Sales for Calgary-based Eguana Technologies Inc. (EGT:TSX.V; EGTYF:OTCQB) received a big boost with the announcement of CA$3 million in orders for its AC Battery in Australia. "Through our partnership with Itochu Corporation we have been able to establish a strong beachhead in the Australian market with a very capable national distributor that positions us for growth," said Justin Holland, CEO of Eguana. "Enirgi Power Storage has the scale and battery expertise required to deliver our products into key regional markets for energy storage within Australia. We are pleased to be able to support their growth expectations across residential and commercial segments," Holland added.
According to Eguana, the "Australian residential storage market is widely expected by analysts to be the fastest growing storage market in the world over the next several years. Australia's market dynamics are being driven by a unique combination of behind-the-meter self-consumption and grid service revenues supported by the country's utilities and electricity retailers."
In an article published in RenewEconomy, Sophie Vorrach noted that businesses and households in Australia are installing rooftop solar at a rapidly growing rate, and that industry analyst SunWiz reported that a "total of 5.7GW or rooftop PV had been installed on 1.7 million households and businesses at the end of May, capping off a record first five months of installs in any year in the country's history." Several areas of Australia, including South Australia and New South Wales, are facing double digit electricity rate hikes, a factor that is hastening the adoption of solar.
A report by Bloomberg New Energy Finance predicts that in Australia, "renewables and storage make up 81 per cent of all new capacity additions to 2040."
Analyst Nikhil Thadani of Mackie Research wrote on June 26 that Eguana's "entry into the large Australian market could be accelerated by this relationship via Enirgi Power Storage channel, which builds upon EGT's relationship with Itochu, as all involved parties have been working diligently for months to get traction going."
Thadani added that with the "order book up nicely so far in F2017 (~10x), we expect EGT to exit the fiscal year with orders beginning to convert into revenue in a consistent fashion. EGT's previous quarterly peak revenue was ~$1.5 mln/qtr. Based on how these orders translate into revenue and follow on orders, the stock should start to build nicely from here."
Mackie has a $0.70 per share one-year target, "based on our blue-sky upside." The stock is currently trading around $0.27 per share.
Eguana's energy storage solutions have gained the inside edge in Hawaii, where, according to the company, its residential solar storage has become the "only grid interactive lithium based system with an expedited permitting approval from the Honolulu Department of Permitting and Planning, reducing the AC Battery permitting process time from several months to a 5-minute web based automatic approval."
Currently about 16% of Hawaiian electric customers have solar photovoltaic systems, a figure that is about 20 times the U.S. national average. With the mandate in Hawaii to employ only renewable sources of energy by 2045, Customer Self Supply is becoming the standard, where households have their own storage system. Eguana has partnered with E-Gear LLC to supply its residential AC battery for installation.
"E-Gear installations began within days of being granted the expedited permitting approval process for the AC Battery and we are now seeing predictability with in the sales and ordering cycle for solar+storage in Hawaii," said CEO Holland, announcing the CA$2.5 purchase order from E-Gear on May 1. "Creating consistent and growing baseline demand with our factory integrated and certified AC Battery was a crucial step for the Company and our expectation is to see quarter over quarter growth from the Hawaiian market as the state drives toward its 100% renewable energy target."
In Eguana's May 25 update, the company reported that its "year to date order book is beyond $5 million in the US, second generation Residential AC Battery has been completed, and the supply chain has been set up to begin shipments in June." Sales in 2016 were in the $700,000 range.
In March, Eguana was one of five companies highlighted by Canaccord Genuity in its Sustainability Watch List.
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