Ameresco Stock

Ameresco, Inc. (Ameresco) operates as a clean technology integrator and renewable energy asset developer, owner, and operator. The company’s comprehensive portfolio includes energy efficiency, infrastructure upgrades, asset sustainability, and renewable energy solutions.

The company’s core offerings include the development, design, arrangement of financing, construction, and installation of solutions that deliver measurable cost and energy savings while enhancing the operations, energy security, infrastructure, and resiliency of a facility. These solutions range from upgrades to a facility’s energy infrastructure to the development, construction, and operation of renewable energy plants.

The company’s product independence coupled with its deep technical bench allows the company to integrate advanced technology solutions for the unique needs of each customer. The company develops these tailored energy projects for federal, state, and local governments, educational and healthcare institutions, airports, public housing authorities, commercial/industrial customers, transportation and infrastructure, and utilities across the United States, Canada, and Europe.

In addition to organic growth, strategic acquisitions of complementary businesses and assets, and entering into joint venture arrangements has been, and continues to be an important component to the company’s growth strategy. These strategies enable the company to broaden its service offerings and expand the company’s geographical reach.

To best serve the company’s expansive customer base, as of December 31, 2023, the company had approximately 60 offices located throughout North America, and Europe and more than 1,500 dedicated energy and business professionals with years of proven experience and a strong commitment to customer satisfaction. The company offers its customers the resources needed to successfully plan, finance, execute and operate energy programs to create sustained economic and operating benefits to fulfill their unique requirements.

Services

The company’s portfolio of service and product offerings aim to create value and provide energy efficient and renewable solutions to the organizations the company serves in the pursuit of a sustainable future.

Energy Efficiency Measures & Upgrades: Water management, efficiency and reclamation; renewable energy, storage & microgrids; heating, ventilation, cooling, building envelope; smart metering and controls; and chillers and boilers.

Energy Infrastructure: Smart building modernization and retrofits; design-build new construction; utilize a full range of technologies related to building systems, facility infrastructure, energy- and water-consuming systems; and integrated project design and implementation.

Renewable Energy, Storage & Microgrids: Solar photovoltaic (‘PV’); combined heat and power (‘CHP’) and co-generation plants; geothermal; renewable natural gas (‘RNG’); wind power; microgrid; battery storage; EV charging infrastructure; and hydrogen.

Energy Analytics & Supply: Enterprise energy management services; proprietary asset management software; and energy procurement services.

Operations & Maintenance (‘O&M’): End-to-end technical guidance; and skilled technicians to operate and maintain renewable energy systems.

The company’s core services are the development, design, engineering, and installation of projects designed to reduce the energy and O&M costs of the company’s customers’ facilities. These projects generally include a variety of measures that incorporate innovative technology and techniques, customized for the facility and designed to improve the efficiency of major building systems, such as heating, ventilation, cooling and lighting systems, while enhancing the comfort and usability of the buildings.

The company also offers the ability to incorporate analytical tools designed to provide improved building energy management capabilities and enable customers to identify opportunities for energy cost savings. The company typically commits to customers that its energy efficiency projects will satisfy agreed upon performance standards upon installation or achieve specified increases in energy efficiency. In many cases, the company assists customers in obtaining private third-party financing, grants, or rebates for the cost of constructing the facility improvements, resulting in little or no upfront capital expenditure by the customer. After a project is complete, the company may operate, maintain and repair the customer’s energy systems under a multi-year O&M contract, designed to provide the company with recurring revenue and visibility into the customer’s evolving needs.

In addition, the company serves certain customers by developing and building small-scale renewable energy plants located at or close to a customer’s site. Depending on the customer’s preference, the company will either retain ownership of the completed plant or build it for the customer. Most of the company’s small-scale renewable energy plants as of December 31, 2023 consisted of solar PV installations and plants constructed adjacent to landfills, which use landfill gas (‘LFG’) to generate energy. The company also designs and builds, and owns, operates and maintains plants that utilize biogas from wastewater treatment processes. The company’s largest renewable energy project that the company operates for a customer uses biomass as the primary source of energy.

Lines of Business

Smart Energy Solutions Projects

The company’s Smart Energy Solutions Projects are primarily energy efficiency projects, which entail the design, engineering, and installation of an ever-increasing array of innovative technologies and techniques designed to improve the energy efficiency and control the operation, of a building’s energy- and water-consuming systems. In certain projects, the company designs and constructs a central plant or cogeneration system providing power, heat and/or cooling to a building, or a small-scale plant that produces electricity, gas, heat or cooling from renewable sources of energy for a customer, as well as battery energy storage. The company’s projects generally range in size and scope from a one-month project to design and retrofit a lighting system to a more complex 36-month project to design and install a central plant or cogeneration system or other small-scale plant. Projects the company has constructed or is working on include designing, engineering and installing energy conservation and resiliency measures across school buildings, large, complex energy conservation, and energy security projects for the federal government, and municipal-scale street lighting projects incorporating smart city controls.

O&M

After an energy efficiency or renewable energy project is completed, the company often provides ongoing O&M services under multi-year contracts. These services offer end-to-end technical guidance and include operating, maintaining, and repairing facility energy systems, such as boilers, chillers, and building controls, as well as central power and small-scale plants. For larger projects, the company frequently maintains staff on-site to perform these services. In addition to providing O&M services for the company’s own projects, the company provides similar services on projects the company did not construct for various customers.

Ameresco-owned Energy Assets

Ameresco-owned energy assets are small-scale power plants that the company develops, designs, constructs, finances and owns/operates. These assets may sell electricity, heat, cooling, processed biogas, or renewable biomethane fuel under short-or long-term contracts. The company also offers Energy as a Service (‘EaaS’), where the company designs, constructs, finances and owns/operates various energy conservation measures on a customer’s site and sells them the output or availability of these items under a short-or long-term contract.

The company has constructed and is developing, designing, and constructing a wide range of renewable energy plants using: biogas (generated from landfills, wastewater treatment plants, and the agricultural sector); advanced biofuels; biomass and other bio-derived fuels; solar PV; wind and hydro sources of energy; and battery storage.

Most of the company’s renewable energy assets as of December 31, 2023 have involved the generation and sale of electricity from solar PV or battery storage; and electricity, thermal, renewable fuel, or biomethane using biogas as a feedstock.

In the case of the company’s biogas-fueled projects, the company purchases biogas that otherwise would be combusted or vented, process it, and either use it as a renewable fuel source in the company’s energy plants to produce and sell electricity and/or thermal, or sell it as a renewable fuel source to a third party. The company also designs and builds and operates and maintains facilities that process biogas into biomethane (or renewable natural gas) that can be transported, primarily through the nation’s natural gas pipeline grid or in some cases through tanker trucks and sold to third parties. The rights to use the site for the plant and the purchase of raw feedstock fuel for the plant are also obtained by the company under long-term agreements with terms at least as long as the associated output supply agreement.

As of December 31, 2023, the company owned and operated 185 small-scale renewable energy plants, including solar PV installations, which generate electricity or deliver renewable gas fuel with a combined capacity of approximately 508 megawatt equivalents (‘MWe’) and have energy assets in development and construction with a combined capacity of approximately 717 MWe, which includes 48 MWe attributable to a non-controlling interest.

Other

The company’s other lines of business include photovoltaic solar energy products and systems (‘integrated-PV’), consulting, and enterprise energy management services.

Business Segments

For the year ended December 31, 2023, the company’s reportable business segments were as follows: U.S. Regions, U.S. Federal, Canada, Alternative Fuels, Europe, and All Other. Europe was formerly included in ‘All Other’.

The company’s U.S. Regions, U.S. Federal, Canada, and Europe segments offer energy efficiency products and services which include the design, engineering, and installation of equipment and other measures to improve the efficiency and control the operation of a facility’s energy infrastructure, renewable energy solutions, and services and the development and construction of small-scale plants that the company owns or develops for customers that produce electricity, gas, heat, or cooling from renewable sources of energy and O&M services.

The company’s Alternative Fuels segment sells electricity and processed RNG derived from biomethane from small-scale plants that the company owns and operates and provides O&M services for customer owned small-scale RNG plants.

The ‘All Other’ category offers consulting services and the sale of solar PV energy products and systems, which the company refers to as integrated-PV.

Sales and Marketing

The company’s sales and marketing approach is to offer customers customized and comprehensive energy efficiency solutions tailored to meet their economic, operational, and technical needs. The company identifies project opportunities through referrals, requests for proposals (‘RFPs’), conferences and events, website, digital campaigns, telemarketing, and repeat business from existing customers. The company’s direct sales force develops and follows up on customer leads. As of December 31, 2023, the company had 168 employees in direct sales.

Customers

In 2023, the company served customers throughout the United States, Canada, and Europe. Approximately 71.8% of the company’s revenues were derived from federal, state, provincial, or local government entities, including public housing authorities, public universities, and municipal utilities. The company’s federal customers include various divisions of the U.S. federal government.

Competition

The company’s principal competitors include:

Smart Energy Solutions: McKinstry, CM3 Building Solutions, CMTA, Inc. (a Legence company), SitelogIQ, ABM Industries, Inc., Southland Industries, Energy Systems Group, LLC, Honeywell, Johnson Controls, NORESCO (a unit of Carrier Global Corporation), Schneider Electric, Siemens Building Technologies, and Trane Technologies (an Ingersoll-Rand company).

Energy Assets: In the LFG and RNG market, the company’s principal competitors primarily include large, national project developers and owners of landfills who self-develop projects using LFG from their own landfills, and other national renewable natural gas developers/owners such as Archaea Energy, Montauk Renewables, Vanguard Renewables, Opal Fuels, and divisions of large multi-national oil and gas conglomerates. In the Solar PV and Battery Storage market the company’s principal competitors include NextEra Energy, Inc., Engie SA, Invenergy, EDF Renewables, and Clearway Energy Group LLC. In EaaS, the company’s competitors include Engie SA, Enel X, Schneider Electric SE, and Redaptive, Inc.

O&M Services: EMCOR Energy Services, Comfort Systems USA, Honeywell, Johnson Controls, and Veolia.

Regulatory

Some of the company’s renewable energy projects, which are operating as exempt wholesale generators or operating under a special exemption from the Public Utility Holding Company Act of 2005 are subject to rate regulation for wholesale power sales by the Federal Energy Regulatory Commission (‘FERC’) under the Federal Power Act and must comply with certain FERC reporting requirements.

Seasonality

The company is subject to seasonal fluctuations and construction cycles, particularly in climates that experience colder weather during the winter months, such as the northern United States and Canada, and climates that experience extreme weather events, such as wildfires, storms, or flooding, or at educational institutions, where large projects are typically carried out during summer months when their facilities are unoccupied. The company’s revenues and operating income in the third and fourth quarter (year ended December 2023) are typically higher, and the company’s revenues and operating income in the first quarter are typically lower, than in other quarters of the year.

History

Ameresco, Inc. was founded in 2000. The company was incorporated in Delaware in 2000.