China Ritar Power Corp. (CRTP) has set a new 52-week high already this morning, briefly topping $6/share. The company manufactures lead-acid batteries for a variety of applications, including uninterruptible power supplies, light electric vehicles, and electric utilities.
The recent IPO of A123 Systems, Inc. (AONE) has put a spotlight on battery technology, and China Ritar’s technology could play a significant role in storing electricity generated from alternative energy sources like wind and solar. Lead-acid batteries have a large cost advantage, giving companies like Ritar Power, EnerSys (ENS) and Exide Technologies (XIDE), a jump start in the market for storing wind- and solar-generated electricity. It’s too early to say that that market is poised to soar, but the company that leads in technology and cost structure when that market takes off will be riding high for a long time.
Ritar Power’s AGM and GEL batteries are both deep-cycling and have the potential to scale up to utility-size applications. Such batteries could store solar-generated electricity for night-time use, and wind-generated electricity for use on calm days. Essentially that doubles the capacity of both solar and wind power generation.
The use of lead-acid batteries in utility-scale storage is still in the demonstration phase, and a competing technology, lead-carbon batteries, is being developed by Axion Power International, Inc. (AXPW), which trades over-the-counter.
Battery makers stand to receive some $2 billion from the federal stimulus package, but so, far no projects have been approved for funding. The Department of Energy has only kicked out about $700 million in actual funding of its nearly $13 billion portion of the stimulus package. The alternative energy piece of spending so far totals about $13 million for smart grid projects.
Choosing a battery technology for utility-scale projects might be best left to the market. Otherwise, the U.S. could end up with another ethanol boom/bust.
Ritar Power is trading up nearly 7%, at $5.82. The stock, which began trading on the NASDAQ exchange on August 3rd, has been climbing steadily within its trading range of $1.01-$5.38. The median target price for the company’s shares is $7.25 according to Thomson/Reuters.
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