SES Solar (OTC: SESI) is a small Swiss outfit that specializes in making rooftop arrays and photovoltaic panels which are larger than the standard 3-by-3. Another specialty of theirs is a refinement of the connectors used to hook multiple panels together so that less energy is lost as it is transferred through the panels to its collection point.
But the company’s share price hasn’t reflected the value of that innovation because it’s a small operation that hasn’t garnered much attention. There’s only one analyst currently covering the stock and they’re not doing a great job of getting the company’s name out there. But that’s likely to change in the next several months.
For starters, roof top solar arrays for businesses and private homes are beginning to gain more media attention as the public becomes more aware of the real scope of the global warming crisis. Those arrays also have the added benefit of actually paying for themselves through reciprocal agreements with utility companies.
That works because most structures with roof top arrays are still connected into the power grid since solar energy can still be a bit unreliable. No business wants the lights to go out on a cloudy day and John Q. Public doesn’t want to forego watching the big game just because it comes on after dark.
So, the power collected through the array is stored in batteries and when the batteries run out, the system switches over to drawing juice from the local power company. The kicker there is that electricity essentially flows both ways through the power lines, so if there’s a long string of sunny days and you don’t use all the power your array collects, that power is automatically sold to the utility companies through local reciprocal agreements. So if you sell more juice to the electric company than you use, they send you a check.
It’s that process that’s garnered mainstream media attention from the local TV station to NPR’s All Things Considered. That’s a pretty strong endorsement.
The big reason this company has dropped off a lot of radars is that it’s shifted its focus away from actually selling its products, and while that’s counterintuitive for any business, they’ve got a pretty good reason for doing it.
Being such a small company, they haven’t had the resources or the cash to build their own manufacturing facilities, so they’ve been relying on third parties to actually make the arrays they’re selling. But they’ve put the money together to build their own factory (which is well underway) and machinery (soon to be delivered) by lowering the costs associated with having a sales staff and through a loan by the Swiss government.
At this point, they anticipate construction on the factory being completed by the end of the year and ramping up production through the first quarter of next year. Once sales pick back up and they’re realized the cost efficiencies of manufacturing their own product, share prices should pop as they achieve greater market penetration.
This is a very speculative play since there could still be some hitches with finishing construction and taking delivery of their new machines, but with shares currently trading around a dollar there’s definitely much more upside than downside.
$1.01 (11/13/07)
