- General Electric best of breed technology
- Quick payback period for the customers.
- Sales grow continues to ram at double digit growth
Clean Energy Technologies, Inc. (CETY) a seller of ORC heat generator solutions landed a marquis $1.1 million contract expected to close in the final quarter of 2019. The real significance of this order is that the installation will serve as a showcase for others in the region. When power plants consider capital expenditures to reduce inefficiencies they need to be certain that the integration is possible and that once fully integrated they are able to realize the cost savings or in the case of CETY they get to realize the additional power generation. The Turkish based landfill has 4 biogas engines that will be retrofitted with CETY’s ORC technology. CETY’s partner Corycos will be able to show this system to their customers in Turkey, Russia, Africa, Middle East, Central and Southern Asia. Allowing customers to touch and see the integration working will be a powerful motivator to buy from CETY’s partner Corycos instead of a competitor.
Best of Breed Technology
CETY acquired General Electric (GE)’s technology along with 27 global patents. The GE technology is incorporated into the Clean Cycle product which used a magnetic bearing turbine. Most of the inefficiency of a turbine can be traced to the gears and the shaft. This is not only a point of failure but something that requires routine maintenance. With the GE technology there is much less maintenance and that is a key selling point for new customers adopting this technology. The track record of 100 installation and over 1 million fleet operating hours gives plant managers looking to buy these systems a level of comfort with regards to reliability.
The payback period of a typical Waste to Energy power plant is 14 years. A 7 MW hydroelectric power plant has a payback period of 12.5 years. For solar power the payback periods range from 7 to 21 years. In the case of the Turkish Waste to Power plant the additional power generation is estimated at $250,000 annually which means that in a little over 4 years the system will pay for itself. These quick payback periods justify the move toward increasing the efficiency of current operations versus new construction.
The company recorded $328K in sales for the six months ended June 30, 2019. Extrapolating modest sales during the third quarter the yearend target could eclipse $1.6 million for the year. This could be a record year. In 2018 they had 1.33 million in sales and in 2017 they had .96 million in sales. This was a 20.3 % year over year gain with a 38.5% gain year over year in the prior period. The company has a market capitalization of $13.8 million and has close to 750 million shares issued and outstanding.
The company appears to be at a tipping point in sales. A review of their most recent offering revealed that a significant portion of the use of proceeds was allotted toward sales and marketing. In the absences of a sales and marketing budget the company is heavily relying on their joint venture partners. The good news is that these showcase installations should lead to additional sales in the region. It’s reasonable to think that each region could bring in 4 units for a total of 8 units during the New Year. If the company is successful in raising money sales could ramp exponentially. Another possibility is that the company could evolve into a power generation company. Their leasing deal with the Marshall Islands hinted at a possible shift in strategy. The final thing to watch for is any company sponsored financing of the equipment on behalf of their customers. Any strategic partner that could finance a part or all of their units could aid in significantly ramping sales as customer in this space are looking for a value proposition.
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Disclosure: We hold no position in Clean Energy Technologies, Inc. (CETY) either long or short, and we have not been compensated for this article.