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5 Stocks on the Cusp of a Smart Grid Revolution

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Barack Obama, after being inaugurated as the President of the U.S., promised in 2009 that "We'll fund a better, smarter electricity grid and train workers to build it… just these first steps toward modernizing the way we distribute electricity could reduce consumption by 2 to 4 percent."

The President had rightly underlined the importance of effective distribution of electricity. The old grids were doing this job for ages, then why did the need suddenly arise to a have "Smart Grid" to manage the distribution of electricity.

The country has had its share of power blackouts, which were not due to the shortage of power generation but owing to some shortcoming of the distribution network. The only solution to prevent blackouts was to upgrade the existing electricity infrastructure.

Meanwhile, technology was advancing in leaps and bounds and the latest buzzword was the Internet of Things (IoT) which found its application in diverse spheres, not least the energy sector. The introduction of smart grids, which used IoT, enabled energy distribution to be tracked in real time based on immediate data and not on historical patterns of energy consumption.

Smart grids, built on the existing grid structure, have added more strength and firepower to the distribution network. The smart 21st century computer based distribution network increases efficiency of the grid benefiting both the energy generators as well as the consumers.

The reliability that smart grids are bringing to the system is no less a revolution in our increasingly digitalized world which will fall apart without electricity. Our lives depend on the supply of power 24x7. Smart grid actually ensures uninterrupted power supply.

In a nutshell, smart grid acts as an adhesive in the entire electric infrastructure to ensure the effective distribution of electricity produced, increased resilience and flexibility of the entire electricity distribution network and the prevention of blackouts.

Five Blackout-Resistant, Smart-Grid Stocks

Investing in smart grid stocks is currently a smart bet for investors as IoT brings in a sea change in the traditional utility landscape. This is especially so as smart grids can help in real-time trouble shooting, lowering the cost of energy and keeping power prices in check.

ITC Holdings Corp.ITC

Novi, MI-based ITC Holdings together with its subsidiaries engages in the transmission of electricity in the U.S.

The company invests in the electricity transmission grid to improve electric reliability, expand access to markets, lower the overall cost of delivered energy and allow new generating resources to interconnect to its transmission systems.

Advanced Energy Industries, Inc.AEIS

Collins, CO-based Advanced Energy Industries along with its subsidiaries provides advanced power and control technologies to customers across a broad range of industries.

The company provides technical expertise and responsive and agile power solutions for thin-film and industrial manufacturing.

ESCO Technologies Inc . ESE

St Louis, MO-based ESCO Technologies along with its subsidiaries produces and supplies engineered products and systems for utility, industrial, aerospace and commercial markets globally.

The company has three operating segments. In particular, its Utility Solutions Group segment develops, manufactures and delivers diagnostic testing solutions for electrical equipment comprising the electric power grid and enterprise management systems. It also provides consulting and testing services to its customers.

EnerNOC, Inc.ENOC

Boston, MA-based EnerNOC, Inc., provides energy intelligence software and related solution to its customers.

The services rendered by the company help its customers to perform certain energy efficiency operations. It helps the company to track demand response in open and vertically integrated markets. Its products also include EnerNOC Demand Manager and EnerNOC Demand Resource demand response solutions and applications for utility customers and electric power grid operators.

PowerSecure International, Inc.POWR

Wake Forest, NC-based PowerSecure International provides products and services to electric utilities and other customers in the U.S.

The company's Utility Infrastructure team works with utilities to design, build and upgrade infrastructure to enhance the efficiency and effectiveness of the nation's electric grid.

Bottom Line

Per an Environmental Defense Fund analysis, nearly 7% of the power we generate is lost in transmission and distribution. The smart grid will help to stop the wastage, which will help in lowering energy costs.

With more than a trillion dollar to be invested in smart grid technology in the next two decades, it is not only here to stay but also the way forward to the nation achieving energy independence.

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ESCO TECH INC (ESE): Free Stock Analysis Report

ITC HOLDINGS CP (ITC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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