We talk a lot about “right place, right time” when it comes to making an actual investment decision. The environment for investing in energy storage, specifically large-scale battery manufacturers and associated companies, is approaching that right place, right time moment. Here’s what makes this investment option compelling and potentially actionable in the very near future. After reading this update, please reach out to us directly with your name and email to request a list of our top picks in this space – some we own already and others we expect to own soon.
Right Place, Right Time
Ok, so here’s the situation
Battery and energy storage costs have dropped by over 70% in the last 4-5 years making them an affordable and attractive alternative. Alternative to what? Glad you asked. We’re not talking about double AA Energizers here. We’re talking about the likes of Tesla’s Powerwall for home gamers angling toward self sufficiency with their residential electric energy production, storage and use. We’re talking about the larger batteries going into the many models of plug in electric vehicles coming out of nearly every auto manufacturer in the next 2-3 years. We are talking about major utilities seeking to replace aging and very expensive natural gas “peaker plants” turbines with Solar “plus” battery solutions.
This just happened… NY approved a giant battery plant to replace a 50-year-old gas peak plant
If you live in a PG & E service area of California, you might resonate with the recent power outage choice made by your utility to avoid another massive wave of wildfires like last year. I’m just guessing that more than a few people are thinking about going off grid with solar plus battery storage systems in their homes after two years of this madness. Indeed, the time is right as battery installations and demand are just now beginning a long-term parabolic ascent toward mass adoption.
Finally, here’s the best part for investors. Battery companies, like solar and others that have experience massive drops in the price of their products, are now trading way below their price highs of January 2018 and in many cases their highs set in 2010. The entire Lithium-Ion sector is trading down 40%! and appears to be developing a basing pattern at these levels. Sentiment toward the batter sector and those who dwell in it like Tesla, is about as negative as I’ve ever seen. Of course, people hate Musk for a lot of other reasons. Naturally as contrarians, we start to get excited when everyone hates something. Tesla reports earnings this week and may run into more trouble so we’ll wait on that one but there are other pure plays in battery and energy storage we find very attractive now. Today, we bought (back) Enphase Energy (ENPH) which we believe has just completed a very deep and healthy consolidation of -26% from recent highs. Let us know if you’d like our watch list for other names that we hope to include in our www.Newpowerfund.com investment strategy.