Indianapolis-based Infrastructure & Energy Alternatives (IEA) acts as a project manager, installing utility-scale solar and wind developments on behalf of project-owning customers. IEA identifies and designs sites, and constructs, installs and redevelops energy projects, notes Brendan Coffey, editor of Cabot SX Greentech Advisor.

For much of its history, it focused solely on wind, but added solar capability in 2019, around the same time it expanded heavily into civil engineering — paving, rail construction, environmental remediation and industrial maintenance arms. The additions came from a series of acquisitions that diversified the business as it entered a going-public transaction with a SPAC.

The company is ranked by Engineering News as the second-largest wind contractor in the U.S., fourth in power, eighth in solar and in the top 50 of rail, mining, highways and transportation. Overall, the business has installed 24 GW of renewables in the U.S. (its primary market).

Its specialty civil division often dovetails with the renewables operations, allowing IEA, for instance, to bid to also build access roads to wind farms. Also on the civil side, IEA has teamed with a sea cargo handler, Logistec, to offer services to the offshore wind industry, with the expectation of handling some of the multiple east coast wind projects being developed.

Even being a relatively recent entrant into constructing solar farms, the fact IEA is eighth-largest speaks to its effectiveness already. Solar is now 20% of the renewable business and includes Kentucky’s utility-scale first solar farm, Turkey Creek Ranch, which begins construction this year. Margins aren’t as strong as wind, but management says the learning curve is flattening out and should reach wind’s levels in the next year or so.

The company signed $2 billion in renewable project deals in 2021, but revenue from them will vary — the company doesn’t start to buy materials or receive any payments until clients give the order to proceed, which can have substantial delays. Total backlog is $2.9 billion entering this year.

Management is particularly enthused about the potential for its niche business in coal ash remediation. Coal ash ponds are large deposits of spent coal from power plants. According to IEA’s estimates, that is a potential $150 billion, based on back-of-the-envelope math of 2 million tons of ash per site, generating revenue of up to $75 a ton to remove.

For this year, IEA tells analysts to expect sales of $2.1 billion to $2.2 billion with adjusted EBITDA of $150 million and its first net income, at 86 cents per share. IEA pushed over its 50- and 200-day moving averages for the first time in 14 months on earnings and outlook. I rate the stock a buy.

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