Tecogen Keeps Reeling in More Projects
In less than a week’s time, Tecogen Inc. (TGEN – $5.06), which designs, manufactures and installs industrial and commercial Combined Heat and Power (CHP) systems, announced the sale of six additional units with a total price tag of well over $1 million.
First, Tecogen received an order for three CM-75 kW combined heat and power (CHP) units from a major multi-national energy service company (ESCO). The CHPs will be installed in three different schools in and around New York and New Jersey. The total combined deal value for the projects is approximately half a million dollars.
And a few days later, the Company won two contracts from National Mechanical Services. The new projects include two CM-75 kW units for a 454-unit multi-family residential building in Yonkers, NY and a state-of-the-art InVerde e+ 100 kW unit for a 14-story student housing building near Central Park in New York City, NY.
Tecogen’s strong working relationship with a growing number of contractors and ESCOs is paying off and helps to secure a constant flow of new orders. National Mechanical Services, for example, has been a partner of Tecogen for several years. In fact, these two new projects bring the total relationship value with this contractor to in excess of $1.5 million.
In addition, The Metro Group, which recently acquired National Mechanical Services, is a water treatment and mechanicals sales, service and installation contractor that specializes in the multi- family residential, institutional and commercial market sectors. It has service contracts for thousands of buildings and performs over a hundred thousand service visits per year. Consequently, there are plenty more potential opportunities for Tecogen with just this one customer.
Schools Saving Money
One of the main drivers for end users to opt for Tecogen’s equipment is significant cost reductions. The Company’s cogeneration systems produce electricity using engines that have been specially adapted to run on affordable natural gas. The heat that’s generated during this process is captured and used to heat or cool the building, or to produce hot water.
Because waste heat is recovered from the electric power production process, the systems can achieve fuel energy utilization upwards of 90% with minimal losses – a level of efficiency that directly translates into savings for the customer.
So although undertaking energy efficiency projects may not immediately seem to be aligned with a school’s core mission of education, the cost savings that are generated each year thanks to the new installation help free valuable resource dollars that can be redirected towards long-term learning goals.
Tecogen offers another service that makes their equipment uniquely well-suited for schools. In order to avoid as much disruption as possible to the learning-environment, projects for schools ideally need to be completed in the summertime. Because Tecogen’s accessories and load modules are custom made in its factory and then shipped to the site, the installation schedule can be compressed to meet a tight project completion deadline.
One additional factor for these partners to select Tecogen, is its unique and patented Ultera technology, which reduces emissions of harmful pollutants such as NOx, CO and HCs to near-zero levels. Especially for sensitive environments, such as educational facilities, this is an important feat.
Tecogen keeps winning new orders. Its backlog is at record levels and its production facility undoubtedly is running at full throttle.
It’s also good to see that the recent orders are from repeat customers. This indicates that management’s initiatives to build long-term relationships with key partners is working and, even more importantly, that these partners are satisfied with the Company’s service and equipment.
We already look forward to Tecogen’s second quarter results, which will be release on August 10th. Buy recommendation.
|Smallcaps.us Advice: Buy||Price Target: $9.41||Latest Company Report (pdf)|
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