Capstone Green Energy Holdings, Inc. (Capstone) is a provider of customized microgrid solutions, on-site resilient green Energy-as-a-Service (‘EaaS’) solutions and on-site energy technology systems focused on helping customers around the globe solve the ‘Energy Trilemma’ of resiliency, sustainability, and affordability.
The company offers customers a range of commercial, industrial and utility scale options tailored to their specific needs ranging from 65 kilowatts (‘kW’) to multiple megawatts...
Capstone Green Energy Holdings, Inc. (Capstone) is a provider of customized microgrid solutions, on-site resilient green Energy-as-a-Service (‘EaaS’) solutions and on-site energy technology systems focused on helping customers around the globe solve the ‘Energy Trilemma’ of resiliency, sustainability, and affordability.
The company offers customers a range of commercial, industrial and utility scale options tailored to their specific needs ranging from 65 kilowatts (‘kW’) to multiple megawatts (‘MW’). Capstone’s product portfolio not only showcases the company’s core microturbine technology but also includes flexible EaaS rental and service contracts. Through the company’s EaaS business line, the company offers build, own, operate and maintain (‘BOOM’) solutions, as well as energy rental solutions utilizing its microturbine energy, comprehensive service contracts that cover planned and unplanned maintenance, and factory-certified aftermarket spare parts. In the company’s pursuit of cutting-edge solutions, the company has forged strategic partnerships to extend the company’s impact. Through these collaborations, the company offers biomass and heat recovery solutions that enhance the sustainability and efficiency of the company’s clients’ operations, contributing to a cleaner and more responsible energy landscape.
The company develops, manufactures, markets, sells and services microturbine-based technology solutions for use in stationary distributed power generation applications and distribution networks, including cogeneration (combined heat and power (‘CHP’), integrated combined heat and power (‘ICHP) and combined cooling, heat and power (‘CCHP’)), as well as renewable energy, natural resources, and critical power supply applications. Capstone microturbines allow customers to produce power on-site in parallel with the local electric grid or stand-alone when no local electric grid is available. Several technologies are used to provide ‘on-site power generation’ (also called ‘distributed generation’), such as reciprocating industrial engines (also known as internal combustion engines), solar photovoltaic power (‘PV’), wind turbines and fuel cells. Microturbines can be interconnected to other distributed energy resources to form ‘microgrids’ located within a specific geographic area and to provide power to a group of buildings. For customers that do not have access to the local electric utility grid, microturbines provide clean, on-site power with fewer scheduled maintenance intervals and greater fuel flexibility than competing technologies. For customers with access to the electric grid, microturbines provide an additional source of continuous, flexible, on-site power generation, thereby providing additional reliability and potential cost savings compared to the local utility. With the company’s stand-alone feature, customers can produce their own energy in the event of a utility power outage and can use microturbines as their primary source of power for extended periods of time unlike traditional diesel standby generator sets. Because the company’s microturbines also produce clean, usable heat energy, they provide economic advantages to customers that can benefit from the use of hot water, chilled water, air conditioning, steam and direct drying. In addition, the company’s microturbines have been used as battery charging generators for hybrid electric vehicles. The company’s microturbines are sold, installed and serviced primarily through the company’s global distribution network. Together with the company’s global distributors, the company offers new and remanufactured parts, as well as comprehensive Capstone factory protection plans through long-term service agreements. The company also offers its microturbines for rent through the company’s long-term rental program (which forms a part of its EaaS business).
The company offers Capstone microturbine energy systems designed for commercial, industrial, and onshore and offshore oil and gas applications with product offerings ranging from 65 kW to one MW in electric power output, which can be deployed in arrays of multiple MWs. The company’s microturbines combine patented air bearing technology, advanced combustion technology, sophisticated power electronics, and advanced software controls to form efficient and ultra-low emission electricity and cooling and heat production systems. Because of the company’s air bearing technology, the company’s microturbines do not require lube oil, grease, or traditional coolants. This means they do not require routine maintenance to change and dispose of lube oil, grease, or other liquid lubricants, as do the most common reciprocating engines, making them a cleaner and environmentally friendly option to alternative technologies.
The company also manufactures and supplies system controllers that provide complete automated system control, including electrical load following and custom logic to protect against expensive local utility demand charges. These controllers include the legacy Capstone Logic Controllers (CLC) and the Capstone C1000 system controllers.
The company’s microturbines can be fueled by various sources, including natural gas, propane, butane, various sour gases, and renewable fuels such as renewable natural gas, landfill gas, biogas or digester gas. The company’s microturbines are available with integrated unit mounted heat exchangers, making them easy to engineer and install in applications where hot water, chilled water, air conditioning or steam are desired. Alternative fuels, in particular hydrogen, are increasingly important and the company’s standard high pressure natural gas microturbine can reliably run on a 30% hydrogen / 70% natural gas mix. This is a promising milestone on the development roadmap to 100% hydrogen solutions.
The company’s microturbines are sold primarily through global distributors and Original Equipment Manufacturers (‘OEMs’). Distributors purchase the company’s products for sale to end users and also provide service, application engineering, and installation support. Distributors also provide a variety of additional services, including engineering, application, and air permit support services in which the microturbines will be used, installation support of the products at the end users’ sites, commissioning the installed applications and providing post-commissioning service, including a comprehensive factory protection plan (‘FPP’). The company’s distributors perform as independent value-added resellers. OEMs integrate the company’s products into their own product solutions.
Products
The company’s microturbines are compact, lightweight and environmentally friendly generators of electricity and heat compared to competing technologies. They operate on the same principle as a jet engine using a variety of commercially available fuels. For example, the company’s microturbines can operate on low British Thermal Unit (‘BTU’) gas, which is gas with lower energy content, and can also operate on gas with a high amount of sulfur, known in the industry as sour gas. Examples of these fuel sources include methane from facilities such as wastewater treatment plants, landfills and anaerobic digesters. The company’s microturbines’ multi-fuel capability provides competitive advantages with respect to some of the company’s selected vertical markets. The combustor system remains the same for all fuels except for the fuel injectors, which vary between liquid and multiple gaseous fuels.
The company’s microturbines incorporate four major design features: advanced combustion technology, patented air bearing technology, digital power electronics and proprietary remote monitoring systems.
The company’s advanced combustion technology allows its microturbines to achieve low emissions. The company’s natural gas fueled C65, C200, C600, C800 and C1000S series microturbines were certified by the California Air Resources Board (the ‘CARB’) as meeting its stringent 2007 emissions requirements—the same emissions standard used to certify fuel cells and the same emissions levels that a central power plant must satisfy. These low emission levels not only provide an environmentally friendly product, but also eliminate permitting requirements in several municipalities for continuously operated onsite power generation.
The company’s patented air bearing system allows the microturbine’s single moving assembly to produce power without the need for typical petroleum-based lubrication. Air bearings use a high-pressure field of air rather than petroleum lubricants. This improves reliability and reduces maintenance such as oil changes.
The company’s digital power electronics manage critical functions and monitor operations of the microturbine. The company’s electronic controls manage the microturbine’s speed, temperature and fuel flow and communication with external networks and building management systems. The digital power electronics coordinate with the grid when the units are operated in a grid connect mode and with the onboard battery when equipped for stand-alone mode. The digital power electronics also include the functionality of seamless transfer capabilities, ensuring the end-users’ critical loads do not experience any interruption to their operation in the event of a utility power outage. All control functions are performed digitally. Performance is optimized, resulting in low emissions, high reliability, and high efficiency over a variable power range.
The company’s proprietary Capstone Remote Monitoring Software allows end users to operate and manage the microturbine remotely. This remote capability can provide end users with power generation flexibility and cost savings.
The company’s electronic controls manage microturbines using the company’s proprietary software and advanced algorithms. The controls start the turbogenerator and manage its load, coordinate the functioning of the microturbine with the grid, manage the speed, fuel flow and exhaust temperature of the microturbine, convert the variable frequency, and provide digital communications to externally maintain and control the equipment.
The electrical output of the company’s units can be paralleled in multiple unit configurations through the company’s system controllers and a digital communications cable to serve larger installations requiring electrical loads of multiple MWs. The company’s products can operate connected to the electric utility grid as a current source, on a stand-alone basis as a voltage source, multipacked to support larger loads as a ‘virtual single’ unit and in dual mode, where the microturbine operates connected to the electric utility grid or operates independently.
The company’s 65 kW (‘C65’), as well as the company’s 200 kW (‘C200’) and 400 kW, 600 kW, 800 kW and 1000 kW (‘C1000S Series’) grid connect and stand-alone microturbines are listed by Underwriters Laboratories (‘UL’) as meeting the UL 2200 stationary engine generator standards and the UL 1741SA utility interconnection requirements. The company is in the process of completing the certification for UL 1741SB.
The company’s C65 microturbine is certified by the California Energy Commission (the ‘CEC’) to comply with the requirements of the CEC’s ‘Rule 21’ grid interconnection standard. This standard streamlines the process for connecting distributed generation systems to the grid in California. The benefits of achieving this standard include avoiding both costly external equipment procurement requirements and extensive site by site and utility by utility analysis. The company’s protective relay functionality has also been recognized by the State of New York, which allows the company’s microturbines to be connected to New York’s electric utility grid.
The company offers various accessories for its products, including rotary gas compressors with digital controls, integrated heat recovery modules for CHP applications, dual mode controllers that allow automatic transition between grid connect and stand-alone modes, batteries with digital controls for stand-alone or dual mode operations, system controllers for large multipack installations, protocol converters for Internet access, packaging options and miscellaneous parts such as frames, exhaust ducting, backflow dampers and installation hardware.
Power Generation Applications
The company’s C65 microturbine can produce enough heat to provide hot water to a 100-room hotel while also providing about one third of its electrical requirements. The company’s C200 microturbine is well suited for larger hotels, offices, commercial and industrial buildings, and wastewater treatment plants, among others. By packaging the C200 microturbine power modules into single enclosures which are available in multiple sizes and are built in similar dimensions to a standard shipping container, the company has created an upgradable family of microturbine offerings from 400 kW up to 1000 kW, or 1 MW, in a compact footprint engineered to function as a single source of power. The company’s C1000S Series microturbines are well suited for utility substations, larger commercial and industrial facilities and remote oil and gas applications. The company’s 600 kW and 800 kW systems can be shipped in a five-bay configuration which allows the end-use customer to add one to two more 200 kW microturbines in the future to increase their total on-site power production from 600 kW to 1000 kW without any change to the existing site footprint, as the customer’s business power demands expand over time.
Stationary power generation applications can vary greatly depending on load size and demand location. From small 2 kW back-up generators to several large 1,000 MW central generating facilities, stationary power systems can offer superior fuel efficiency for the customer while also meeting strict emissions regulations. Historically, power generation in developed countries such as the United States has been part of a regulated utility system. However, a number of developments related primarily to the deregulation of the utility industry as well as significant technological advances have helped to broaden the range of power supply options available to interested parties.
The company’s full line of microturbine energy solutions target multiple vertical markets worldwide, including energy efficiency, natural resources, renewable energy, critical power supply, microgrid and transportation products. Within these vertical markets, the company focuses on applications that have the greatest near-term potential for the customer based on various factors such as energy load demand, available fuels, economic payback, and for some, government incentives. The critical power supply, microgrid and transportation product verticals do not generate significant revenues for the company; however, it has experienced continued development in these verticals and remain focused on the development of applications in these verticals. The company also targets smaller sub segments that fall within these vertical markets that may not otherwise be considered for on-site generation.
Energy Efficiency—CHP/CCHP
Energy efficiency refers to the proper utilization of both electrical and thermal energies in the power production process. In such applications, the company’s microturbines are able to maximize the availability of usable energy to provide a significant economic advantage to the company’s customers while reducing their on-site emissions. CHP and CCHP can improve site economics by capturing the waste heat created from a single combustion process to increase the efficiency of the total system, from approximately 30% to approximately 85% for hot water and chilled water to as much as 90% or more for some steam and direct drying applications. Compared with more traditional, independent generation sources, the increase in operational efficiency also reduces greenhouse gas emissions through the displacement of other separate systems, which can also reduce operating costs and industrial waste.
When compared to on-site boilers, microturbines generally produce fewer commonly found air pollutants (‘criteria pollutants’), such as nitrogen oxides (‘NOx’), carbon monoxide (‘CO’) and volatile organic compounds (‘VOCs’). In fact, the company’s CHP or CCHP system can displace local boiler emissions altogether. A high efficiency CHP or CCHP system can allow for reduced net utility costs for end users, as well as improved fuel consumption. The most common uses for captured thermal energy include space heating and air conditioning, water heating and water chilling, direct-drying and steam for industrial applications. In CCHP applications, the microturbine exhaust drives an absorption chiller, which produces the chilled water necessary for air conditioning and local use. Organizations of all sizes have used the heat generated by the company’s microturbines at the many different types of commercial and industrial applications they serve, including hotels and resorts, hospitals, and medical centers, as well as office buildings and large retail facilities.
During the year ended March 31, 2024 (Fiscal 2024), the company continued to develop its new hydrogen products. The company is continuing its research and development partnership with Argonne National Laboratory and utilizing their high-performance computing with AI technology; and is optimizing higher hydrogen blend configurations, with the goal of creating a 100% hydrogen microturbine. Argonne National Laboratory is a national science and technology research laboratory operated by the University of Chicago Argonne, LLC for the United States Department of Energy.
Natural Resources—Crude Oil, Natural Gas, Shale Gas & Mining
The company’s microturbines are installed in the natural resource market for use in both onshore and offshore applications, including exploration, production, compression, and transmission sites, as a highly efficient and reliable source of prime power. In some cases, these oil and gas or mining operations have no access to an electric utility grid and rely solely on power generated on-site. There are numerous locations, on a global scale, where the drilling, production, compression and transportation of oil and gas and other extraction and production processes create fuel byproducts, which are traditionally burned or released into the atmosphere. The company’s microturbines can turn these fuel byproducts, flare gas, or associated gas, into a useable fuel to provide prime power to these sites.
The addressable market for the company’s microturbines in the United States shale reserves industry is significant. The shale gas market for microturbines may grow as demand for natural gas continues to rise in the U.S. as the Environmental Protection Agency (‘EPA’), the Department of the Interior and other federal and state agencies work to reduce the emission of hazardous air pollutants associated with natural gas development, including limitations on the flaring of excess gases. The company’s product sales in the natural resources market are driven by the company’s microturbines’ reliability, emissions profile and ease of installation. However, any growth in the oil and gas sector within the company’s natural resources market is primarily driven by oil prices.
The C65 and C200 microturbines can be configured to meet Class 1 Zone 2 hazardous location requirements for the natural resources market. Hazardous location requirements are met through third-party package ventilation changes for purging and pressurizing package air to avoid potential flammable mixtures as well as controls for emergency disconnect of fuel and electrical sources. The package can also be upgraded to stainless steel construction to withstand the often-corrosive offshore environments where these units are installed. Oil and gas customers often prefer power generation systems that offer low maintenance and high reliability in order to ensure continued production.
Renewable Energy
There is a growing transition to renewable energy sources and technologies on a global scale. The company’s microturbines run efficiently on renewable fuels such as methane and other biogases from landfills, wastewater treatment facilities and renewable natural gas. They also run efficiently on other small biogas applications like food processing plants, livestock farms and agricultural green waste operations. Microturbines can burn these renewable fuels with minimal emissions, thereby, and in some cases, avoiding the imposition of penalties incurred for pollution while simultaneously producing electricity from this ‘free’ renewable fuel source for use at the site or in the surrounding areas. The company’s microturbines have demonstrated effectiveness in these smaller applications and may outperform conventional combustion engines in some situations, including when the gas contains a high amount of sulfur, as the sulfur can contaminate combustion engines’ lube oil leading to equipment breakdowns and higher lifecycle costs.
The company offers C65 and C200 stand-alone digester gas-fueled products to the renewable energy market segment. With these products, the company can target many different types of renewable energy applications, including biogas producing facilities in third world countries and in remote locations that offer a valuable fuel source for the generation of electricity. The performance of the company’s C65 digester gas system has been routinely evaluated to ensure that the combustion system is stable from zero to 100 percent power output. Minor controls changes have been implemented to increase stability at low power levels. The ability to convert this low BTU fuel to electricity, along with the high reliability and low maintenance features of this product, make it well suited for this market segment.
Critical Power Supply
Because of the potentially catastrophic consequences of system failure, momentary or otherwise, certain high - demand power users, including high technology, health care and information systems facilities, require higher levels of reliability in their power generation service. The majority of microturbine-based distributed generation installations have powered through hurricanes with little or no downtime. To meet these customer requirements, traditional solutions utilize Uninterruptible Power Supplies (‘UPS’) to protect critical loads from power disturbances along with back-up diesel generators for extended outages. The company offers an alternative solution where the company’s microturbines can also be installed along with a rotary UPS to provide a complete line interactive continuous power solution. In this case, the microturbines remain in grid connect mode while the rotary UPS stabilizes the utility voltage and provides a seamless transfer from operation connected to the grid to operation isolated from the grid.
Microgrid
A microgrid is a group of interconnected loads and distributed energy resources that acts as a single controllable energy entity with respect to the grid. Distributed energy resources typically include other dual-mode microturbines, reciprocating engines, PV, wind turbines, fuel cells and battery storage. Microgrids can be connected to larger electricity grids; however, in the event of a widespread outage, the microgrid will disconnect from the main grid and continue to operate independently to maintain the electricity supply to the homes and businesses that are connected to the microgrid’s electricity network. The company’s microturbines have the ability to meet the needs of microgrid end-users by lowering their overall cost to operate and by providing a versatile dispatchable technology that is fuel flexible and scalable enough to fit a wide variety of applications. The company’s distribution partners have also paired its microturbines with battery storage and EV chargers to offer vehicle charging solutions.
Additionally, the company has its own programmable logic control system and sensors, which interface with other building automation systems and are a key aspect of monitoring a microgrid. The use of microgrids to serve local loads helps to reduce energy losses in transmission and distribution, further increasing the efficiency of the microgrid. The company has been a part of numerous successful microgrid installations worldwide ranging from a wind turbine manufacturer, ski resort, university, industrial farm, utility software company, brewery and electrical distribution utility. The company’s microturbines’ functionality is to ensure energy availability for advanced microgrids before and during disasters, such as hurricanes. They may also help reduce electrical expenditures in the years following a disaster when electric utility rates may be increased to pay for the expenses for grid infrastructure repairs and improvements associated with these disasters.
Transportation
The company’s technology can also be used to support Electric Vehicle (‘EV’) market by providing power solutions to charge vehicles. The company’s products can fill a void in the EV market for vehicle charging capacity and charging convenience. The company’s customers have applied its products in EV applications for fleets and remote location charging stations. The company is continuing to pursue global EV charging opportunities to fill the demand for power in this market segment.
Sales and Marketing
The company primarily sells and markets its microturbine products, parts, rentals and services through the company’s global network of authorized Capstone distributors and OEMs.
The company’s Sales and Marketing team operates as one organization. The company’s team is focused on developing and managing its existing worldwide distribution channel, growing the company’s long-term rental fleet, and leading all marketing and advertising activities as the company continues building it into a strong and recognizable worldwide brand. The company continues to fulfill rental contracts by renting unused equipment previously sold to the company’s customers and then re-renting them to its customers and selling rental assets to build additional capital to continue to refresh and grow the rental fleet. The company’s existing global distribution network remains the company’s worldwide feet-on-the-ground and its local presence.
The company’s worldwide Capstone authorized distribution network was developed from the ground up and has become a valuable asset, because the company can reach end use customers globally. Each of the company’s distributors is a strategically placed independent partner that markets, sells, and provides applications engineering support for the company’s products on its behalf. In addition, distributors provide remote monitoring services, warranty support, local spare parts support, customer training and long-term service support. Through the company’s global distribution network, the company offers a comprehensive FPP for a fixed fee to perform regularly scheduled and unscheduled maintenance as needed. The company provides factory and on-site training to certify all personnel that perform sales, applications, commissioning, and long-term service on the company’s microturbines. Individuals who are certified are called Authorized Service Providers and must be employed by a distributor or an end user in order to perform work pursuant to an FPP. The company offers to assist customers by reviewing their installation designs in relation to the technical requirements for proper operation of its products, such as electrical interconnections, load requirements, fuel type and pressure, cooling air flow and turbine exhaust routing. As part of the microturbine commissioning process, the company also receives a checklist to confirm that the final installation adheres to the company’s technical requirements before the company accepts its standard manufacturer warranty obligations. The company’s typical terms of sale include shipment of the products with title, care, custody, and control transferring at its dock, payment terms ranging from full payment in advance of shipment to payment in 90 days, and warranty periods of approximately 12 to 24 months from shipment depending on the product type. The company typically does not have customer acceptance provisions in the company’s agreements.
The Distributor Support System (‘DSS program’) provides additional support for distributor business development activities, customer lead generation, brand awareness and tailored marketing services for each of the company’s major geographic and market verticals. This program is funded by the distributors and was developed to provide improved worldwide distributor training, access to online documentation and technical publications, paperless service software, sales efficiency, website development, company branding and funding for increased strategic business-to-business (B2B) marketing activities. The DSS program is owned and operated by Capstone Distributor Support Services Corporation (CDSSC), related party, for the company under a Services Agreement.
Geographic Markets
The United States and Canada
The company has distribution agreements with several companies throughout North America for the resale of the company’s products. Many of these distributors serve multiple markets in their select geographic regions. The primary markets served in this region have been energy efficiency, renewable energy, natural resources, and EV charging products. The energy efficiency and natural resources vertical markets are expected to grow as a result of an increased domestic production of hydrocarbons, the low downstream price of natural gas, utility grid shortages due to rising electrification and EV charging demands, as well as public and regulatory acceptance and promotion of distributed generation.
In developing the company’s sales opportunities, the company has identified the need to address various requirements present in the company’s target localities. These requirements include electric grid interconnection standards, gas utility connection requirements, emissions standards, building and fire safety codes and various inspections and approvals. The costs and scheduling ramifications of these various approvals, in conjunction with normal bidding process requirements and construction delays, can be significant to the completion of an installation. The company’s intention is to work with the applicable regulating entities to establish compliant standards for the installation of the company’s microturbines so that costs and installation timelines are minimized for its customers.
Latin America
The company’s target markets in Latin America are energy efficiency, renewable energy, and natural resources. Oil and gas production projects continue to be a growing market in Latin America and there is a high degree of interest in EaaS options.
Energy reform in Mexico, for example, has opened new market opportunities for the company by allowing competition among multiple players and enabling power generation companies to sell directly to consumers instead of only to the state-owned Federal Electricity Commission. Near-shoring of industrial manufacturing, grid power shortages and low cost natural gas also drive interest in distributed generation solutions. The company’s strategy is to leverage its distribution network in Mexico across various market verticals.
South America constitutes a diverse group of markets that vary greatly in potential capture for the company based on several factors, including the availability of oil and gas production and transmission, energy pricing and political and investment climate. The success of existing solutions in Colombia and a more recent initial long-term rental solution in the developing natural resources market in Argentina have driven interest in the company’s solutions in numerous regional markets where government and corporate leaders are seeking to reduce flaring, increase efficiency and lower costs.
Asia and Australia
The company’s target markets in Asia and Australia are energy efficiency, renewable energy, and natural resources. The company’s historical sales in Southeast Asia and Australia have primarily been in the energy efficiency and the oil and gas markets. Other areas in Asia and the Pacific Rim offer attractive opportunities as well. Industrial manufacturing growth in Southeast Asia serving European and North American markets must adapt to new carbon-based regulations such as the EU’s Carbon Border Adjustment Mechanism and public company green procurement policies that drive demand for energy efficiency and renewable solutions.
The Middle East and Africa
The company’s target market in the Middle East and Africa is primarily oil and gas. This includes flare gas to power projects which are a particularly attractive market opportunity given the volume of gas being flared and the need for stable power in the region. The company has targeted distributors and customers involved in the capture and use of flare gas in the oil and gas market. However, the geopolitical environment in parts of this region is still volatile, which can have an impact on the company’s sales. The company is not impacted by the conflict in Israel/Gaza.
Europe
To address the European market, the company is strengthening its relationships with existing and new distributors. The company has upgraded its Integrated Remanufacturing Facility in the United Kingdom to make new and remanufactured parts readily available to the company’s distributors. Europe has a history of extensive use of distributed generation technologies. The company is also seeing a resurgence in oil and gas drilling in Europe to address the fuel shortage on the continent following the destruction of the Nord Steam gas pipeline. Following Russia’s military invasion of Ukraine in February 2022, the company re-evaluated its efforts in the Russian and the surrounding Commonwealth of Independent States (‘CIS’) markets and have ceased exploring growth opportunities in sanctioned markets. There are opportunities in Kazakhstan and Uzbekistan where oil and gas development continues. The company does, however, continues to evaluate customer orders and ensure that the company is in compliance with all laws and regulations upon acceptance and before shipment. Due to the ongoing conflict between Russia and Ukraine, and the resulting economic impacts to the European and Russia region, revenue in the region was negatively impacted in Fiscal 2024.
Customers
Sales to Cal Microturbine and E-Finity Distributed Generation, LLC (‘E-Finity’), two of the company’s domestic distributors, accounted for 16% and 13%, respectively, of the company’s revenue for Fiscal 2024. Additionally, Supernova Energy Services SAS (‘Supernova’), one of the company’s international distributors, and Capstone Engineered Solutions (‘CES’), one of the company’s domestic distributors, accounted for 14% and 11%, respectively, of net accounts receivable as of March 31, 2024, respectively.
Competition
The company competes with other companies that offer microturbine products, including FlexEnergy and Ansaldo Energia S.p.A. (which manufactures the Turbec microturbine).
Governmental and Regulatory Impact
The company has systems installed in approximately 73 countries around the world.
The company’s microturbine solutions, as manufactured products, meet the U.S. Department of Treasury and Internal Revenue Service regulations to qualify for the domestic content bonus credit of 10% for the ITC.
The company’s strategy is to identify primary and secondary sources for critical components, both domestic and international, for when available to minimize production line down time due to unavailability of such parts, which could affect the company’s ability to meet manufacturing schedules on build or a linear basis.
The company owns two patents related to fuel injection and emissions. The first patent issued is for a multi-staged lean pre-vaporizing, pre-mixing fuel injector providing ultra-low emissions that meet EPA Tier 4 requirements for power generation. Under this program, exhaust emissions from these engines will be required to decrease by more than 90%. The second patent is for a multiple-fuel capable, pre-mixed, low emission injector for high flame speed fuel combustion. This patent is the foundation for continued development in achieving high reliability and performance with hydrogen content fuels.
During Fiscal 2024, the company continued to partner with Argonne National Laboratory and the University of California, Irvine (‘UCI’) on the development of hydrogen-based technologies to support the transition away from carbon-based fuels. The company began a new cooperative research and development agreement with Argonne National Laboratory to perform design and manufacturability optimization of the company’s fuel flexible microturbine system ranging from 70% natural gas/30% hydrogen blends to 100% hydrogen fuel operation using computational fluid dynamics, high performance computing, and machine learning.
The company intends to perform demonstration tests on a C200 system during Fiscal 2025.
Intellectual Property Rights and Patents
The company has 10 U.S. active patents. The patents the company has obtained will expire between calendar years 2024 and 2037.
Research and Development (R&D)
For the year ended March 31, 2024, the company’s R&D expenses were $2.5 million.
History
The company was founded in 1988 in the state of California and was reincorporated in 2000 in the state of Delaware. It was formerly known as Capstone Turbine Corporation and changed its name to Capstone Green Energy Corporation in 2021.
The Analyst Price Target shows the analysts’ low, high, and average target at a glance.
