Ever since the 2014 U.S. mandate which required a phasing out of incandescent lights in the retail market in favor of LED (light emitting diode) lighting due to environmental concerns, the LED industry has enjoyed major retail sales increases and industrial deployments. Although it only serves the governmental and corporate market, ForceField Energy, Inc. (NASDAQ – FNRG) is helping lead the industry’s charge with an innovative and highly successful “no money down” business approach. Through its U.S. subsidiaries and businesses abroad, ForceField currently boasts over $100 million in bid proposals and potential revenue over the next few years, via signed contracts, letters of intent, pilot programs, and official bids, with government entities and major corporations. Sample deployments include municipal LED street light conversion projects driven by state and federal initiatives such as the President’s Challenge for Advanced Outdoor Lighting and the DOE’s Better Building Program.
In these large-scale deployments, ForceField Energy works in concert with utility and financing leader Constellation Energy to offer an energy efficiency financing program that does not require an upfront capital outlay. This novel financing approach substantially reduces customers’ upfront costs and enables Force Field to generate very significant revenue over a multi-year timeframe, thus maximizing earnings and cash flow potential.
It is easy to see why the LED market is growing so quickly and why ForceField’s clever approach is a no brainer for its customers. Across the globe, 60-watt and 40-watt incandescent bulbs are being phased and are no longer available for manufacture or retail sale. These bulbs have been largely replaced by LED lights which are considered “green” due to the absence of dangerous chemicals and the associated substantial reduction in energy consumption of 50-75%. As a result of the LED light directional output, LED lights can provide better directional light than incandescent or fluorescent bulbs. Plus, the payback (return on investment) on commercial lighting replacements with LED is very short.
Given these factors, industry estimates suggest that U.S. federal, state and local governments could save billions in energy costs. Moreover, the estimated replacement market worldwide represents a $1 trillion opportunity.
It should be noted that the company’s approach and high-profile contracts have led to record high stock prices and an increase in Wall Street price targets. Investment pros likely see the benefit of ForceField’s positioning. Since the company does not produce its own products, it can offer best of class solutions and not be subject to current and potential gross margin deterioration of a commoditized product like LED lights, that may plague other companies.
At the rate management is securing new high-profile business ForceField Energy is primed to become a major player in the not too distant future.