Environmental Journal Market Watch

At Legend Power Systems, we are always looking for ways to stay at the forefront of the green economy. That’s why we’re excited to share this article from Environment Journal, which highlights the latest trends in rate cuts and incentives designed to support sustainable business practices. As a company dedicated to improving energy management and power quality in commercial buildings, we believe that these developments will play a crucial role in shaping the future of our industry. We invite you to read the full article to learn more about the opportunities and challenges ahead in the green economy.

Market Watch: Innovative energy management to support the green economy

By Environment Journal – August 15, 2024

General Market Commentary

The Bank of Canada once again cut its key interest rate on June 24, 2024, now landing at 4.25%, as the Bank continues its policy of balance sheet normalization. While inflation is still above central bank targets in most advanced economies, economists are forecasting it to ease gradually.
In other news, the Government of Canada is taking action to support the green economy and decrease energy costs for Canadians through several funding mechanisms, such as the $1.5 billion Green and Inclusive Community Building Program and the Canada Greener Homes Affordability Program, an $800-million retrofit program. For further information, click here.

Hot Sector News:

This month we’re putting the spotlight on Legend Power® Systems (TSX-V: LPS), a global leader in commercial electrical system solutions. The Vancouver, B.C.-based company provides an intelligent energy management platform that analyzes and addresses building energy challenges, improving asset management and corporate performance.

LPS recently received its largest commitment in the company’s history; a Letter of Intent (LOI) to Award 10 SmartGATE system purchases for a major United States Department of Defense (US DoD) facility, a single deal worth just shy of $3 million.

“This large facility has experienced significant premature failures in core systems like HVAC, refrigeration, life and safety systems, due to the highly volatile power provided to the facilities, which is mainly driven by low inertia power from wind and solar solutions previously deployed,” said Mike Cioce, Vice President of Sales and Marketing for Legend Power Systems. “We have been educating the market for years on the grid volatility associated with increases in renewable power generation and we now see the US DoD validating this with a large-scale deployment to protect critical infrastructure.”

According to Randy Buchamer, CEO of Legend Power Systems, “We believe this to be the beginning of a larger opportunity within the DoD and we are already in the process of evaluating other buildings at this facility as well as in other locations. We are now actively working with the U.S federal government, the DoD and the City of New York, as well as commercial real estate operators on current and future opportunities.”

We also engaged Sean Peasgood, Investor Relations, LPS, to provide some additional insight into the company’s plans for the future.

What would you say is the value proposition for investors and prospective investors of LPS?

Legend Power Systems is strategically positioned to be a key player in the global decarbonization movement, which is projected to create a $40 trillion to $90 trillion opportunity over the next 20-30 years. Our solution addresses a critical gap: the mismatch between the high-quality power demanded by modern buildings and the lower quality power often supplied by a low-carbon electric grid. This pressing need has led to significant agreements with major entities like the City of New York, the U.S. Department of Defense, and the U.S. Federal Government’s General Services Administration. Each of these partnerships has the potential to be transformative for the company. When combined with our growing success in the $10 billion to $15 billion annual U.S. Energy Services Company (ESCO) Performance Contracts market, the private commercial real estate sector, and other areas, Legend Power Systems is on track to tap into a market potential exceeding one million buildings in North America alone.

The company recently received its largest order so far, from a U.S. Department of Defense facility. What has been your largest project to date in Canada?

Over the past few years, we have secured significant orders ranging from $1 million to $1.5 million across various sectors in Canada. These include commercial real estate, multifamily residential, big box retail, and education/municipalities. Many leaders in these verticals are committed to reducing carbon emissions, and the SmartGATE solution from Legend Power Systems has become an essential component in their low-carbon strategies across diverse industries.

What do you estimate to be the size of the asset management market in Canada, and how are industrial sustainability trends impacting the company’s potential?

The addressable market for Legend Power Systems in North America exceeds over one million buildings that could potentially benefit from our solutions. As the push to decarbonize continues, with increasing reliance on renewable energy sources, the demand for our technology to bridge the gap between high tech energy efficient buildings and a volatile low greenhouse gas emissions grid is expected to grow significantly. These industrial sustainability trends are expanding opportunities for us across virtually every building sector in North America, reinforcing the potential for our solutions to play a crucial role in the future of energy management.

How do you see federal policy supporting or impeding the success of Legend Power Systems in Canada and abroad?

Federal policies in Canada and abroad are strongly supporting the decarbonization efforts on both the supply side (electric grid) and demand side (buildings and facilities). These policies are driving the replacement of older systems with high-tech, energy-efficient alternatives and the transition away from traditional fossil fuel systems for transportation, heating, and more. As electricity demand rises due to these changes, many leaders are turning to wind, solar, and batteries to meet this demand, which in turn increases grid volatility. This growing volatility creates a heightened need for higher quality power, further boosting the demand for Legend Power Systems’ solutions.

Any other comments to share with our readers working in the environment sector?

For investors in the environmental sector, key considerations include market demand, technological innovation, scalability and adoption, competitive landscape, and financial performance. The demand for active power management is crucial in the transition to low or no-carbon energy systems. Between energy savings, GHG reductions, resiliency gains, maintenance savings and increased life expectancy of critical building systems, the SmartGATE is the right solution. Legend Power Systems’ SmartGATE platform stands out as an unparalleled innovation, poised to become the central intelligence of the electrical room for years to come. The company’s growth is just beginning and is expected to continue for the foreseeable future, with a world-class ability to meet rising demand. With no direct competition and a decade of proven success, the barriers to entry for potential competitors are extremely high. Coupled with a leadership team focused on driving success and profitability, Legend Power Systems represents a strong long-term buy-and-hold opportunity.

Today, the trading price of LPS is $0.25.

Stocks to Watch

Here is a list of Canadian cleantech stocks that we are monitoring for this column. This list of public companies is by no means complete, and we are open to suggestions from our advisors and readers.

 

*The authors of this column own equity. It is not meant to be an endorsement, but simply a statement of this fact.