“The Biggest Solar Energy Project Ever”

By Travis Johnson, Stock Gumshoe, September 23, 2007

Well here we are, just a day or two after checking out Robert Hsu’s latest solar teaser and we’ve got another one for solar. No surprise, I suppose, when oil seems permanently stuck over $80 a barrel it’s certainly true that solar and all other alternative energy plays are getting even more attention than they had previously enjoyed.

But anyway, this one is from Jeff Siegel for Agora’s Green Chip Stocks, and it’s got a very scientific sounding opening:

“Using a source officially discovered by NASA in 1978, a small California company has perfected a way to harness the ‘Earth’s Energy Budget,’ which NASA has measured at 174 Petawatts per day.”

That “Earth’s Energy Budget” business, as you may not know, is just the sum total of all the solar radiation that enters the earth’s atmosphere. And much of that 174 Petawatts does indeed hit the surface of the planet, though harnessing even a measurable percentage of that is of course an entirely different story.

Jeff notes that 1 Petawatt is enough to run New York City for more than 10 years, just to give you some idea of the scale.

But back to our clues — we’re looking for “Endless Energy: The tiny stock that’ll bring it to every home.”

This company sells what they call “Building Integrated Photovoltaics (BIPVs)”, which in essence are photovoltaic cells that, instead of being built into big frames and covered with glass, like traditional solar panels, are integrated into building products. So they sell membrane roofs that have solar panels built in, flush with the surface, and roofing tiles that are each little individual solar panels that I suppose must be wired together into some kind of system.

And that may indeed be enough to solve our teaser — there aren’t a lot of companies doing that. But let’s look at a couple other clues:

They have a market cap of about $55 million, and a share price of about 45 cents. He also talks about oil trading at $73 a barrel, so we know the ad is a little bit long in the tooth.

He compares this company to other firms that have had “disruptive” new technology in the solar energy arena, like First Solar.

And he talks about other things that will push the share price higher — an extension (he mentions eight years, which is what the solar industry has been pushing for a couple years) of the tax credits for solar installations, and the higher fossil fuel prices that should hit home over the next cold winter. The tax credits, as far as the latest info I read, currently expire at the end of 2008.

So what company are we talking about here?

The Gumshoe provides, of course: This little firm is …

Open Energy Corporation (OEGY, traded over the counter)

The shares have climbed a bit since this teaser was first written apparently — they’ll now cost you fifty cents a pop, and the market cap has climbed to $60 million from $55.

Which is, of course, immaterial if the company is really going to “profit more than almost any other solar manufacturer on the planet,” as Jeff tells us.

Right now, they’ve got a lot more debt than cash, they’re trading for about 12 or 13 times book value and annual sales. They’re very unprofitable and I don’t know what it will take to make them profitable, or even to bring in positive cash flow, but their sales have jumped about 200% year over year … so that’s something.

The company really does build BIPVs, and they do