Ocean Power IPO Heads for Choppy Waters

That much seems a reasonable bet. So far this year, the Scottish government gave Ocean Power a conditional grant to built a 150-kilowatt system off Orkney, Scotland; and the Pacific Northwest Generating Cooperative signed an agreement to develop a system off the Oregon coast.

But even if those plans pan out, they could take years to erase the company's high R&D and administrative costs. In the nine months through last January, product development costs rose 56% to $4.1 million -- equal to 271% of revenue. SG&A costs rose 42% to $3.1 million, or 204% of revenue.

Given the growing demand for alternative energies, it's easy to wish companies like Ocean Power well. But there is a difference between good wishes and wishful thinking. Until near-term profit is in sight, Ocean Power's stock might find itself navigating rocky waters for a while.