Investing in Solar Collectors with Savo Solar

The amount of energy contained within the sun is incredibly large. At any given time the earth receives 174 Trillion kilowatts of energy from the sun which is 6,000 times our worldwide energy usage. The below chart puts this into perspective:

Solar_Energy

There is more energy shed from the sun than any other energy source and far more than we would ever need. Traditionally we think about harvesting energy from the sun through solar cells which continue to grow more efficient and become more economically viable as each day passes. However solar cells are not the only way to harvest the energy from our star. Solar startup Brightsource uses mirrors to reflect sunlight and capture energy heating a boiler that creates steam. Then there is the concept of a solar thermal collector which in a similar fashion, uses panels to absorb the radiation of the sun to create heat. The heat can then be transferred to various mediums such as water or air. One recent IPO, Savo Solar, presents a way to invest in the world’s most efficient solar thermal collectors.

Founded in 2010, Savo Solar was created by a group of Finnish coating experts who through the use of nanotechnology, were able to create the world’s most efficient solar thermal collectors and bring them to market. The company recently had an IPO on the Swedish OMX NASDAQ market trading under the symbol SAVOS giving the Company a current market cap of just under $80 million USD. Revenues for 2014 came in at $1.09 million USD, nearly double that of the previous year. Losses were significantly larger at $2.2 million USD.

Savo Solar builds and sells solar thermal systems for the heating of buildings, industrial processes, and domestic hot water. The Company’s primary focus is on large scale industrial applications and they claim to have sold their products to over 17 countries on 4 continents.  Their largest thermal collector is over 16 square yards in size and the largest collector on the market. The smaller 2 square yard collector is the most efficient in the world (according to third party tests) and can utilize up to 90% of the radiated solar energy. The company has filed patents for both the production and composition of their solar thermal collectors which have a lifespan of 25-30 years. The market for solar thermal collectors is quite big as stated by Savo Solar:

Solar thermal solutions is the global leader in nontraditional renewable energy by installed capacity of 330 GW. That is more than twice as much compared to total installed electrical capacity of solar cell panels (photovoltaic). In energy generated it is second only to wind power and is considered to have the highest potential of renewable energy sources in the future. Solar thermal is already in many places competitive compared to conventional heat production.

Savo-Solar’s main competitors are those who deliver large systems and have their own large area collector production. There are fewer than five such competitors globally. Savo Solar plans to target the district heating market, specifically in Denmark and Germany, but also France, Italy, Austria, and Finland. Additional segments they will focus on include industrial systems for process heating and energy renovations of old multi-story buildings.

The market seems to be large with few competitors so we’d expect to see continued strong revenue growth for Savo Solar as a validation that the market is willing to adopt their technology.

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