When businesses, governments, and homes decide to go with a greener source for its energy, whatever the reasons, it requires a number of technical components. Solar, in particular, is becoming increasingly popular as it can be installed on virtually any building. To get the economic benefits of hooking up to a solar panel requires electricity to either be sold back to the grid, or stored for use at peak demand. To do this a power management and control system is required and this is exactly what Canada’s Eguana Technologies Inc. (TSXV: EGT) does.
This is exactly what Canada’s Eguana Technologies Inc. (TSXV: EGT) does. Eguana’s products, including its Bi-Direct power control and conversion system, takes the electricity created from solar, which is direct current, and converts it into alternating current so that it can be used on household items. The Bi-Direx can also manage where the energy is sent to,either back to the grid, a storage battery or to power that Wi-Fi router. Eguana Technologies has a 3-year contract with E-gear LLC, a provider of solar technologies in Hawaii to supply it with Eguana’s Bi-Direct power control and conversion systems, and Germany’s leading solar solution provider has recognized them as the ideal power control provider for their systems.
Hawaii’s energy situation requires all fossil fuels and fuel for power generation to be imported via ships over a large distance. This has created a high-priced market place for fuels and electricity in that State.Currently, solar has reach parody in pricing and Eguana is set to capitalize on this. However, experts are predicting that Hawaii’s energy market now could reflect what prices will be on the mainland a few years down the road. This is because solar will continue to drop in price, meaning it will reach parody to mainland electricity prices.
The reason that solar and other renewable energy sources continue to drop in price is that they are fundamentally different from other sources of power that rely on a commodity to generate the electricity. Solar and renewables are technologies.This means that as more is produced and the technologies improve, the cost to produce it decreases.
The best analogy would be computers CPUs, and the micro processing chips. The computer in your smart phone is more powerful, faster and a fraction of the size and cost of a super computer from the 80s. Commodities such as oil, gas, uranium, and coal cannot ever be improved, what is in the ground is all there is. Technology cannot improve the commodity, but it can improve the technologies that extract process and combust them, but the commodity itself is finite.
Solar, wind, geothermal and hydro generation are technologies, the first two have had significant improvements in efficiency over the past decade and continue to improve year over year, and this will only continue as the history of computers proves. This means that as energy commodities deplete, their prices will rise, while renewable technologies will become increasingly less expensive and will reach a point in the near future where they make more economic sense than commodity-based energy.
Back to Hawaii, where commodity prices are already high, and solar has reach the parody price, solar installation has taken off. Currently 12% of households have some sort of solar array. Driving this renewable adoption even further is the Hawaiian government’s new plan to generate all electricity by renewable sources by 2045.
Currently there are some issues with solar and the current grid system, and utilities do not want to invest in the infrastructure to allow homeowners to sell back to the grid during peak hours. Tesla’s Powerwall and other battery storage technologies are set to provide the answer by allowing home owners to store the energy for when they need it, removing the need to sell energy produced during the day to utilities and avoiding the infrastructure.
Interestingly, Tesla’s Powerwall does not come with an inverter, or power management system, which makes Eguana’s products the perfect match, and Tesla’s battery has newcompetition.On May 29, 2015, Eguana announced a partnership with Asteelflash Group, a manufacturer of electronic equipment, for them to manufacture the Bi-direx power control and conversion system and AC batteries. “The partnership with Asteelflash will deliver lower manufactured costs of Bi-Direx systems in Germany, and will position us in California to begin shipping ‘made in California’ AC Batteries that will enable energy storage system aggregators to access higher incentives for domestically manufactured products,” commented Justin Holland, COO of Eguana.
Eguana is not only targeting the North American trend setting state of Hawaii, but it has had success in the world’s most advanced solar market: Germany. The Germany battery maker Sonnenbatterie and Eguana have designed their products to work synergistically, which has given Eguana’s technologies recognition as a high-quality supplier of energy storage management systems and creates a strategic partnership with Germany’s #1 solar energy storage solution company.
Eguana’sQ1 resulted in product sales revenue of $1.5million, which was less than the company was expecting due to supply chain disruptions. Its Q1 revenue, though, is 68% of the total sales revenue for the entire fiscal year 2014, putting Eguana on track to continue to grow its top lines. The revenue growth seen in Q1 was before Tesla’s announcement, so it will be interesting to see how Q2 plays out for them now that battery storage has become more mainstream thanks to Tesla. Currently, Eguana has a market cap of $24.78million.
