Small Caps Take Large Role in Energy Efficiency

December 11th, 2013
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As people around the world begin to focus more and more on energy efficiency, companies are catching on and beginning to offer services to help consumers and businesses reduce their energy use. While we've been getting much better at improving the fuel efficiency of everyday products and services, there is still plenty of work to be done. Federal and state guidelines across many sectors are encouraging businesses and consumers to use energy sources more efficiently. For example, California is now requiring utility companies to use renewable energy for a third of their total production by 2020. These regulatory requirements are providing ample opportunities for companies that are invested in development of new technologies that increase energy efficiency or promote the viability of renewable energy sources.

Small cap companies are taking on a large role in the future of energy. From small cap battery manufacturers to consulting firms that help other companies navigate the waters of government energy mandates, these small cap stocks to watch represent just a few of the companies working to create a more energy efficient future.

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Lime Energy Co (Nasdaq:LIME), based in Huntersville, NC, is a company that helps small businesses achieve greater energy efficiency through direct install work and demand side management. According to their website, they've helped companies save a total of 837,137 MWh, enough to power 88,419 homes for one year. While Lime's financial troubles began last summer with unreported revenue, the company recently regained compliance with Nasdaq regulations for continued listing. They were also awarded a contract valued at approximately $22 million from National Grid for implementation of their Small Business Direct Install program. LIME closed November 25th at $3.50, up $0.11, with a market cap of $12.58 million. Their 52-week trading range is $3.06 - $6.65.

While not a pure-play mover in the energy sector, Irvine, CA-based DecisionPoint Systems, Inc * (OTCBB:DPSI) has been expanding their work in the energy sector by providing their services to utilities companies. Most recently, the company entered into a strategic partnership agreement with Landis+Gyr to provide in-the-field mobility systems for Landis+Gyr's smart grid advanced metering solutions. DecisionPoint will provide software tools for Landis+Gyr's field technicians to install and troubleshoot meters in the field, helping to maintain energy efficiency for customers. DPSI closed November 25th at $0.476, up $0.006, with a market cap of $5.71 million. Their 52-week trading range is $0.43 - $1.30.

Another company that works to create energy efficient solutions for companies is Ecology and Environment, Inc (Nasdaq:EEI), based in Lancaster, NY. They provide consulting services to commercial and government clients seeking to improve energy efficiency and implement green programs. The company works internationally in more than 113 countries. In 2011, the company was awarded a major contract from the U.S. Army Corps of Engineers for $21.5 million to provide architect-engineer services for hazardous and radioactive waste programs. EEI closed November 25th at $10.80, up $0.06, with a market cap of $45.91 million. Their 52-week trading range is $10.05 - $14.42.

Of course, it's not just services that help create greater energy efficiency. Small cap companies are also working to create products that can improve energy efficiency. New Castle, PA-based Axion Power International, Inc * (OTCMKTS:AXPW) is working to add energy efficiency to existing utility grids with their PowerCube, created using their advanced lead acid PbC batteries. The PowerCube is a portable energy storage solution that uses strings of PbC batteries, which replace one end of a traditional lead acid battery with activated carbon, to store energy created from renewable sources, like solar and wind power. This amplifies energy efficiency by storing excess renewable energy when it's created, dispensing it when needed. Axion Power recently announced the sale of a PowerCube to be incorporated into a solar energy project by an undisclosed buyer. AXPW closed November 25th at $0.115, up $0.001, with a market cap of $15.10 million. Their 52-week trading range is $0.10 - $0.38.

Small cap companies bring a lot to the table in the energy efficiency sector, providing much-needed services and products to businesses, government and consumers. By reducing energy usage or using it more efficiently, we can save money and help reduce greenhouse gas emissions at the same time.

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