Capstone Turbine Corp. has changed its name to Capstone Green Energy Corp. to reflect changes in its business as it pursues a strategy of energy-as-a-service with microturbine rentals and other products, including hydrogen powered turbines.

Chief Executive Darren Jamison said the new name of the Van Nuys manufacturer is a better alignment with the market, as 73 percent of U.S. consumers are willing to pay more for sustainability and having a lower impact on the planet.

“To align with where the business has transformed, the name needed to change to reflect what the business is doing,” Jamison said. 

To come up with the new name, the company put together a team of employees who did a brainstorming session. It was decided to keep the Capstone name because of its long connection with the company, which didn’t want to lose any of its customers, Jamison said. 

“We tried a lot of different things, but we kept coming back to green energy because simpler is better in today’s world,” he added. 

The marketing of the new name started with a 13-minute video of Jamison that was shot at a local studio. The company also produced 1-minute and 2-minute versions of a new corporate branding video. 

“We changed our ticker symbol and got on the Nasdaq Tower in Times Square,” Jamison said, adding that social media accounts on Instagram, Facebook, Twitter and YouTube were also used to promote the name change. 

All told, Capstone spent about $150,000 on the name change, Jamison said. That includes the corporate videos, building signage and hiring of investor relations and public relations consultants, he added. 


Growth prospects

Michael Heim, senior equity analyst for Noble Capital Markets Inc. focused on energy and utility stocks, initiated coverage of Capstone in February. 

In a research note at the time, Heim wrote that microturbines serve an important role for the company’s clients seeking to replace or supplement high-priced electric utility service.

“Revenue growth has accelerated in recent quarters following a salesforce realignment and the easing of pandemic-induced customer spending reductions,” Heim wrote. “We expect growth to begin to taper in upcoming quarters as comparables get tougher but believe the company will be able to maintain high double-digit growth.”

The long-term prospects for Capstone are also good, Heim added in the note, especially as increased environmental consciousness pushes customers towards companies like Capstone that offer individualized products that reduce emissions.

“Capstone’s development of hydrogen-blending technologies should help grow sales,” Heim wrote in the note. 

The company currently offers a microturbine that operates on a 10 percent hydrogen, 90 percent natural gas mixture. It has the goal of reaching 30 percent hydrogen, 70 percent natural gas by the end of its current fiscal year next March, Jamison said. 

A team at Argonne National Laboratory in suburban Chicago will run Capstone’s hydrogen injector in a simulated setting in the coming weeks to test a 70 percent hydrogen, 30 percent natural gas mix. “That should give us a lot of good feedback on the performance of that injector,” Jamison said. 

The process of coming up with a right mixture is not too much different from traditional combustion engine technology, he continued. It is only a matter of working with the smaller hydrogen molecule that can be more volatile and presents its own challenges that don’t impact the performance of traditional fuels, he added. 

“It is nothing that is overly complicated and unobtainable from an engineering standpoint,” Jamison said. “It is just a matter of putting the work in.” 


Product development

Working with hydrogen has long been on the company’s product development radar but it was an issue of when the market would be there to support it as a fuel source. 

“I’d say the amount of energy around hydrogen the last 24 months has accelerated dramatically,” Jamison said. “Especially since the (presidential) election, I think it is picking up more steam.”

The Biden Administration announced in February it would target low-cost hydrogen production as part of its newly launched Climate Innovation Working Group. In April, the administration said that hydrogen would be part of the $15 billion going toward demonstration projects included in the American Jobs Plan. 

“We are hearing about it on Capitol Hill as well as on Main Street,” Jamison added.

Hydrogen is a clean fuel source. When used in a fuel cell, it produces only water. In fact, water is one way of creating hydrogen through electrolysis or the separating of hydrogen molecules from the oxygen molecules. 

There are developments domestically and abroad to bring down the cost of elecrolyzers used to create hydrogen, Jamison said. 

“I think when the cost of electrolyzers come down, then the cost of green hydrogen will come down,” Jamison said. “If you add government incentives to make it more economical, the two of them kind of cross over.”

Capstone customers have inquired about the company’s hydrogen efforts.

It started with Japan, then moved to Australia and continental Europe. And more and more U.S. customers are asking about the fuel source as well, Jamison said.

“We just did a large project on the Las Vegas strip and that customer was asking about our hydrogen path and what happens in five years or 10 years when hydrogen is mixed in with the natural gas infrastructure,” he added. 


Staying in California

The cost of a Capstone microturbine can vary based on size. A 65-kilowatt machine is about $70,000 and can power a small office building or industrial site. 

“You get into hotels, typically we are looking at $400,000 to $500,000 per machine,” Jamison said. “Bigger sites are 2 to 3 megawatts and those are $3 million projects.” 

In terms of the areas of the world that show the most promise for Capstone, China and India are huge potential markets. But in the near term the big markets remain the U.S., Latin America, Europe and Australia.

The countries that signed the Paris climate accords are a good place to start, Jamison said. 

“Those folks who are looking to lower their carbon footprint, they have to look for technology like Capstone’s,” he added. 

The Van Nuys company will likely continue calling California home despite numerous drawbacks from being located in the state – the cost of housing, the traffic, and the costly expense of doing business

Yet the biggest plus is access to the workforce the company needs to develop, build and market its microturbines. A lot of the employees on the shop floor are ex-military who have worked on expensive and sophisticated equipment before, Jamison said. 

“They are very meticulous in what they do and very structured and dedicated,” he added. 

Shareholders and board members have asked about staying in California, but it would be too disruptive to the employees if the company were to move, Jamison said.

“If we have a second facility when we expand, it won’t be in California,” Jamison added. “We would expand somewhere else where there is a lower cost of doing business in a more business friendly political environment.”