Every Monday we now feature “A Stock to Sell” as our daily post. With each sell, we give you a full explanation of why we advise against investing in these stocks.

This is part of our new approach offering you buy, hold and sell advice in our daily posts. You also get “Best Canadian Stocks” on Tuesday, “Our Top U.S. Stocks” on Thursday, and every Friday, our advice on one of the stocks that members of Pat’s Inner Circle have asked about in their weekly Question & Answer sessions.

Eguana Technologies (symbol EGT on Toronto; www.eguanatech.com), formerly called Sustainable Energy Technologies Ltd., makes products that convert the high-current/low-voltage (DC) electricity from solar cells into high-voltage alternating current (AC) power, which is used by power grids and most industrial and consumer electronics.

Eguana recently partnered with Germany-based Prosol Invest Deutschland GmbH, a maker of lithium-based energy-storage systems. Prosol’s products include the Sonnenbatterie, which is designed to store power from solar cells and is aimed at clients ranging from homeowners to farms and small- and medium-sized businesses.

In the three months ended March 31, 2014, Eguana’s revenue jumped to $396,357 from $46,768 a year earlier. However, the company continues to lose money and report negative cash flow: its cash flow was negative $660,416 in the latest quarter, compared to negative $369,210 a year ago. Per-share cash flow was unchanged at negative $0.02 on more shares outstanding.

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Tech stocks: Technology of battery systems for solar power still unproven and reliant on government subsidies

Eguana’s main market—in conjunction with companies like Prosol—will continue to be projects where solar power can be combined with batteries to store power in homes. This requires the development of battery systems to store excess energy generated from the household’s rooftop solar panel system during the day.

However, this technology is still under development. Even if it is technically perfected, it will probably need government subsidies for some time before it becomes cost-effective.

In the meantime, solar power remains a poor substitute for natural gas, because it provides only intermittent power and also needs heavy subsidies. That’s especially so now that the natural gas industry has developed techniques that cut its costs and let producers expand into new areas containing gas that was previously thought to be inaccessible.

In the longer term, the combination of home solar panels and batteries may become viable. But meanwhile, Eguana needs to keep issuing shares at low prices to sustain its operations. That’s highly dilutive to its current investors and adds to the risks inherent in a stock like Eguana, which also include the prospect of increased competition from major electronic companies if it ever does perfect its technology.

We don’t recommend Eguana Technologies. If you own the stock, we think you should sell.

Last week we had had a sell on a Canadian stock in the auto parts industry. If you missed it you can see the article here.