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3 Renewable Energy Stocks with Tremendous Growth Potential!

03 Mar 3 Renewable Energy Stocks with Tremendous Growth Potential!

Renewable Energy is derived from naturally replenishing sources such as Hydropower, Geothermal, Solar and Wind Energy. According to the U.S Energy Information Administration, In the year 2019, renewable energy provided 11.5 quadrillion British thermal units (Btu) or 11.4% of total U.S. energy consumption, out of which, 56% was contributed by the electric power sector and 17 percent was from renewable energy sources.

The greatest advantage of renewable energy is their ability to reduce greenhouse gas emissions, by lowering fossil fuel consumption, the largest cause of carbon dioxide emissions. The renewable energy sector has now come under a sharp focus owing to Joe Biden’s administration’s plan to fight climate change with greater emphasis on clean energy and a mission to reach net-zero emissions by 2050.

The government’s position on clean energy was made clear by its recommitting to the Paris Climate accord and its call for moving to clean energy by 2035. The new administration will invest close to $1.7 trillion over the next 10 years in its bid for a “Clean Energy revolution” that aims to establish the US as the clean energy superpower and transform the energy sector by providing economic impetus.

We take a look at three players in the renewable energy sector that aim to capitalize on the favorable environment.

Sunworks Inc (NASDAQ: SUNW)

Market Cap: $332.98M; Current Share Price: 13.97 USDChart
Data by YCharts

The Company provides comprehensive and high-performance solar power systems and solutions that cater to Residential, Agricultural, and Commercial Solar Integrator requirements. Sunworks offers customers first-hand experience of how solar solutions work through its Sunworks Solar Design Center, where customers can avail custom solar solutions and choose from the latest renewable products in the industry. The Center also provides financing options to make the choice to switch easier.

Image Source: Company

The Company is also an authorized dealer of SunPower, solar power storage battery solutions, that enables customers to store extra energy instead of feeding it back to the electricity grid. Sunworks also provides residential vehicle charging systems, through its partnership with SolarEdge (NASDAQ: SEDG), which allows customers to charge their electric vehicles at the convenience of their home and take advantage of favorable residential electricity rates.

Sunworks also provides Engineering, Procurement and Construction (EPC) solutions encompassing permitting, design, procurement, construction, operation and maintenance (O&M) and has delivered over 500 agricultural, commercial and industrial installations.

The Company recently announced its Q4,2020 financial results and reported $8.5 million in revenues, gross margin of 16% and 17% and net loss of approximately $5.0 million for Q4,2020, while it expects the year-end revenue to be in the range of $38 million, gross margin to be 13.5% and 14.5%, and net loss to be $16 million. Sunworks believes it has a strong cash balance of $39.4 million and backlog of $42.6 million, which are sufficient to fund its near-term and long-term growth initiatives and strategic plans.

ReneSola Ltd (NYSE: SOL)

Market Cap: $1.02B; Current Share Price: 14.60 USDChart
Data by YCharts

ReneSola is a leading developer and operator of solar projects, with presence in more than 10 countries. The Company is focused on pursuing high-margin project development opportunities in high growth markets such as the U.S and Europe including leadership positions in Poland, Hungary, Minnesota and New York. The Company which was originally founded in 2005, became a pure downstream player through a business restructuring in 2017.

The Company operates in three business verticals, the first being Project Development consisting of a Build Transfer projects that are delivered after being connected to the grid and Project rights sale that are sold at “Notice to Proceed”. The Company acts as an Independent Power Producer, owing and operating solar power projects and selling electricity and operating DG projects in developed regions. Renesola also provides professional services such as design, procurement, construction and management of Solar modules and plants.

Image Source: Company

As of June, Q3,2020, the Company has built 800 MW of solar power projects and is operating 189 MW solar power projects globally. In addition, its developmental pipeline has 732 MW in late- stage and has a planned commercial operation date in 2020 to 2022.

The Company is developing community solar projects in the states of New York, Maine, Utah and Utah to name a few. Renesola is also working on large-scale solar and BESS projects to meet the supply needs of utilities, commercial and industry consumers in the U.S. The focus is on expanding the pipeline through early-stage acquisitions, co-development and self-originated greenfield projects and targeting an ideal mix of corporate, municipal and utility off-takers.

The Company is expecting revenues in the range of $23 to $25 million for Q4,2020 and $80 to $90 million for full-year 2020, while the gross margins are likely to be in the range of 11%-13% and 18% to 20% respectively. The Company had recently made a $5.0 Million Registered Direct Offering, the proceeds from which are intended to be used for expanding its solar project pipeline.

Renesola has formed a joint venture with Vodasun to develop Ground-mounted projects in Germany, with an initial project portfolio of 50 to 100 MW, and additional 50 to 100 MW of new projects per year. The Company has also formed a joint venture with Novergy to develop Utility-scale Projects in the U.K, with a current pipeline of 100 MW and additional 100 MW in the next couple of years.

Gevo Inc (NASDAQ: GEVO)

Market Cap: $1.43B; Current Share Price: 9.26 USDChart
Data by YCharts

The Company produces Energy-dense liquid hydrocarbons using sustainably raised corn that measure up to the standards of the Argonne GREET model, a key measure to gauge sustainability of the fuel. The Company is leveraging its innovative thinking to store renewable energy in the form of energy-dense liquid hydrocarbons that can easily combine with or replace fossil-based fuels.

Gevo’s gasoline and aviation fuel uses renewable agricultural feedstock, electricity derived from wind turbines and energy from Biogas obtained from a wastewater treatment plant, that eventually produce “net-zero” greenhouse gas footprint through their entire lifecycle. In addition to renewable fuels, the Company’s technology also helps plastics to be made with more sustainable ingredients. Gevo’s patented technology allows it to produce competitive low carbon products such as jet fuel, diesel, and gasoline components.

Image Source: Company

The Company’s product offerings include Renewable Gasoline, Diesel, Isooctane, Isobutanol, Isobutylene and Sustainable Aviation Fuel that caters to the needs of varied industries such as marine, airlines, private aviation, clean cities and specialty vehicles. Gevo has an extensive portfolio of 595 patents and applications including cross-licensed Butamax patents and applications. The Company also sells its patented yeast and other technologies to licensees.

Gevo caters to high-quality blue-chip customers such as Delta (NYSE: DAL), Haltermann Carless, SAS, Lufthansa (OTCQX: DLAKY), Virgin Australia and Trafigura. The Company believes it has the potential to address the needs of a total addressable market of over 888 Billion gallons per year (2030E Global Liquid Fuels Demand) and currently has over 1.5 billion in take-or-pay contracts in place. The contracts are usually long-term, having a 6–7-year term, and have a fixed price component to bring uniformity in overall pricing structure.

The Company had nearly $535 Million in cash balance as of 22 January 2021, which it believes is sufficient to fund the development costs and equity of Project Net-Zero 1, renewable natural gas and international licensing, while funding Net-Zero 2 and 3 and taking care of partial equity investments in Net-Zero 2 and or Net-Zero 3.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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References

https://www.eia.gov/energyexplained/renewable-sources/

https://www.nsenergybusiness.com/features/joe-biden-climate-plan-energy/

https://finance.yahoo.com/news/sunworks-announces-preliminary-fourth-quarter-210500744.html

https://finance.yahoo.com/news/sunworks-announces-preliminary-fourth-quarter-210500744.html

https://ir.renesolapower.com/static-files/24d6e9c4-377c-46a8-bc6b-d7194eb654ad

https://www.tpicomposites.com/about/company-overview/

https://investors.gevo.com/_resources/presentations/corporate-presentation.pdf?v=0.431

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