According to Barron’s, “Nationwide, 98% of U.S. homes have no back-up generator.” This limited penetration rate, along with rising energy costs, growing interest in energy efficiency, increasing power outages and loss of grid electricity, Portfolio 21 expects greater demand for generators. Portfolio 21 also believes that the consequences of climate change, including more erratic weather patterns and natural disasters that can cause extended power blackouts, will increase demand for Generac’s product offerings. Generac’s products utilize numerous fuel types (natural gas, diesel, or propane) enabling both off- and on-grid use. For example, the company’s EcoGen residential generator was designed specifically for off-grid use and runs on propane, which is an accessible fuel that can easily be stored. Generac also recently developed a bi-fuel industrial generator that utilizes both natural gas and diesel fuel. These generators emit approximately 30% less nitrogen oxides and 50% less particulate matter compared with diesel-only units.
Although the company communicates the environmental gains of its products, Portfolio 21 has requested that Generac improve its overall environmental reporting to include key performance metrics such as group-wide waste, energy use, and emissions.
To the best of our knowledge the above information is accurate and was obtained from sources we believe to be reliable. Neither the information presented above nor any opinion expressed shall be construed as an offer to sell or a solicitation to buy the security. The views expressed are those of portfolio management as of 12/31/13 and may not reflect current opinions or subsequent events.