Premier Power Goes Public (OTCBB:PPRW) - Leading, and Profitable Downstream Solar Integrator

Sep 15, 2008
Author: SCP Editor

September 15, 2008 – Premier Power Renewable Energy (OTCBB:PPRW) announced it has come public through a reverse merger this weekend, on the heels of a $7 million financing led by Vision Capital.  Premier is a leading downstream solar firm which has demonstrated success in the burgeoning solar markets both domestic and overseas. In an environment where so many of its peers have struggled to achieve profitability, Premier has. It is amongst the largest and fastest growing solar installers in the nation, achieving sales of $16.7 million in 2007 and has contracted $48 million in sales for 2008, representing 187% year-over-year growth.  It has been profitable since 2006, and continues to experience dramatic growth and record sales in the US and Europe.

Premier has been installing PV systems since 2000, and is one of the top seven installers in the country, focused on the $13 billion commercial market – GE’s number one installer. Customers include PG&E, Sierra Pacific Power Company, AT&T, KB Homes, Shafer Vineyards, Silverado Vinyards and Chateau Montelena. Partners include SunPower (Nasdaq:SPWR), Sharp, Fronius, and as mentioned, GE.

As we noted above, sales growth has been strong. Three years ago, total sales were about $2.5 million, and this year, management has contracted $48 million. We have been admittedly bearish on other downstream installers, such as Akeena (Nasdaq:AKNS), which is has generated about $37 million in the last 12 months, but continues to lose money. Despite that, the markets have supported a $100 to $120 million market cap for its stock. Meanwhile, Premier is generating about the same amount of revenue, is profitable and has recently raised money close to a $50-$55 million market cap. So we think there distinct upside in the stock.  

Factors driving commercial solar adoption include:  

·         Volatile global energy prices and rising global energy demand

·         Incentives; feed-in tariffs, net metering, rebate programs geared towards making solar more financially viable

·         Power purchase agreements

·         Solar approaches the cost convergence zone; large scale utility projects moving closer to economic viability (without rebates) 

·         Geo-political climate: Kyoto Protocol, emission goals, cap-and-trade policies and green house gas initiatives driving global adoption trends 

·         U.S. Federal Government activity; Key incentive programs serve as short/medium term stimulus

·         Individual State initiatives such as the California Solar Initiative

·         New, more cost effective and efficient solar module manufacturing technologies are emerging that make solar more economically viable

Important Disclosure: SCPEditor is LONG PPRW. SCPEditor is a principal of Aspire Clean Tech Communications, Inc. which has been engaged by Premier to provide strategic communications services, and is paid $7,500 per month, and subject to fulfilling a year-long contract will receive up to 30,000 shares of stock. The information and trades provided here and in the comments are for informational purposes only and are not a solicitation to buy or sell any of these securities. Investing involves substantial risk and you should evaluate your own risk levels before you make any investment. Past results are not an indication of future performance.