As the orders and the backlog grow for Capstone Turbine (CPST), there's another reason to keep an eye on this company that is positioning itself to play a key role in 'fueling the future'.

Capstone announced on Tuesday that it had further penetrated the hospital market by selling one of its C1000 model to be "installed at a major hospital in Massachusetts in a combined heat and power application."

A representative of EMCOR, the contractor that worked with the hospital on the selection of Capstone's system noted that "Hospital officials chose the C1000 microturbine rather than a traditional reciprocating engine because its maintenance is so much lower, it's quieter and it meets Massachusetts' strict emissions requirements."

Capstone's low-emission microturbines have been gaining in popularity as global governments trend towards 'greener' energy-production, and a Presidential mention by US President Obama in Brazil earlier this year certainly doesn't hurt Capstone's cause.

While the oil and gas shale plays have dominated the announcements of new distribution this year, it's the hospital penetration that holds the most intrigue, as it opens up the idea that Capstone's energy-efficient microturbines could find themselves in new homes at some point along the way. The nation's energy grids and infrastructure are suffering, and as revamping and modernization take place, there could be room for Capstone to move in and help the fill the voids of the future.

The Capstone share price has been heavily shorted through the early portion of 2011, which is likely the cause of the fairly drastic, if unwarranted, price drop after the last earnings report. There are still lingering concerns by some investors of margins and backlog, but the company keeps spitting out quarter after quarter of record revenues. Added efficiency in reducing the backlog and returning revenue has the company on the path towards profitability, a goal that many investors would like to see achieved before putting too much money into this stock.

That said, if Capstone is going to be a big player in the future of fuel efficiency, the time to buy - in my opinion - is before it becomes a profitable company. At that point, it won't be slipping below the radars any longer. It's also likely that the more successful Capstone becomes, the harder look companies such as General Electric (GE) will pay it as a takeover target.

The Massachusetts hospital announcement is encouraging - look out for more of these, because then it becomes a trend.

When commissioned, the 1 megawatt natural gas microturbine will provide 1,000 kilowatts of electricity to help the hospital meet its growing energy needs. In addition, exhaust heat from the microturbine will be fed through three Cain heat recovery modules to produce steam and heat two hot water systems, which will greatly increase onsite energy efficiency and reduce overall carbon emissions by reducing the amount of natural gas used in the existing boilers.

That's efficiency that sells, and lends to the 'green' reputation that Capstone is building for itself.

Disclosure: Long CPST.

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