The energy business arm of ABM Industries Inc. (ABM - Analyst Report) has recently started construction on a 2 MW solar array on Cornell University’s campus in Ithaca, NY. The investment seems to have impressed investors as share prices have marginally increased to $28.78 as on Mar 20.
The project will be financed and owned by ABM’s joint venture partner Building Energy in partnership with developer Distributed Sun, LLC. ABM will provide Engineering, Procurement and Construction (EPC) and Operations & Maintenance (O&M) services for this project.
The deal is Ivy League university’s first large solar endeavor. ABM is focusing on developing clean renewable energy project, minimize client’s utility costs and increase the overall power reliability. The solar array is expected to save 730 metric tons of carbon dioxide annually. Per the agreement, the 6,500+ panel Lansing solar array will provide low-cost energy rates to Cornell University over a period of 30 years and is line with its carbon reduction goals. The system is expected to generate over 2.2 million kilowatt hours (kWh) annually. A portion of the plant will also be used by students to view solar monitoring software for 10 panels.
With about $13 billion worth of solar project construction in 2013, ABM envisions a tremendous growth opportunity in the solar market. The market is expected to grow at a compounded annual growth rate (CAGR) of 28% by the end of 2016 and ABM is well positioned to take advantage of this growing market to augment its revenues.
ABM provides engineering, janitorial, parking, and security services to commercial, industrial, institutional, and retail facilities. The company has developed a platform to deliver an end-to-end service model to its clients by realigning operational structure to an on-site, mobile and on-demand market-based structure.
The company further expects to extend its global footprint as well as strengthen its position in the existing markets through inorganic and organic growth across industry verticals.
ABM currently holds a Zacks Rank #2 (Buy). Other stocks in the industry that look promising include Rollins Inc. (ROL - Snapshot Report), Huron Consulting Group Inc. (HURN - Snapshot Report) and Accenture plc (ACN - Analyst Report), each carrying a Zacks Rank #2 (Buy).