SUNNYVALE, Calif. (
) -- The alternative energy space has seen its fair share of booms and busts. And the latest to enter the "boom" phase is clearly California's
But is Bloom Energy the next great company to debut in the renewable field, or is the fuel cell company destined to join the long list of great technology ideas that don't translate well into investor profits?
Bloom Energy's portable power plants, called "Bloom Boxes," allow homes and businesses to generate electricity from hydrogen and oxygen. And this conceit has quickly made Bloom Energy a darling of the press. The company was featured this past weekend on
. Governor Arnold Schwarzenegger even played a starring role at a press conference hosted this week by Bloom Energy CEO K.R. Sridhar.
Still, public stocks in the alternative energy space have a pretty short history. Read on for an assessment of Bloom Energy's prospects....
A fair share of the successful transition companies from venture capital to initial public offerings have been solar companies. Indeed, when Deutsche Bank's DB Climate Change Advisors recently created its DB NASDAQ OMX Clean tech Index, more than 30% of the public companies were solar stocks, reflecting how quickly solar firms have grown from venture capital darlings to publicly traded shares.
Solar stocks have been mired in uncertainty in recent months, as European government support for photovoltaic technology wanes. Does that mean it is time for investors interested in playing alternative energy to look elsewhere -- such as the solid oxide fuel cells
pictured above -- or does it just mean that hype will have to over-inflate with new alternative energy stories?
Bloom Energy is still a private company funded by the alternative energy venture capital specialist
Kleiner, Perkins, Caulfield & Byers
, among other venture investors.
Bloom Energy also has a pretty impressive client roster, ranging from
Bank of America
Granted, you can't get your fair share of Bloom Energy yet. But as Bloom Energy garners more attention from the mainstream press, the hints that investors are always ready for the next big thing in alternatives surfaces.
Comments from investors on the Web in the wake of all the press about Bloom Energy often reflect all the hope -- and volatility -- in alternative energy stocks, with one simple question: Is Bloom Energy the technology that will replace wind and solar?
the bellwether stock in the sector, was once a $300 stock, and on Thursday
First Solar shares hit an annual low below $100.
And the fortunes of the photovoltaic solar companies show that for all the promise in new technology, the ability to develop sustainable profits is a long and complicated path, involving not only temperamental technology investors, but government subsidies and legislative hopes that can change on the fly.
Bloom Energy CEO K.R. Sridhar
above and his company have definitely been making waves in the alternative-energy sector. Indeed, Bloom Energy recently made the coveted
World Economic Forum
2010 Technology Pioneers
There have been notable examples of past annual Technology Pioneers that have not successfully made the transition to the public markets. Take
Both these companies were among the World Economic Forum new technology elite in 2008. However, Nanosolar's long-awaited IPO still has not happened. Advent Solar, meanwhile, after successive rounds of layoffs, was sold to
in late 2009.
Fuel-cell startups, specifically, also have a mixed track record. Australia's
Ceramic Fuel Cells
, the U.K.'s Ceres Power Holdings, and Danbury, Conn.-based Fuel Cell Energy have not shown consistent profitability, according to a
article that is among the recent hype fueling interest in Bloom Energy.
Ultimately, it is all about developing alternative energy with a cost structure that is not reliant on government subsidies. The solar space is learning the hard lesson now of not achieving sufficient cost reductions in an era of lucrative government subsidies.
And while no one is counting solar out, should investors be ready to count Bloom Energy
whose production facility is pictured above and its Bloom Boxes in, or even as ready to replace solar and wind?
Bloom Energy is talking up its cost advantages, but Fellow World Economic Technology Pioneers Nanosolar -- which has backing from Google -- has talked consistently about the cost advantages it has versus existing companies in the solar space, but has yet to give public stock investors a crack at its technology.
And while Bloom Energy blooms in the mainstream press, the real question for investors is this: How long it will be until retail investors get a peak inside the financial model of the Bloom Box?
-- Reported by Eric Rosenbaum in New York.
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