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U.S. Power Outages Signal 'Below-Radar Demand Driver for Fuel Cells'
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An explanation is given in a Raymond James report for why fuel cells are superior over batteries for backup power generation during outages.

In a May 30 research report, Raymond James analyst Pavel Molchanov made the case for using fuel cells to protect "mission-critical enterprises against power outages" and, therefore, Bloom Energy Corp. (BE:NYSE), a provider of fuel cells-based power generation.

Molchanov first quantified the number of power outages that occur in the United States and their economic impact. He noted that overall, the country experienced 32,149 of them between 2008 and 2017 and affected 212 million Americans, according to data from Eaton, a supplier of backup power systems.

The cost of those outages to the economy was $27 billion per year according to E Source, a research and consulting firm for utilities, or between $18 and $33 billion annually per the U.S. Department of Energy.

Next, Molchanov reported which states experienced the most power outages during that same 10-year period. California topped the list with 4,297. Texas was No. 2, with 1,603, New York was third, with 1,528, and Michigan followed, with 1,369.

Twenty-two states, spread throughout the U.S., each experienced more than 500 outages during the past decade. Together, that group accounts for $16.7 trillion, or 80%, of national gross domestic product (GDP) based on 2018 numbers, GDP representing a "simplified proxy," Molchanov qualified.

Finally, Molchanov purported that conventional battery-based backup power solutions may or may not adequately address power outages, depending on the outages' duration. Whereas battery solutions typically are sufficient for up to six-hour long outages, they are not for prolonged outages lasting days or weeks, such as those resulting from Superstorm Sandy in the northeast U.S., Hurricane Harvey in Texas and Hurricane Maria in Puerto Rico.

"By contrast, Bloom's fuel cells provide a more durable, long-term solution," the analyst highlighted.

Raymond James has an Outperform rating on Bloom Energy. Its stock is trading now at around $10.80 per share.


1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures from Raymond James, Bloom Energy Corp., May 30, 2019


Analysts Holdings and Compensation: Equity analysts and their staffs at Raymond James are compensated based on a salary and bonus system. Several factors enter into the bonus determination, including quality and performance of research product, the analyst's success in rating stocks versus an industry index, and support effectiveness to trading and the retail and institutional sales forces. Other factors may include but are not limited to: overall ratings from internal (other than investment banking) or external parties and the general productivity and revenue generated in covered stocks.

The analyst Pavel Molchanov, primarily responsible for the preparation of this research report, attests to the following: (1) that the views and opinions rendered in this research report reflect his or her personal views about the subject companies or issuers and (2) that no part of the research analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views in this research report. In addition, said analyst(s) has not received compensation from any subject company in the last 12 months.

Certain affiliates of the RJ Group expect to receive or intend to seek compensation for investment banking services from all companies under research coverage within the next three months.

Raymond James & Associates, Inc. makes a market in the shares of Bloom Energy Corporation.

Raymond James & Associates has managed or co-managed an offering of securities for Bloom Energy Corporation within the past 12 months.

Additional Risk and Disclosure information, as well as more information on the Raymond James rating system and suitability categories, is available here.

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