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ARISE im WallStreetJournal
Arise Tech Hoping For Surge In Demand For Solar Power
TORONTO (Dow Jones)--Arise Technologies Corp. (APV.T), a Waterloo, Ont. solar-technology company, is hoping that new legislation designed to stimulate renewable power production in Ontario will result in increased demand.
Ontario passed the new Green Energy Act in May. Officials are still working out the details and structure of the program, and specific policies aren't expected until the fall.
Vern Heinrichs, president and chief executive of Arise Technologies, told Dow Jones that the company is using this time to prepare for what it hopes will follow the new clean-energy regulations: a surge in demand for solar products.
Arise Technologies has three operating divisions. Its PV Cell division makes cells at a plant in Germany. Its PV Silicon division produces silicon products, and its PV Systems division provides solar systems for solar farms and rooftop projects.
Heinrichs hopes the new rules will help increase consumer demand, and allow Arise to expand all three divisions.
He added that the company is particularly focused on trying to expand the reach of its systems division by building up its presence in Ontario. "We're doing all the preparation we can now," Heinrichs said. To try and build its brand and extend its customer base, Arise employees have been visiting properties and evaluating the potential for solar-power generation on site.
Arise gets C$500 to C$5,000 for each assessment, but Heinrichs thinks the biggest benefit comes from building relationships with potential clients.
Haywood Securities analyst Ralph Garcea says, "Arise is devoting a lot of energy to building up its pipeline of projects, which should help them move quickly when the new regulations are finalized." Garcea doesn't own Arise shares but Haywood has had an investment-banking relationship with the company.
Arise could use a boost. The company, which has never had a profitable quarter, had its worst-ever loss in the fourth quarter of 2008 - C$22 million or 18 Canadian cents a share. In the first quarter, it had a loss of C$14.7 million or 12 Canadian cents.
In Toronto Thursday, Arise is trading at 36 Canadian cents, near its 52-week low of 19 Canadian cents and well below its 52-week high of C$1.65.
Garcea said a meaningful turnaround is at least one or two quarters away, but he added that the new regulations could be the catalyst that Arise needs to swing to profitability for the first time. Garcea rates Arise at outperform with a C$1.25 target.
A key component of the Green Energy Act is the proposed feed-in tariff. The FIT guarantees clean energy producers specific rates for the power they produce.
The new rates haven't been finalized, but the provincial power authority has proposed a rate of 80.2 Canadian cents a kilowatt hour for rooftop solar projects or any project under 10 kilowatts, nearly double the rate promised under an old program.
Heinrichs thinks the combination of higher purchase prices and lower costs for solar products should make solar energy more appealing for homeowners and small businesses.
Under the new FIT, small systems and rooftop systems will get premium prices, ranging from a proposed price of 53.9 Canadian cents a kilowatt hour for large rooftop projects to a proposed price of 80.2 Canadian cents a kilowatt hour for small projects.
"The new feed-in tariff means a lot to our company," Heinrichs said. "It shows that Ontario is emerging as a leader in renewable energy, and we think we'll be able to capitalize on that."
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