Capstone Turbine Corp is leading the charge in a green energy revolution

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  • Capstone holds more than 100 patents and produces  a range of innovative microturbines that generate clean, green electricity



  • A new market for Capstone microturbines is blossoming among cannabis producers



  • Capstone expects to see both product and aftermarket service revenue grow in coming quarters.



Capstone Turbine Corp () is a multi-faceted energy company that manufactures low-emission, clean-energy microturbine technology for consumer and commercial use globally.


Based in Van Nuys, California, Capstone holds more than 100 patents and produces a range of innovative microturbines that generate clean, green electricity for anything from heating and chilling water for hot showers and air conditioning to powering new generation green skyscrapers.


CEO Darren Jamison compares Capstone’s microturbines, which have only one moving part, to small jet engines that produce electricity and heat while still being green – powered by a range of alternative clean fuels including natural gas, biogas and propane.


The microturbines range from a 30-kilowatt, consumer-level unit up to 200-megawatts – enough to power skyscrapers.


In New York City alone, the company’s microturbines are used in hundreds of buildings, including two units at Hudson Yards, One Vanderbilt next to Grand Central Terminal, as well as Kings County Hospital in Brooklyn and big businesses such as Fresh Direct.


“We make electricity cheaper than they can buy from the grid,” explains Jamison.


With a legacy in the oil  and gas space, Capstone saw an opportunity to join the green energy revolution when oil prices plummeted to around $30 per barrel from about $125 in 2014, putting a dent in the business and prompting diversification.


The move to clean energy, Jamison says, responds to growing demand on a global scale as architects, engineers and real estate investment trusts (REITs) go green and embrace on-site power generation.


With 9,000 machines in 73 countries, including Latin America, the Caribbean, Middle East, Africa, Europe, Fiji, Mali and other underserved parts of the world, Jamison cheerfully compares Capstone to the United Nations in the scope of its international energy footprint.


Its 932 megawatts shipped have generated enough energy to power every home in Philadelphia. And with electricity costs rising globally, demand for the company’s microturbines is growing.



Inflection point


A new market for Capstone microturbines is blossoming among cannabis producers, who are renting spaces to build new grow houses but can’t get the energy they need from local utilities, which leads them to Capstone’s microturbines.


“Our product creates more energy while still being green,” Jamison says, and that appeals to a new generation of cannabis growers who like “the green aspect of our product.”


Demand is highest, he says, in Colorado, California and increasingly in Canada, where medical and recreational marijuana has already been legalized.


Outlook


As of December 31, 2018, the company had $16.7 million in cash and equivalents, $13.2 million in accounts receivable, with total inventories of $19.5 million. It recently announced a plan to preserve operating losses as future tax write-offs.


Product revenue in the second quarter has jumped 22% year over year, reaching the highest level in five quarters, and total revenue grew 12%.


In February, Capstone secured a $30 million three-year note from to replace a $15 million credit facility.


Capstone expects to see both product and aftermarket service revenue grow in coming quarters.


But the top line is the main goal, as the company has worked hard to get operational costs down.


“That’s our goal for the next year,” he says. “To really grow revenue, to grow our top line.”




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