Sustainable Energy & Industrial Technology Primer

We have created our third annual comprehensive primer on the Sustainable Energy & Industrial Technology sector to assist investors in navigating its complex and varied sub-verticals. Given the improving unsubsidized economics, stronger demand, and less reliance on government intervention, we remain bullish about long-term prospects. Our top ideas are AYI, ITRI, HASI, FSLR, XYL, ORA, and TPIC.


 Deep Dive Into the Sustainable Energy & Industrial Technology Sector

We have compiled a 378-page primer on the sector. After years of underperformance vs. the broader indices, we see the group set for outperformance in the years ahead as growth is no longer predicated on subsidies and government policy. New solutions are becoming more mainstream as renewable investment added 10.6GW, 14.6GW, and 9.8GW for 2015, 2016, and 2017, respectively. We see the group set to break out as costs continue to fall and the sector becomes more mainstream and no longer a form of “alternative” energy, but the “primary” energy source. Global utilities are deploying wind and solar due to economic drivers rather than subsidies that were needed in the past. We are most excited about multi-year investment prospects in the smart grid, wind, and lighting markets. We see solar building off of its tepid recovery in 2017. The third edition of our primer includes expanded smart grid and energy storage sections as well as a complete update of our existing sections. We have updated our views on the solar sector with a more cautious stance in the near- to mid-term, but continue to see First Solar as the long-term relative winner in the sector.

Smart Grid Needed for Distributed Power; Grid/City/Building Leveraging IoT

Over the next ten years, we see the electric grid becoming more connected by still using centralized generation sources, but incorporating an increasing level of distributed generation. This will require a “smarter grid” in order to efficiently manage the combined system. A smart grid will allow utilities to have a real time view of supply and demand across a network. Not only will this interconnected network leverage utility intelligence, but we see cities participating in network transformation as they look to implement energy efficiency and increase security. We are at the beginning of a multi-decade cycle of smart buildings, leveraging the integration of smart lighting, fire, security, and HVAC to drive energy savings and operational improvements.

Utilities to Embrace Renewables as Energy Generation Becomes Competitive

As the transition to a lower carbon economy proceeds and the shift in mentality from renewables being something utilities were “forced to do” due to regulation to renewable power being the most cost effective source of generation, we see a potential tipping point for the industry. Regulatory support of renewables is no longer the only force driving clean power generation, and, with a smarter grid, utilities will be up to the challenge of managing the increased complexity of intermittent power. In our view, utilities remain committed to deploying “clean power” despite Trump’s opposition.

For more information, contact your Cowen sales representative.

 

Get the Full Report

If you’re already a member of our Research portal, log in.

Log In

If not, reach out to us directly for more information.

More Like This

Concept around the premise that robotics is a key tool for combating climate change, fostering sustainable industry, and supporting ESG. The image is of two assembly robots making a digital rendering of a tree, effectively growing and nurturing the tree. Neon blue lighting against a black background with a city-scape visible in the background.
Ahead of the Curve®

Deus Ex Machina Part IV, Robotics as Tools in Climate Fight

Read More
Podcast
Concept for reservoir analysis used to evaluate CO2 storage. Related to sustainability, clean energy, and big data. The image is of a light bulb growing in soil with data circuits circulating around the lightbulb as if reflected by yellow light of the bulb.

Carbon Storage Evaluation with Core Lab

Read More
Podcast
Concept for luxury and sustainable linens, home decor and furniture. Representing Cowen's collaboration with Parachute Home on a podcast.

Parachute Brings Premium & Accessible Comfort Home

Read More