Electrical Marketing's LiveWire

New Jersey’s boom in solar power installations, driven by lucrative solar renewable energy credits, made the Garden State second only to California in installed solar power capacity. Now it’s reached a point of saturation where solar installers are looking for legislation to keep their industry alive. According to a post on the blog Knowledge Problem, the solar power glut has “lobbyists for both the solar power industry and unionized solar installers descending on the state capital, pleading for imposition of still higher purchase requirements on electric power consumers. The rallying cry has been to “save the jobs” created by the solar power purchase mandate.”

KeyBanc Capital Markets and Electrical Wholesaling magazine have published the latest of their quarterly surveys of economic conditions in the electrical distribution market. They found improvements in just about every parameter they looked at, from inventory support for pricing to hiring plans, though expectations among distributors focused on residential and utility markets continue to underwhelm.

Read “Steady Progress” at ewweb.com.

Still lots of chatter in the market on Amazon’s move into the MRO market. Check out this Financial Times article.

General Cable Corp., Highland Heights, Ky., took a giant step into the aluminum wiring market with the purchase of Rio Tinto plc, the owner of Alcan Cable.
According to information on General Cable’s website, Alcan Cable employs approximately 1,050 associates in its aluminum cable manufacturing and distribution facilities servicing the energy and construction markets in the United States, Canada, Mexico, and China. On an annual basis, the Company estimates the acquisition will contribute approximately $650-700 million in revenues at current metal prices.
In that press release, Gregory Lampert, president and CEO, General Cable North America, said, “The addition of aluminum construction cables further expands the range of products we offer to distributors serving electrical and industrial contractors and increases our capacity to efficiently serve our electric utility customers with transmission and distribution products.” Details

Mad Money’s Jim Cramer has been a big fan of Eaton Corp. and its CEO Sandy Cutler for some time now. Click here to see what he has to say on this deal and why he thinks Eaton stock is a better buy than Facebook right now.

Eaton Corp., Cleveland, announced its plans to buy Cooper Industries, Houston, in a deal that’s sure to send shockwaves throught the electrical market and bring Eaton into many new markets, including lighting, hazardous equipment, utility products, fuses, wiring devices and strut. The combined company would have had historical 2011 revenues of $21.5 billion, according to an Eaton press release. Cooper’s stock price surged 25% on news of the acquisition.
While the conference call announcing the acquisitions focused for the most part on the financial aspects of the deal, Sandy Cutler, Eaton’s CEO, did touch on the addition of utility products to Eaton’s product mix, and seemed particularly excited about the potential of growth within this product area. Details
Presentation on acquisition from Eaton Corp. 5/21 conference call

More to come later today…

The U.S. Department of Commerce yesterday announced that it would order tariffs of 31% and more on solar photovoltaic (PV) panels imported from China after a preliminary finding that Chinese companies were selling panels in the United States at prices below fair market value — i.e., dumping. If this preliminary finding is affirmed by U.S. trade officials this fall, will have a significant effect on the cost of solar power development and possibly on the availability of panels in the U.S. market.

“More than 60 Chinese firms, including Suntech Power Holdings Co., the world’s largest solar panel maker, and Trina Solar Ltd., face a 31% duty on their exports to the U.S., retroactive to shipments made in February. All other Chinese exporters of solar cells will be hit with a tariff of 250%,” said a story in the Los Angeles Times.

The tariffs come on top of penalties of less than 5% ordered by the Commerce Department in March after finding the manufacturers were illegally subsidized by the government of China. That ruling was seen as moderate by both U.S. manufacturers of solar panels, who had sought the Commerce Department’s intervention, and U.S. solar developers who buy panels. This ruling? Not so moderate.

Yesterday the Coalition for Affordable Solar Energy (CASE) warned that the steep tariffs could spark a trade war between the U.S. and China, and that the increased cost of solar panels “will ultimately come right out of the paychecks of American solar workers.”

The Coalition for American Solar Manufacturing (CASM), a group of U.S. PV panel-makers and supporters, called the ruling “a very positive first step.”

Pike Research, in a study released today, makes the case that the market for commercial lighting will grow strongly through about 2021, when it will hit about $54 billion, then it will contract through the remainder of the ’20s, back down to about $30 billion. Why? Solid state lighting.

LEDs will displace more than 52% of the global market for lamps in commercial buildings by 2021, Pike says. Then “the combination of declining prices for LED lighting and the accompanying extended lamp lifetimes will have the effect of shrinking the overall value of the market,” said a release announcing the report.

Here’s where you get the full study: “Energy Efficient Lighting for Commercial Markets” What do you think?

In one of the largest acquisitions in years, Rexel has purchased Platt Electric Supply, Beaverton, Ore., the largest regional chain in the Pacific Northwest and Mountain states.

Platt Electric Supply has 1,000 employees at 111 branches in seven states and posted 2011 sales of €310 million in (US$394 million). The company was ranked #13 on Electrical Wholesaling’s 2011 Top 200 listing. Platt has for years been a powerhouse in the Pacific Northwest and over the past few year has expanded into the Mountain States, including Idaho, Nevada Montana and Utah. It has 31 locations in Oregon; 36 branches in Washington; 21 branches in California; and recently opened a regional distribution center in Salt Lake City, Utah. According to information on its website, Rexel had two branches in Oregon, one in Washington, and 23 in California, before the acquisition.

A Rexel press release announcing the acquisition said Jeff Baker, president of Platt Electric Supply, will become president and CEO of Platt Electric Supply and will become V.P. of Rexel Inc. He will assume an enhanced leadership role on several key initiatives for the broader Rexel business in the U.S. The transaction, subject to customary conditions, should close in early July and Platt Electric Supply’s operations should be consolidated from July, 2012. Details

A report by the Wall Street Journal discusses the potential impact on the electric grid from solar storms expected to hit a peak in 2013. Good discussion of attempts to understand the impact of historic storms and to anticipate and prepare for the next.

“The Federal Energy Regulatory Commission, which oversees the grid, has begun to look into possible new rules. Chairman Jon Wellinghoff said the four-member commission might require upgrades if it found ‘the threat was high and the cost was low.’ Regulators could require the industry to install blocking devices on transformers, for example, or raise the construction standards for high-voltage gear. Or they might take less intrusive action, like ordering more monitoring devices and additional threat assessment. An April 30 conference organized by the commission saw vigorous debate on how quickly the grid needs upgrading.”

“Here Comes the Sunstorm” (subscription required)

My visit last week to the Epicor Users Group meeting in Las Vegas and an interview I did there for an upcoming article with Kevin Roach, Epicor’s executive V.P. and general manager, ERP Americas, got me thinking about why more distributors aren’t trying to differentiate themselves from competitors with online storefronts.

A recent posting on www.seekingalpha.com about Grainger’s growth in recent years prompted me to do some research on the company’s ecommerce operations, which last year provided $2.2 billion in sales (yes, that’s “billion” with a “b”).
In its 2012 Factbook, Grainger had this to say about its ecommerce operations:
“eCommerce is a powerful element of Grainger’s multichannel strategy, growing at twice the rate of other U.S. channels. It is the most profitable arm of the business, creating a huge opportunity for sales and earnings growth. Grainger has been a pioneer in business-to-business eCommerce, launching the Grainger.com website in 1995. Today, more than 27 percent of the company’s annual revenue is generated through electronic channels, representing $2.2 billion in sales in 2011. Based on Internet sales revenue, Grainger ranked 15th in the U.S. and Canada on the Top100 e-retailers of 2011.”
Now that’s some serious sales.