established a paperless office and a global practice by the late ‘90s. If it was new and cutting edge, I had to have it first regardless of the cost. So far, the only technical temptations I’ve been able to resist are an iPhone, because I don’t want that much connectivity, and an EV, because I don’t believe the available products are good enough. But I can pretty much guarantee that I’ll have an EV within a couple years, or as soon as somebody comes up with a reasonable solution that fits my relatively modest transportation needs. I am not what most people would classify as a regular guy. But I have to admit that my perverse insistence on being an early adopter of the latest and best in cutting edge technology has more often than not led to product purchases and investment choices that ranged from disastrous to merely suboptimal. Complete Story »
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John Petersen submits:Since mid-July I’ve been an outspoken advocate for advanced lead-acid battery technology and a fairly vocal critic of lithium-ion technology, which I’ve uncharitably compared to airbrushed centerfolds. Understandably, defenders of the true faith have condemned my heresy. Today I’m going to back up a few steps and try to give new readers a better understanding of where the battery industry has been, where it is now and where I believe it is going in the future. I hope this overview of how the industry has developed will make my reasoning more clear and improve everyone else’s understanding of a complex but very exciting investment sector. A Brief History Complete Story »
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John Petersen submits:Since July I’ve been writing a series of Seeking Alpha articles on the energy storage sector because I believe it is poorly understood but likely to be the next major investment trend. From August 15th through October 31st, the Dow fell by 19.9% but the energy storage stocks I’ve been following tanked by an average of 38.8%, which gives me a dismal track record as a short-term stock market prognosticator. The following table summarizes the gory details. (Click to enlarge) Complete Story »
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John Petersen submits:Everybody hates recessions because they make us reflect on our excesses, adjust our expectations and get back to basics like saving money, carefully analyzing purchase decisions, making loans to people who can repay them and investing in companies that make essential products. The adjustments are invariably painful, but markets, companies and individuals are far more rational after a recession than they were beforehand. Ultimately recessions help clarify the difference between what we want and what we need. Complete Story »
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John Petersen submits:It looks like my September 22nd article Energy Storage Opportunities After the Market Carnage was a little bit premature. But before getting into the details of how the energy storage sector is faring on October 12, 2008, I need to apologize to ZBB Energy Corp. (ZBB) because I incorrectly reported that they were late in their SEC filings in my September 1st article Opportunities in Energy Storage Stocks. My mistake was simple. I missed the fact that ZBB has a June 30 a fiscal year and its next report wasn’t due until the end of September. The company filed its annual report with the SEC a few days later and appears to be in solid financial condition with 18 months of operating cash. I am sorry for the mistake. ZBB is a transition stage manufacturer of zinc bromine flow batteries and the clear leader in the “hours of discharge time” product class. Their pre-production prototypes are priced in the $600 per kWh range and will compete primarily with pumped hydro and compressed air storage. There is no question that pumped hydro and compressed air will be the technologies of choice for utility-scale diurnal storage installations. But when it comes to small-scale storage for homes, businesses and remote villages, flow batteries like ZBB’s are likely to be the best choice. Given its financial strength, cost advantages to users, tax credit eligibility in solar installations and strong position in a critical energy storage niche, I think ZBB has solid upside potential. Complete Story »
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John Petersen submits:Last Friday's extension and expansion of tax credits for solar energy property will for the first time provide substantial tax incentives for the use of storage devices and power conditioning equipment in connection with residential photovoltaic solar systems. While these ancillary systems have always been included in the regulatory definition of qualified electric generation equipment, the old cap of $6,667 on eligible investments was typically exhausted by solar panel purchases, which left no real incentive for ancillary systems. With last Friday's elimination of the cap on qualified solar energy investments, the entire system, including solar panels, storage devices and power conditioning systems, will now be eligible for the 30% Federal tax credit. This is a major change. I am loath to venture a guess as to the amount of additional revenue that manufacturers of energy storage products will book as a result of this simple change in the tax code. But I am more confident than ever that the first big beneficiaries of future decisions to include storage capacity in residential solar systems will be established lead-acid battery manufacturers like Exide Technologies (XIDE) and Enersys (ENS), emerging advanced lead-acid battery manufacturers like Axion Power International (AXPW.OB) and emerging flow battery manufacturers like ZBB Energy (ZBB). Complete Story »
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John Petersen submits:I had a bit of an epiphany over the weekend because of two unrelated events. First my younger brother announced that he was installing 5.2 kW of solar panels on his house in Arizona. After that a potential client from Dallas described his new line of low-cost high-performance insulation products as "regular guy stuff." In combination, these events clarified and crystallized my thoughts on a fundamental theme that investors may want to use as a touchstone when analyzing alternative energy investments: the difference between regular guy stuff that can solve energy storage problems today and science fair projects that may be economic someday. For several weeks I've been trying to think of a way to work an excerpt from Merle Haggard's 1981 classic Rainbow Stew into a Seeking Alpha article. The song is all about a regular guy's somewhat jaded view of science fair projects, government promises and the human condition in general. But it speaks the truth in a way that only country music can: Complete Story »
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John Petersen submits:Last week was one for the record books and reminds me of the old adage that while history never repeats itself, it frequently rhymes. As I watched the carnage unfold, I couldn’t help but think back to October 1987 when I cleared SEC comments on a client’s registration statement during the week before Black Monday. As a direct result of that market break, the client’s planned IPO didn’t get off, the client and its underwriter both went broke and I didn’t get paid. So it was an expensive education that’s paid for itself many times over during my career.
The market is always fickle, often brutal and occasionally downright vicious. But it’s periods of maximum market ugliness that give rise to the greatest opportunities for astute investors. I think it was Rothschild who first said that the time to buy was when there was blood running in the streets. Today, Buffett follows that same time-proven philosophy and gets spectacular results. But he also looks beyond the surface of current events to get to fundamental causes and conditions and then invests based on the fundamental trends. Complete Story »
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John Petersen submits:Last week, Mark Solheim of Kiplinger’s Personal Finance Magazine,posted an article on Seeking Alpha that really helped clarify the economic issues I’ve been writing about for several weeks. His article, backed up by the analytical strengths of the Kiplinger organization, noted that most HEVs offer limited economic benefit to their owners. My reaction was the predictable question: If HEVs offer marginal economics with NiMH batteries, how can they possibly pay with Li-ion batteries that cost significantly more per watt hour of energy storage?
Complete Story »
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John Petersen submits:For the last few weeks, I’ve been writing a weekly article on energy storage, a long-neglected industrial sector that most consider boring but I believe will be the next major investment trend. While I’m bullish over the prospects for almost all of the storage companies I know about, I will always pick the “best affordable technology” over the “best available technology” because that’s exactly what consumers will do when they make buying decisions. My fundamental premise is that every energy storage decision will ultimately boil down to a cost-benefit analysis where (a) the cost of the original energy inputs plus (b) the fully loaded cost of storing the energy must be less than (c) the value of the energy delivered to an application. As long as the basic equation balances, energy storage is a rational decision that’s required the laws of economics. But if the equation doesn’t balance we leave the day-to-day world of paychecks, budgets and monthly bills and enter a fantasy world where performance trumps cost. Complete Story »
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John Petersen submits:Groucho Marx once quipped: "If we had some eggs we could have eggs and ham, if we had some ham." In 2008, Groucho would probably work in the PR department of an alternative energy company where the logic often follows a similar path and the hype over advanced research projects, prototypes and vaporware can be intense. Complete Story »
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John Petersen submits:I’m convinced that energy storage is going to be the next major investment trend and I have a very bullish outlook for the entire sector. My rationale is simple. As industrialized nations switch from fossil fuels to inherently variable alternative sources like wind and solar power, robust dispatchable energy storage will become essential to insure that electricity continues to flow at the flip of a switch. The only other options are more coal fired power plants or an unstable grid that suffers from increasingly severe disruptions when variable power supplies fail to mesh with variable power demands. When I began studying the storage sector almost five years ago, I was amazed at the complexity and scope of the problem. While my simple mind was looking for a silver bullet solution, I quickly learned that there is no single technology that can solve all energy storage problems. Instead, there are a multitude of technologies that can each solve part of the problem. That’s why professionals believe a comprehensive solution will require a multi-pronged approach and something north of a trillion dollars in energy storage investment. Complete Story »
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John Petersen submits:Last week I published a brief article on Seeking Alpha that drew surprisingly emotional responses from stockholders of Ener1 (HEV) and Altair International (ALTI). Since the article was my first foray outside the friendly confines of SEC reporting and my own website, I was more than a bit shocked. You'd think I'd shot somebody's dog! For the record, I'm extremely bullish on the entire energy storage sector because I believe our biggest near-term gains in the battle for energy independence will come from more efficient use of available resources. I also draw substantial comfort from the conclusions of firms like Merriman Curhan Ford and Lux Research who foresee 200% to 300% growth in the storage sector over the next 10 years. Over the long-term, I believe emerging power technologies will radically change the way we produce energy and emerging efficiency technologies will radically change the way we use energy. The transition will be painful, but ripe with opportunity for astute investors. Complete Story »
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