The tax loss is worth $300 mill to a profitable company.
The c65 is a mature , fully developed product. No one will make a better product at this power range. It is very reliable and is selling at about 200 units a year. It is the worlds best at some applications.
Not for a year or more? -Good- They have learned from the C200 disaster. They're trainable. I've been saying 1 to 3 years for the past year-or more.
Sounds like it might be 3-4 megs of gensets+ balance of systems--heat--cool
Big enough to have other choices--but could be multiple Capstones.
It will start having the occasional breakeven quarter this year. I am concerned that new MT entrants will limit capstones ability to price their products in the next few years. The potential market is very big. Capstone has spent the last 12 years teaching people to buy MTs. Now others will enter the market.
Flex has a usable product for some markets---ICR tec has a new turbine design that they claim is more eff. and cheaper to build. And I expect China to show up.---A lot of turbines will be sold over the next 5 years
I'm worried that the prices won't let Capstone make money.
the Saudis know how big their reserves are. They consume about 3 million barrels a day . And they have some of the best solar resources in the world.
As batteries and storage come on, there is no reason that the whole country can't run on electricity from solar.
The same can be said for the C250 --and, the drawing board C370.---- IRC has installed 2 of their 350 kw gensets in field trials.--Problems will be found--it's a field trial--they will be fixed.
IRC isn't going to sell gensets--they will leave that to one or more large well established billion dollar companies.
It would make a good addition to the CAT-Dresser-Solar- product line.
But, there are at least 10 companies selling gensets with a worldwide pressence.
And, I can't figure out why a Chinese company hasn't entered the market. There is plenty of engineering talent in their aircraft gas turbine companies.
The ICR tec 350 KW mt. , if it is successful , will rapidly enter the market.--It's newer design is cheaper to build and much higher in eff.
Looking out the next 12 years I expect Capstone to only get 60% of the small MT market.
My objection to tar sands is the use of very clean Nat. gas to melt tar out of the ground. --It would be much better to spend the billions of dollars to convert the truck fleet to Nat gas.
Or. give a $4000 subsidy to the purchase of Priuses to eliminate the need for the oil.
Or, geothermal heat in new England to eliminate fuel oil.
Reliable- dispatchable-24 hour a day--island ability--Renewable !---In Alabama this means wood ---A big pile of wood chips.
Good post! I love this tech. But, it is very , very hard to teach people to buy it.
Over the years I have bought CPST at prices from $ 2.30 to $ 0.92--My last purchase was 5000 at $1,31
If capstone turns a profit, I value the company to a buyer at $1 for the tax loss--$ 1 for the company --And, $1 for the future ( hope-come )= $ 3.
Capstone and Brayton set a goal of building a 350 KW MT.--Capstone hasn't mentioned their efforts lately--Brayton took a clean sheet of paper and designed a MT that is in field trials. I'll bet that they didn't start the design process without an araingment with one or more companies to use the MT in their products.
If you don't think Brayton scares Capstone, call them up and ask.
Long 35 k shares--AP $1.66.--Long Cpst from 2003. $ 19,000 in the hole.
Air bearings have been around for more than a century.--Capstone has a patent for one type, from about 2000. This patent is running out.
Brayton is developing a 350 kw 3 stage MT at 40% plus eff.--They plan to sell the power unit to others for packaging.--any large Co.in the genset business can buy it and package it for sale.
Consider a world where the local CAT dealer asks ' do you want that 40 % eff 350 kw genset with pistons or a turbine ' ?
What does CAT know about turbines?--go to solar turbine--a CAT company. San Dago CA.
In 4 years I expect that buyers will have the choice of 4 C250s or 3 B350s to produce a megW. The Capstone product will convert 34 % of the fuel to elect.--The Brayton design will convert 40%. The Brayton design will be 15% cheaper to buy.
Capstone will lack pricing power. Buyers who want electicity, not CHP, will buy the Brayton unless they have free fuel.
Capstone at breakeven or a small profit is worth $3.---It's trading at $.75.
The market is a forward pricing mech.
Half their sales have been to the O&G market
If prices stay this low, a lot of c65s and c200s will start to come out of the fields and go into the used equipment market..
Brayton will have their C350 beyond field trials by then. Someone in Korea or China will be packaging it for sale --at a lower price. I expect it to be offered at $700 a KW. Capstone has no answer to this challenge.