3 Clean Energy Stocks On Their Last Leg

It's never easy to see a good idea go to waste. But when you're talking about a nascent industry, that's part of the process. Good ideas thrive and lesser ideas fall by the wayside. Thus is the story of these three companies that are on the ropes right now.

A battery idea gone terribly wrong
When Ener1 (Nasdaq: HEV  ) came out of the gate, the expectations were gangbusters. Even the government got excited, giving the company a $118.5 million grant from the Department of Energy.

But technology is only important if you have customers who are willing to buy it. Ener1 saw Ford (NYSE: F  ) and GM (NYSE: GM  ) hook up with LG Chem, A123 Systems (Nasdaq: AONE  ) take Fisker and Smith Electric, leaving Ener1 to tie its boat to Th!nk's anchor. That bet blew up last week when the company said it would write off its $59.4 million investment in the company.

Now Ener1 has just $19.4 million in unrestricted cash, compared to $126.8 million at A123, and a burn rate that would make even a risk-tolerant investor woozy. Ener1 will have to pull a big rabbit out of the hat to turn this one around.

Two solar stories, same ending
Energy Conversion Devices
(Nasdaq: ENER  ) and Evergreen Solar (Nasdaq: ESLR  ) have been selling the same story for quite some time now. Both have superior solar technology in a growing industry with sales that will take off … someday -- or so they want you to believe.

But investors read through the lines at Evergreen long ago when the company decided to make a move to China. And last quarter sales fell 60.4%, operating loss was $46.2 million, and the company had just $33 million in cash on April 30th. When management says "it will need to secure additional sources of cash sooner than expected," I'm wondering who's going to provide it.

Energy Conversion Devices is another solar company with technology that had high hopes. But a story similar to Evergreen is playing out, with revenue down 70%, a loss of more than three times its market cap last quarter -- and its CEO resigned. If any of these three can survive, this might be it because Energy Conversion Devices still has $52.7 million in cash and a relatively minimal operating cash burn in the last nine months. But $228.8 million in debt hangs over the company like a tornado ready to strike -- and with pressure hitting even the best companies in the solar sector, I wouldn't take a chance on this stock.

Keep up with how these companies are doing with our free My Watchlist tool.

  • Click here to add Ener1 to My Watchlist.
  • Click here to add Evergreen Solar to My Watchlist.
  • Click here to add Energy Conversion Devices to My Watchlist.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw. The Motley Fool owns shares of Ford Motor. Motley Fool newsletter services have recommended General Motors and Ford Motor. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (7) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 18, 2011, at 4:43 PM, ecdfam wrote:

    Travis,

    Here are some corrections, additional facts, and some actually likely near-term happenings you "overlooked" regarding Energy Conversion Devices...

    1. Agreed ECD had minimal operating cash consumption last 9 months, but they actually have $172,000,000 in Cash(& equivalents) in the bank.

    2.Revenue was down 69% from previous qrt over a "TEMPORARY" moratorium on all things solar in Europe (more spec France and Italy). Have you read the preliminary decrees expecting to be finalized in a couple weeks; they push for more rooftop solar instead of ground-mounted utility-sized subsidy-hogging projects. Rooftop is ECD's niche market.

    3. ECD's debt is not anything close to a tornado as a tornado gives little notice of appearing, has a questionable path, and can't be stopped or altered by man(agement). ECD's debt only costs ECD 3%/yr and isn't due for OVER another TWO(2) YEARS.

    4. Did you read that ECD's Uni-Solar is supplying panels to the world's largest rooftop solar project. They are supplying panels for arrays on cos. the likes of Toys 'R Us, SCANA, Eurocopter, Boeing, Coca-Cola, Carlisle Energy, Republic Srvcs,...

    5. Google "Republic solar landfill".

    6. While you're at it, Google "Uni-Solar PowerShingle" expected available by this August to REVOLUTIONIZE the residential solar roofing/re-roofing market.

    7. A little research will show you ECD is in the middle stages of forming a joint venture with one of the world's LARGEST steel manufacturers in India's JSW/ISPAT Steel as well as Japan's JFE Hldgs.

    I might remind you, Ford stock could have been bought in Nov '08 for $1.00/share. Look where it trades today. Energy Conversion Devices has a much brighter picture than you give it credit. I suggest you pick up a few shares of ENER today @ $1.56.

  • Report this Comment On May 18, 2011, at 5:07 PM, earthunit wrote:

    ecdfam, you are right!

    VERY poor research done in this piece.

    Looks like a hatchet job to me.

    Full of wrong facts, half facts, one side of the story, etc.

    I'm really sick of these so called reporters.

    Karma will see its day with them.

  • Report this Comment On May 18, 2011, at 5:27 PM, ecdfan wrote:

    ecdfam is a poor liar. ENER will file for Chapter 11 by mid 2012, as it is bleeding cash like crazy and revenues will continue to drop, as evidenced by its 0.01% share in the biggest US PV market, California. ENER is not supplying anything, it is simply lying - not surprising given that the Interim President is the Facebook buddy of the ousted CEO and hails from a fraud. The so called "Republic solar landfill" has generated zero electricity in the past two months, proving that ENER's fake products belong in the dump. The so-called "JV" with JSW in India is a total scam, not unlike the 1986 ENER's Indian JV called SuryOvonics ( aka SorryOvonics) or the fake 5MW project of Unisolar's subsidiary with the Indian cult Sahara.

    Ford made real cars. ENER makes fake products. According to ENER's web site, the PowerShingle will be available by mid 2011, that's 50 days from now. But the PowerShingle is fake (it does not generate any electricity). Good luck to all the pumpers!

  • Report this Comment On May 24, 2011, at 2:04 PM, liftfish wrote:

    I trust the solar collector in firms. This is the future according to me. If we are out of the critical situation, then the shares of these companies, they will rise. They are for me ener my shares

    http://www.chartok.hu

  • Report this Comment On May 24, 2011, at 2:23 PM, buffalonate wrote:

    I wouldn't touch Ener1. LG chem's product is currently the cheapest. A123's has the most technologically advanced product and just got a patent for a better technology. I don't see any hope for Ener1. It is dead money.

  • Report this Comment On June 20, 2011, at 9:33 AM, StarlightPower wrote:

    I can't tell you anything about ENER stocks but I can tell you factually that the Uni-Solar PVL solar laminates are the best performing PV modules in the world. I have installed and tested over 30 brands of PV modules in the last ten years and Uni-Solar consistently outperforms them all. To say the products are "fake" shows that you are ignorant or lying.(May 18, 2011, at 5:27 PM) The product is available at many distributors and we stock and sell these great modules at our retail store. What's your problem?

  • Report this Comment On September 06, 2011, at 3:36 PM, ecdfan wrote:

    StarlightPower is clearly attempting to deceive. Unisolar modules regularly underperform and delaminate (some even shortcircuit and ignite). In fact, no Unisolar installation completed ten (or more) years ago is performing within specs in the field, to my knowledge. If you know of any, please let us know. StarlightPower is lying outright that he is selling Unisolar's PowerShingle (aka the "PS" series). The PowerShingle is fake and is not available from any store.

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