When the solar-panel company Solyndra went bankrupt last fall the issue quickly became political. The Obama administration had been a major investor in the company, and many Republicans wasted no time in criticizing the handling of clean-energy loans. Since then the Department of Energy has failed to make any other loans. (STAY AHEAD OF THE CURVE: Follow Kapitall on Twitter)
The New York Times reports that although $25 billion in loans were authorized five years ago by Congress to develop fuel-efficient vehicles, only $8.4 billion has been authorized. In the last two years, only one small project of $50 million has gained approval.
This isn’t good news for the green energy companies that had applications for money with the department.
“A senior adviser to Mr. Chu [United States Secretary of Energy], Richard L. Kauffman, acknowledged that some applicants had lost patience with the government’s scrutiny of their finances and business plans.”
Indeed, the Energy Department’s fear of dealing with “another Solyndra situation” has been a devastating disappointment for fuel-efficient auto developers. Many, on the realization that the money may never come, have closed up shop.
Here are some of the impacts as reported by the New York Times:
- Carbon Motors, dropped its $310 million application on Wednesday. The money would have been used to build police cars with diesel engines that use 40% less fuel than current models.
- “Fisker Automotive stopped construction in February at a Delaware plant it bought from General Motors after the Energy Department blocked the company from using a portion of its $529 million loan.”
- “Bright Automotive, a start-up in Michigan that withdrew its application last month. It is shutting down operations to produce a plug-in hybrid delivery van after energy officials suddenly demanded the company raise $345 million in private funds for a project that needed a $314 million loan.”
-”Bright has not been explicitly rejected by the D.O.E.,” the company’s management said in a Feb. 28 letter to Mr. Chu, the energy secretary. “Rather, we have been forced to say ‘uncle.”
- “Last month, Chrysler withdrew its application for $3.5 billion in loans after three years of negotiations — because the government kept raising the amount of collateral required, company officials said.”
Business Section: Investing Ideas
This is unfortunate news for the development of clean energy technology, but not all clean energy companies are falling victim to the Department of Energy.
To find names expected to buck the trend, we ran a universe of clean-energy stocks through a screen to find those with the most insider significant levels of institutional buying in the current quarter.
The “smart money” investors are bullish on these names. Do you agree with their optimism?
Use the Turbo Chart to Compare the Performance of the First Two Companies in the List to the S&P 500:
1. Ameresco, Inc. (AMRC, Earnings, Analysts, Financials): Provides energy efficiency solutions for facilities in North America. Net institutional purchases in the current quarter at 698.7K shares, which represents about 4.3% of the company’s float of 16.24M shares.
2. Ashland Inc. (ASH, Earnings, Analysts, Financials): Operates as a specialty chemicals company in the United States and internationally. Net institutional purchases in the current quarter at 3.9M shares, which represents about 5.36% of the company’s float of 72.73M shares.
3. Clean Energy Fuels Corp. (CLNE, Earnings, Analysts, Financials): Provides natural gas as an alternative fuel for vehicle fleets in the United States and Canada. Net institutional purchases in the current quarter at 1.9M shares, which represents about 3.53% of the company’s float of 53.82M shares.
4. Energy Recovery, Inc. (ERII, Earnings, Analysts, Financials): Engages in the development, manufacture, and sale of energy recovery devices and pumps primarily for use in seawater and brackish water desalination worldwide. Net institutional purchases in the current quarter at 1.5M shares, which represents about 3.4% of the company’s float of 44.16M shares.
5. Green Plains Renewable Energy, Inc. (GPRE, Earnings, Analysts, Financials): Engages in the production, marketing, and distribution of ethanol and related distillers grains in the United States. Net institutional purchases in the current quarter at 827.1K shares, which represents about 3.1% of the company’s float of 26.67M shares.
6. Power-One Inc. (PWER, Earnings, Analysts, Financials): Designs, manufactures, and markets power conversion and power management solutions for the renewable energy (RE), communications infrastructure, and other technology markets. Net institutional purchases in the current quarter at 16.9M shares, which represents about 17.11% of the company’s float of 98.80M shares.
7. Tesla Motors, Inc. (TSLA, Earnings, Analysts, Financials): Designs, develops, manufactures, and sells electric vehicles and advanced electric vehicle powertrain components. Net institutional purchases in the current quarter at 6.5M shares, which represents about 9.47% of the company’s float of 68.63M shares.
8. WCA Waste Corporation (WCAA, Earnings, Analysts, Financials): Provides non-hazardous solid waste collection, transfer, processing, and disposal services in the United States. Net institutional purchases in the current quarter at 4.3M shares, which represents about 30.74% of the company’s float of 13.99M shares.
(Written by Rebecca Lipman. Data sourced from Finviz and Fidelity.)
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Dig Deeper: Access Company Snapshots, Charts, Filings
- Ameresco, Inc. (AMRC, Chart, Download SEC Filings)
- Ashland Inc. (ASH, Chart, Download SEC Filings)
- Clean Energy Fuels Corp. (CLNE, Chart, Download SEC Filings)
- Energy Recovery, Inc. (ERII, Chart, Download SEC Filings)
- Green Plains Renewable Energy, Inc. (GPRE, Chart, Download SEC Filings)
- Power-One Inc. (PWER, Chart, Download SEC Filings)
- Tesla Motors, Inc. (TSLA, Chart, Download SEC Filings)
- WCA Waste Corporation (WCAA, Chart, Download SEC Filings)
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You didn't mention Aptera in San Diego, or Next Autoworks Company, the startup efficiency automaker backed by Kleiner Perkins VC (along with Fisker) also out of San Diego. Next withdrew their $360M application in November 2011 (as did Aptera) after years of DOE ATVM due diligence went to the endless black hole called the "final stages" before burning through nearly $100M in private investment capital. The failure of this program, to me, is a major problem because of the effects it will have on investor confidence in government innovation incentive programs in the future. With this rate of premature failure, even before being given a chance to succeed, while still meeting the stated criteria of the loan program, what investor or entrepreneur would put any confidence, and the future of their companies, jobs, and capital, in the hands of arbitrary government mismanagement and partisan chess? This was a slap in the face of Americans, while telling them you are intent on creating manufacturing jobs, increasing automotive fuel efficiency and competition, and decreasing dependence on foreign oil. Major Fail.