Ormat lands up to $35M DOE grant for geothermal research
What's the deal? Ormat TechnologiesDealroom has a profile for this one. Try Dealroom → has been selected by the US Department of EnergyDealroom has a profile for this one. Try Dealroom → for up to $35 million to fund two research-heavy projects, the geothermal specialist said. The grant arrives as the company's shares trade near $93, down 18.17% year to date.
Why it matters: At $35 million, the award ranks in the 99th percentile among deep tech grant rounds tied to Israel, placing it near the top of 306 comparable deals on an all-time basis.
What's the endgame? Ormat builds geothermal and energy storage projects, selling reliable, carbon-free baseload power. Demand from electrification trends — including data centres and industrial customers — is translating into premium power purchase agreement pricing, supporting revenue visibility.
Why now? The extension of production and investment tax credits for geothermal and energy storage projects through at least 2033 reduces capital costs and de-risks new development. That policy backdrop strengthens the case for federal support of research-stage work.
What could go wrong? Heavy reliance on Chinese batteries and sizable planned capital spending could pressure Ormat if policy or funding costs shift. Valuation is also contested: the stock trades at about 45.2x earnings, well above the global renewable energy average of 14.7x and a peer figure of 30.5x.
Analysts remain split. Eleven investors see fair value near $127.67 — roughly 27% above the last close — citing policy support and premium power pricing. A plainer read on the multiple suggests the market could drift toward a 24x fair ratio over time, pointing to downside risk.
The signal: Federal money is flowing toward geothermal as grids hunt for firm, carbon-free power to meet electrification demand. For Ormat, the grant is a modest catalyst against a much larger debate over whether its growth narrative justifies today's price.
Read more: sg.finance.yahoo.com
Image credit: denisbin
