The Numbers Game in Commercial Solar: $UGE.V $UGEIF

Nick Blitterswyk, co-founder & CEO of UGE International Ltd. (TSX.V: UGE  OTC: UGEIF), provided a little solar market background to catch me up on the impetus behind the creation of this cleantech, commercial solar company. When cleantech was really, really hot, in 2007 and 2008, generalist investors piled into solar’s tech boom, but the markets missed out on another offshoot of the business. The deployment of the solar tech. (Cough cough, remind you of fibre optics fan favourite, Lite Access LTE.V?). UGE is now leading the market in providing affordable, sustainable and reliable electricity to commercial and industrial customers.

UGE: Turnkey Commercial Solar LeaderThe Company started in 2008, and their mantra “Be Green, Be Great, Have Fun”, fuels their culture and rapid successes as they continue to focus on their core business of becoming a world leader in distributed renewable energy. 

With prices dropping steadily over the past decade, panel manufacturers might not be so happy, but the design, engineering, and deployment of a commercial solar system is a fine niche to be owning right about now. UGE provides the development, engineering, procurement and construction solutions to commercial solar clients. They own the customer relationship from start to finish. Bringing together a full customized solution, they offer access to the upfront capital investors, plus energy generation, storage, remote monitoring and control.

UGE Distributed SolarThe Company has offices in New York, Toronto, and the Philippines. Completed jobs and case studies span 100 countries. UGE provides renewable energy solutions to a global customer base. Dropbox, (Philly) Eagles Stadium, Ford, BMW, Hilton Worldwide, Verizon, Whole Foods, 1-800-Law-Firm, the Eiffel Tower, and Rise NYC are a few of their customers. Here is a link to their Corporate Profile which includes their project resume and plenty of case studies.

Fragmented Market Leaves Lots of Opportunity

The market that UGE is playing in is largely fragmented. The top three companies in the commercial solar space are Solar City, SunPower, and Borrego Solar Systems. These three corps control around 26% of the market with Solar City covering 10-15% of the market alone.

UGE Revenue Pie ChartBlitterswyk, a Fellow of the Society of Actuaries, founded UGE back in 2008 and he now stands at the head of a 30 person global team. He has confidence in the narrative right now, as the financials are looking strong. Q4 he’s calling the company’s “high water mark”. In other words, cash flow positive and profitable (we hope). They are considered market leaders in each of their target markets, with Canada their largest chunk of the revenue pie.

Share Structure

Share Issued and Outstanding 36,082,244
Last Price $0.415
52 Week Range $0.25-$0.51
Average Volume 48,239
Market Cap 14.97M

UGE Makes Scalable Sense

UGE AdvantageUGE delivers immediate savings to commercial businesses through cleaner electricity. Simple. They assist commercial and industrial clients to become more competitive by lowering the cost of distributed renewable energy. Awesome. This all makes sense to me as a retail investor. On a scale of small world problem to large world problem, this one falls on the side of solving a the large world problem. Energy.

UGE’s commercial value proposition is to lower the cost of your energy from 14 cents per kw hour to 10 cents a kw hour.

And one huge problem UGE solves along the way is the upfront capital costs that prohibit corporations, organizations, government facilities, you name it, from committing to the investment. The opportunity UGE saw was in stepping in to find investors looking to financially participate in the building of sensible, sustainable energy solutions. These investors are looking for a long term place to park their capital for approximately 10% IRR. And there are plenty of said investors out there, more investors than there are projects.

Derisking the capital investment creates a clear benefit that retail investors will understand. And UGE captures value along the entire project life cycle. They earn revenue to engineer and project manage the systems, but they also earn recurring revenues (magic to my ears) through ongoing operations and maintenance of their solar systems.


“The underlying economics of solar are extremely attractive,” commented Blitterswyk. He is clearly focused on driving this one ahead quickly, and you sense this when flipping through the powerpoint:

UGE’s financial goals: Reach annual run rate of $100m by end of 2018, immediate goals of $20 million annual revenue, $4million annual expenses, >20% gross margins, profitability.

Sounds like a clear set of goals stated by a couple of numbers guys. Year End is a coming any day now, and is that the profit bell a ringing? Q3 shows their elevator ride to cash flow positive territory.

Q3 (Sept 30 2016)

Highlights (in USD)
UGE Q3 2016 Financials

UGE Q3 Rev by Country

Screen Shot 2017-01-14 at 7.54.57 PM

Backlog, Champagne Problems

Dang, don’t you just hate it when all these million dollar contracts keep cluttering up your  desk all the time? Man. Paperwork. UGE Backlog

This company has a backlog of $36.4 million. This makes current revenues 5 X 2016 revenues (6 X 2015 revenues). Sounds pretty good for upcoming news flow. They now have “a stable base of revenue to plan around”, Blitterswyk commented. And they are profitable at these levels with this backlog, and much more I would hope, spread out over the next 12-18 months.


Incentivized Solar Industry

A new solar project was installed in the US every 2.5 minutes in 2014 according to the Solar Energy Industries Association (SEIA). As of March 2015, the Solar Energy Industries Association claims 645,000 U.S. homes and businesses have now gone solar since 2006. Installation costs dropped at that point by more than 73 percent., a website that focuses on the residential side of the business, put together this excellent and comprehensive post on the Cost of Solar Panels Over Time, noting that solar has never been so cost effective as it is right now. 

Worldwide, the economic shift is towards greener, more sustainable energy sources. And solar as an alternative energy could achieve the title of the world’s largest source of energy by 2050.

From Investing in Green Technology, the Future is Now: (2015) “Growth in green technology investment was largely driven by the solar boom taking place in Japan and China. Investments in renewables climbed to more than $270 billion, according to a report released by UNEP. The report indicated that solar power investments accounted for almost $150 billion…”

Average Electricity Rates USThe Ontario Power Authority created a Feed-in tariff in 2006 to work towards doing away with coal fired plants, diversifying the energy landscape. They had the “aim of increasing power production from renewable energy sources to approximately 10 to 15 percent of Ontario’s supply mix by 2018.”  Ontario was also home to the largest solar farm in the world (2010) until surpassed by farms in China and India.

New York also has a tax incentive program to bolster solar installations: “With tax credits you can save up to 25% if you get a system installed in New York State. If you own your system, you can save up to 47.5%.”

MIT also puts out a series on the Future of Energies, here at this link is the solar report: The Future of Solar Energy. From the study: “The main goal of U.S. solar policy should be to build the foundation for a massive scale-up of solar generation over the next few decades.”

Solar the Cheaper Energy SourceFor retail, it feels good to see investments aligning with society’s long term goals and government’s short term policies and incentives. Better to have the wind at your back! And only really in the last 18 months has solar crossed over to an affordable energy option with mass market potential. Solar is now cheaper than the grid in all of UGE’s target markets! Cheaper! 

According to a recent report by GTM Research:

“After a tumultuous few years with little to no national capacity growth, the U.S. commercial solar market is expected to rebound and nearly triple in size by 2020. This growth will be driven by the extension of the federal Investment Tax Credit, the growing adoption of solar among national corporations, the increasing availability of financing for small commercial systems, and an expanding market for community solar.”

Nicole Litvak- GTM Research
U.S. Commercial Solar Landscape 2016-2020- GTM Research

Capable and Driven Team

The Executive Team is headed up by aforementioned Nick Blitterswyk and his partner Jimmy Vaipoulos. More on them here:

Nick Blitterswyk
Nick Blitterswyk

Nick Blitterswyk is the Chief Executive Officer and co-founder of UGE. Nick is a graduate of the University of Calgary and recent winner of its Graduate of the Last Decade award. He has held positions at JPMorgan Chase & Co. and American International Group, Inc. (AIG) while becoming a Fellow of the Society of Actuaries. He then went on to found UGE which he has grown from inception to becoming a world leader in the distributed solar space. Nicolas is a frequent speaker on TV and conferences on matters related to distributed solar, renewable energy, and international business, including working in China.

Mr. Vaipoulos, CFO, also has a strong accounting background:

Jimmy Vaiopoulos
Jimmy Vaiopoulos

Jimmy Vaiopoulos is the CFO of UGE. Jimmy was born and raised in Toronto, Canada and before joining UGE as the CFO, Jimmy worked at KPMG in both audit and advisory practices with a focus on energy and infrastructure markets. While working with KPMG, Jimmy was able to work with small renewable independent power producers to utility scale solar projects in different parts of The Americas. In the energy industry, Jimmy worked in audit, project finance and M&A where he was involved with transactions ranging from $50 million to $3+ billion. Jimmy then went on to KPMG’s Santiago office in Chile where he worked and lived for a year while learning Spanish. When he’s not in the office, he loves to travel, play sports and play music.

It is not surprising to see this company clicking along nicely with the team they have built.

Solar Plus Storage is the Backbone of UGE

Global Horizontal Irradiation (GHI) North AmericaAnother example of the work they do, UGE announced on November 15, 2016 that they will be deploying solar-powered microgrid systems at 17 small businesses across New York city. For each site, UGE will manage the project development and engineering work, with project construction slated to begin sometime in 2017.

UGE’s project manager, Gabriela Suriano, commented “Solar plus storage will be the backbone of our energy system, now and in the years to come. In these areas, the availability of low-cost energy generation with advanced battery storage offers a critical lifeline in the face of another extreme weather event. We are excited to be doing such important work for New York.”


We will call this the BNN turning point of a stock, with many more catalysts possible in the coming 1-2 year horizon. As for Blitterswyk, he is tending to his big shareholders during what he calls an inflection point for the industry. UGE International is a Venture listed cleantech company to watch out for over the next day, month, year. Millennials will love this one. Young, vibrant and a ripening microcap, watch for $UGE.V to shine folks!


Turks and Caicos Islands | 35 kW rooftop grid-tied solar system | UGE Partner: Urban Green Environmental
Turks and Caicos Islands | 35 kW rooftop grid-tied solar system | UGE Partner: Urban Green Environmental


This is not in any way investment advice or any sort of stock recommendation. Please do your own due diligence and talk to a qualified investment advisor.

The contents of this article are for informational purposes only.  Nothing in this article, in any way whatsoever, should be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy, hold or sell any security. Note the inherent risks when investing in microcap stocks.

UGE International Ltd. is a client to an arm’s length party to one of the owners of One of the Stock Syndicate owners does own shares in UGE International Ltd., with no plans to sell over the next 60 days.

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