A huge shift is occurring in the way corporate America
views energy usage.
In a March ChangeWave survey of 1,400 respondents
knowledgeable about their company's energy spending, more
than one-in-five (22%) reported their company is Very
Concerned about reducing its energy usage. Another 35% say
they're Somewhat Concerned.
The increased levels of concern are ushering in a
transformational shift in U.S. corporate energy consumption
' with an astounding 26% of respondents saying their
company has used Less energy than normal over the past six
months.
By comparison, only 16% say they've used More energy.
In a related finding, nearly a quarter of respondents (23%)
report their company's spending on energy efficient
products and technologies will Increase over the next six
months; three-times the percentage that see a Decrease (8%).
"The perfect storm of rising energy costs and concern over
global climate disruption is forcing companies to rethink
the most basic ways they use energy," said ChangeWave
analyst Joshua Levine. "A tremendous shift in corporate
perception is occurring and it's going to impact virtually
all industries and create investment opportunities in the
process."
To track the corporate race towards greater energy
efficiency, we asked respondents which technologies and
products their company is actually using. Two technologies
' solar power and LED lighting ' stand out far above the
rest.
Alternative Technologies - Here Comes the Sun
Corporate use of "off-the-grid" energy technologies is
gaining momentum, with 8% of respondents saying they
currently use alternative sources to generate power. Going
forward, better than one-in-five (21%) say they'll install
and make use of alternative energy sources within the next
five years.
The shift to alternative energy is great news for solar
power, which dominates the landscape.
Solar is far ahead of other alternative energy options,
both in terms of current corporate usage (51%) and future
planned users (72%). Wind Power is relegated to a distant
second for current (24%) and future users (19%).
Solar Flares
According to the survey, an unattractive payback period
(24%) still ranks as one of the big barriers to corporate
use of alternative power technologies, second only to
initial capital investment (39%). And when asked how long
they think it will take to achieve a payback for their
current solar energy investments, the consensus estimate
among respondents is seven years (for future solar energy
investments it's 6.4 years).
But despite this, with crude oil prices hitting new
all-time highs the solar industry clearly has momentum and
is helping bring about a transformational shift in
corporate energy use.
"Solar's rapid expansion on the corporate energy efficiency
front is good news for companies in the solar food chain,"
says Josh Levine. "Polysilicon producers, solar cell
manufacturers and solar installation firms are all likely
beneficiaries of the trend toward the sun."
Adding to solar's attraction is the near certainty of
continued tax credits.
U.S. lawmakers appear likely to pass an extension of a key
solar industry tax credit. The bill, if passed, would
extend the 30% commercial tax credit by eight years, the
residential credit by one year and would remove a $2,000
cap on residential systems. Importantly, utilities would be
able to take advantage of the credit for the first time.
According to Levine, the companies best positioned to ride
this solar wave are the major photovoltaics manufacturers
like First Solar (FSLR), SunPower Corp. (SPWR) and Suntech
Power Holdings (STP) ' each of which are leading the solar
energy industry ever closer to the "Holy Grail" of
alternative energy economics ' grid price parity.
LED Lights Up
Along with solar power, there is another standout in the
corporate race towards energy efficiency.
Overall, the survey points to lighting as the single
easiest area for businesses to reduce their energy usage.
It is little wonder then, that energy efficient lighting is
the top product/technology companies will be purchasing
over the next six months to improve energy efficiency.
And while Compact and Regular Florescent Lighting had the
highest market share over the past six months ' LED
Lighting (21%; up 7-pts) is set to be the clear momentum
leader going forward.
We note that the biggest barrier to the more widespread
adoption of LED lighting technology is price. Nearly
three-in-four respondents (74%) say their company would
only consider switching all of its lighting with LED if the
cost were lower than $5 per bulb. But despite pricing
issues, the survey definitively shows LED lighting as a
prime spending area in the world of corporate energy
efficiency.
This is a boost for major lighting firms like Philips
Electronics (PHG) and General Electric (GE), who are the
leading LED manufacturers and distributors. However, Levine
believes the smaller pure-plays in LED lighting technology
are poised to be the biggest winners.
"Among the handful of innovators that have developed LED
technologies, Cree Inc. (CREE) stands out as a likely
candidate to be eventually acquired by a lighting giant,"
says Levine. "The light fixture market is a 2.5 billion
unit market worldwide, and Cree's technologies are clearly
addressing this enormous opportunity."
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For the latest ChangeWave news on technology trends and
companies, visit: http://blog.changewave.com
The ChangeWave research network is composed of 15,000
highly qualified business and technology professionals.
Members are surveyed on a range of topics, and the findings
are converted into quantitative and qualitative reports.
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