One of the basic premises of Camino is to improve investment decisions by identifying sustainable energy strategies, tracking their performance, and sifting out the winners. Last year I identified Solar and the huge Renewable Electricity strategy. In Feb 08 I upgraded my view of the fuels market to encompass all Biofuels. The indices for these strategies include 72 PurePlay companies with market cap of USD 215 billion representing 65% of Camino’s entire database.
Two key insights…..
Since the beginning of the year I have been working to identify other strategies that are developing. Two key themes keep recurring. First, the sustainable energy business is primarily about the renewable generation of electricity – inside the meter in the case of Solar, and outside the meter for Renewable Electricity. Second, improved utilization of electricity is a major, but fragmented trend that has now given rise to our newest strategy, LED and Lighting.
Get used to lumens
In the “old” days I used to measure light in watts, after all, almost all residential lighting was incandescent and of equal, if dismal (about 2%), efficiency. Now we measure lighting efficiency as lumens/watt. Flourescent tubes have long been used because of their efficiency (7 – 15%) but the incandescent bulb hung on in many applications. Compact florescence lights (CFLs) have such a big increase in efficiency, from about 16 lumens/watt for incandecents to between 45 and 70 lumens/watt, that they have really started to penetrate the market. This happened despite their initially crummy color spectrum and form factor. While CFL makers have been improving both of these items they are still fragile and they still have mercury in them.
You can now get a standard LED with a reasonable 54 lumens/watt from Cree and there are research products in the 115 – 150 lumen/watt range. LEDs have a number of other advantages over CFLs including ruggedness, spectrum, dimming, and longevity. Unfortunately they cost a LOT more. Even so, LEDs are becoming a significant factor in streetlights, flashlights, autos, and architectural lighting. Given some time I expect the research efficiencies to reach the market and costs to drop thereby opening up a bigger markets for LEDs.
In fact LEDs and other efficient lighting have succeeded enough to where we now have 9 companies that pass all our index screens with a market cap of USD 10 billion. This is bigger than Camino’s Biofuel index and the largest of the electricity utilization activities. I now feel the strategy is of sufficient importance to cover. Hence the LED & Lighting index which Camino has computed since March 31.
Changes to the site..
The Camino company research database and return computations continue to be available to users for free. It’s a great way to browse the business using some key company attributes.
The research tools and index tracking on Camino have allowed me to take profitable positions in 16 Renewable Electricity companies since October 2007. The tools also allow me to write my “Week in Sustainable Energy” review. Because of the growing investment in these tools, and my desire to increase this investment, Camino now makes its core index tracking and risk analytics available for a small fee. Check out a sample of our new index report for the LED index, or test the site with a free trial.