Akeena Solar (AKNS) Disappoints Again, Profitability Nowhere In Sight

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08:29:12 am on April 29, 2010

You kind of expected that with Akeena Solar (AKNS) solar product being sold in Lowe’s stores, that might give the company a boost and get them closer to profitability, but it hasn’t helped much at all up to this point.  This is a company that continues to flounder and profitability still appears a long ways off.  The company reported an EPS loss of .09/share which was a cent worse than what analysts expected and about what they’ve been reporting over the past year.  Revenue was a disappointment as well at $6.5 million which was $1 million less than what analysts expected and less than last year’s quarter. 

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The CEO tried to put a positive spin on the quarter highlighting the gross margins of 23% and the increasing backlog.  He also noted that the company continues to expand its distribution channels and its relationship with Lowe’s.  That’s all great, but where are the results?

The company expects to be EBITDAS break even in the 4th quarter with $18 million in revenue for the quarter.

Shares of AKNS have actually been quite bullish recently, so it will be interesting to see if AKNS can hold support around a buck and stage another surge higher.  I think the results this quarter will likely stall the stock over the next few months, but if the results start improving, this might be a stock to watch later this summer.  Shares are down about 5% in pre-market trading.

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Comments  

Akeena is in a market where they are trying to compete against the likes of Solar City with their give away leases or one or two dog small contractors with no overhead. As long as Akeena keeps the business model of buying business they will never make money. Akeena has a good product but the market they are competing in sick. Installers do not make money, the money is in financing solar leases and purchases.

 

Thanks for the comment Bill. Real Goods Solar (RSOL) is finding a way to turn a bit of profit. Any thoughts on the differences between these two biz models?

 

Real Goods Solar (RSOL) has no special magic and in fact several corporate oddities that very likely will handicap their growth and profit.

1. Over 55% of the stock in Real Goods Solar is owned by Gaiam which is controlled by Jirka Rysavy. While this relationship is not a problem per se Real Goods Solar relies on Gaiam for resources, services and leads.
2. Real goods Solar has the same problem as Akeena, they both are buying work. Solar City is eating their lunch. Solar City gives away solar systems to get the back end financing which is where the money is. Akeena and Real Goods Solar do not have the resources to compete with Solar City. Whether Solar City is successful long term is still a question to be answered but in the mean time there is no money to be made in simply installing solar systems for residential and small commercial.
3. The forth quarter should be a solar installer’s best quarter. The forth quarter is where installers are finishing up summer and fall sales. Real Goods Solar revenue fell in the forth quarter. That would concern me.
4. Real Goods Solar advertising does not compare to Solar City and Akeena. Solar City has a huge radio campaign and Akeena is spending too. Real Goods Solar has no radio campaign to speak of. I this business you have to be heard above the crowd and Real Goods Solar in not.
I don’t see where Real Goods Solar has business model that makes them stand out from the crowd. If real Goods Solar was to make any real money it looks like Gaiam would be the beneficiary. If you want to be in solar try First Solar or REC.

 

Thinking about going solar? Think again! Don’t be stupid like I was. Don’t be fooled by all the sales hype and deceit regarding “going green”, “carbon footprints” and “energy savings” that you will achieve with solar power.

We believed that we were going to save money on our electrical bills by having a $31,000, 4.73 kW DC, 27 panel Andalay Solar system installed on our west facing tile roof. Sales and installation services were provided by Akeena Solar, Inc. and the system owner is Sun Run, Inc.

The California Solar Initiative approved a payment of $5,856 to New Resource Bank. So we know that somebody made some money off of the solar system on our roof (probably Sun Run’s bank). We have not made or saved any money!

There was also an estimated Federal Investment Tax Credit of $7,590 for April, 2010 included in the financial benefits for Sun Run, Inc. We certainly have not received any financial benefits from having the Akeena/Andalay Solar System installed on our roof. We do not own the system. We just pay Sun Run approximately $144/month for the electricity generated by their system. So, Sun Run provides electricity to PG&E from the Akeena Solar System on our roof and we pay Sun Run an annual fee of approximately $1,728.

We recently had our first annual “true up” payment to PG&E and the total was approximately $770. We also paid an electrical “meter fee” of $12.42/month which totals $149/year. So, our totals to PG&E for electricity were approximately $919/year.

Totals to Sun Run ($1,728) and PG&E ($919) are approximately $2,647 for the first year of our so called “energy saving” and “money saving” solar system. Our total PG&E electrical bills for the “base” year (6/7/07-6/3/08) were approximately $2,247

If you add in the $2,552 we paid up-front to Sun Run our “money saving” solar system cost us approximately $2,952 MORE THAN OUR BASE YEAR COST FOR ELECTRICITY!

Perhaps you can understand why I urge you to think twice before believing the hype regarding “going green”, reducing your “carbon footprint” and saving money with solar. I am 74 and my wife is 73 and our social security income is effectively shrinking. I thought we were going to save money on our energy bills. Boy, was I wrong! Be smarter than I was. Check with your attorney and accountant before you sign up for solar.

William Barkley
2487 Santa Ana Ave.
Clovis, CA 93611

 

Yes, too bad a lot of homeowners are being sidetracked by solar leases which are structured to make money for the bank, not the homeowner. With a lease the bank gets the tax credits and rebates. For homeowners the best financial situation occurs with a cash purchase. If you don’t have savings for a cash purchase look at financing the system so you can keep rebates and tax credits. You might be cash flow negative for a few years, but then it’s free electricity for 30 years!

 

Your solar panel should be hooked straight to your refridgerator, cause it runs 24 hours a day! A second panel should be used for a/c power. Only a fool would make a “deal” with a power company!

 
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