Energy-Efficiency Companies Set to Go Public

By Published On: February 23, 2007

Two demand-response companies filed for initial public offerings this month, reflecting their growth and that of the energy-efficiency industry. Demand-response aggregator EnerNOC filed to raise $100 million in investment on the NASDAQ February 12 (Circuit, Nov. 17, 2006). A second company in the efficiency business is also ready to go public. “The economics of efficiency will surprise investors,” said Michael Horwitz, Pacific Growth Equities senior research analyst. He added that the new publicly traded energy-efficiency companies will change clean-energy companies’ financials. “Now the indexes are heavily weighted towards solar and biofuels. Indexes will change to a more portfolio” approach with these added companies, he explained. In other alternative energy news announced at a Cleantech conference this week in San Francisco, Seattle-based biodiesel company Imperium Renewables reportedly closed $113 million in equity financing and a $101 million line of credit – a big investment in the upstart industry. The cleaner-energy juggernaut is compared by observers to the boom in Internet companies a decade ago. However, there are significant differences, stressed panelists. While Internet companies didn’t need much capital, “Clean tech is capital intensive,” noted Russ Landon, Canaccord Adams managing director. The banker added that it’s possible for alternative-energy companies to garner the profits demanded by venture capitalists who are used to a 40-50 percent return on investments. However, Landon and other bankers did not seem quite so sanguine about the industry’s profitability compared to the Internet bubble.

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