Capstone Green Energy Secures a New 600 kW EaaS Contract as Rental Contracts Surge to 35.4 MW, a 37% One-Quarter Increase
Capstone Green Energy Corporation (NASDAQ: CGRN) has secured a 12-month Energy-as-a-Service (EaaS) rental contract with an oil and gas company in Anchorage, Alaska. This contract enhances Capstone's EaaS business, which has seen significant growth, increasing from 7 MW in March 2021 to over 35 MW today. The company has saved clients an estimated $698 million in annual energy costs and reduced CO2 emissions by over 1.1 million tons in three years. Capstone is also implementing a re-rent strategy, utilizing pre-owned units to expand its EaaS offerings without significant capital investment.
- Secured a 12-month EaaS rental contract, reflecting strong customer demand.
- Over 35 MW of contract capacity, indicating 37% growth in one quarter.
- Estimated annual savings of $698 million in energy costs for customers.
- Reduced CO2 emissions by over 1.1 million tons over the past three years.
- Implemented a re-rent strategy to enhance EaaS growth without significant capital expenditure.
- Margin rates are lower on re-rent contracts compared to traditional rentals.
Capstone is Focused on Growing the EaaS Business Model as Quickly as Possible Because it Provides Higher Margins, More Constant and Predictable Revenue Streams
EaaS Contract Growth Chart (Graphic: Business Wire)
This contract signifies continued EaaS business expansion due to ongoing customer demand and demonstrates progress on the Company’s vision to create smarter energy for a cleaner future and builds on its track record of saving its customers an estimated
“Capstone is seeing strong customer demand across industries for its EaaS long-term rental services, which had 7 MW under contract in
Capstone is focused on growing our EaaS business because it provides higher margins, more constant and predictable revenue streams, and allows for a more streamlined staffing model than a traditional industrial manufacturing company while helping customers manage capital costs and meet their environmental impact targets.
As part of this growth strategy, Capstone management has reduced operating costs and modified the operating model, all while continuing to expand its EaaS business. In order to keep up with demand, the company has turned to a “re-rent” strategy which allows the company to quickly accelerate the EaaS rental business model without using large amounts of new capital. A “re-rented” unit is taking an existing customer’s pre-owned microturbine unit that is not being utilized and deploying it into our growing EaaS customer base. By leveraging this unique re-rent strategy, we have created an additional revenue stream for both our Distributors and Capstone, all while continuing to save customers money on their energy needs. Of the 35 MW of contracts noted above, approximately 21 MW of contracts are being fulfilled by units from our internal rental fleet, and the remaining contracts will be fulfilled through re-rents.
“The re-rent model we have recently implemented allows us to continue the high growth rate of the EaaS business without the need for investing additional capital. The margin rates are lower on a re-rent basis than our traditional rental model, but we have the option to purchase the re-rented microturbine-based system in the future in most cases when the company has higher free cash flows,” concluded
About
For customers with limited capital or short-term needs, Capstone offers rental systems; for more information, contact: rentals@CGRNenergy.com. To date, Capstone has shipped over 10,000 units to 83 countries and estimates that, in FY21, it saved customers over
For more information about the Company, please visit: www.CapstoneGreenEnergy.com. Follow
Cautionary Note Regarding Forward-Looking Statements
This release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements regarding expectations for green initiatives and execution on the Company's growth strategy and other statements regarding the Company's expectations, beliefs, plans, intentions, and strategies. The Company has tried to identify these forward-looking statements by using words such as "expect," "anticipate," "believe," "could," "should," "estimate," "intend," "may," "will," "plan," "goal" and similar terms and phrases, but such words, terms and phrases are not the exclusive means of identifying such statements. Actual results, performance and achievements could differ materially from those expressed in, or implied by, these forward-looking statements due to a variety of risks, uncertainties and other factors, including, but not limited to, the following: the ongoing effects of the COVID-19 pandemic; the availability of credit and compliance with the agreements governing the Company's indebtedness; the Company's ability to develop new products and enhance existing products; product quality issues, including the adequacy of reserves therefor and warranty cost exposure; intense competition; financial performance of the oil and natural gas industry and other general business, industry and economic conditions; the Company's ability to adequately protect its intellectual property rights; and the impact of pending or threatened litigation. For a detailed discussion of factors that could affect the Company's future operating results, please see the Company's filings with the
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