December 03, 2005
Saving Energy Is Good Business
By: by Larry Rulison - Times Union
Selling lights to businesses hasn't been too difficult these days for Christopher Covell and John Bonicoro.
The two men are managing partners of SmartWatt Energy Inc., a small energy efficiency consulting business located in a quiet office park.
SmartWatt and similar smalloperations are part of a robust industry in the Capital Region that includes other businesses developing everything from fuel cells and superconducting cables to advanced solar and wind technologies.
DayStar Technologies Inc., a solar energy manufacturer that has garnered national attention, is located across the street. The Saratoga Technology and Energy Park, a high-profile site where DayStar intends to build a factory, is in Malta.
But SmartWatt's Covell and Bonicoro sell energy-efficient lights, serving a growing market as businesses and governments spend to save on energy costs. Another company, Hoosick Falls-based Windo-Therm LLC, provides window insulation panels that cut heat loss.
"Wherever you turn, energy is a hot-button issue right now," said Pradeep Haldar, director of the University at Albany's Energy & Environmental Technology Application Center and a professor at UAlbany's College of Nanoscale Science and Engineering. "There is a huge opportunity to reduce wasted energy by upgrading facilities to produce direct savings."
Haldar says researchers involved with the center are working with industrial partners on better sensors, embedded controls and computer chips that help increase energy efficiency for businesses. He says this is important because energy costs are often a business's largest expense.
Enter SmartWatt. It doesn't make lights. But it knows which lights are energy efficient. And it knows how to make the most out of a lighting system with reflectors and motion sensors that turn the lights out when businesses don't need them. In many cases, SmartWatt, which specializes in industrial and manufacturing clients, can cut a company's lighting electricity costs in half.
"Your typical manufacturer never turns the lights off," Covell said. "Your easiest way to save money is on your lighting system."
For businesses, most of which are already obsessed with the bottom line, that can be an easy sell.
With natural gas costs expected to rise 35 percent this winter, and electricity prices also expected to increase, businesses are looking for a way to save on energy costs any way they can.
"The main thing in business is to make money," Bonicoro said. "You've either got to raise prices or cut costs."
Cutting energy prices for businesses when heating and electric costs are rising has helped accelerate the growth of SmartWatt, which Covell and Bonicoro founded almost four years ago. The company is expecting sales this year will double from a year ago, when the company had revenue of $1.65 million.
SmartWatt's approach is simple. Many manufacturers use old, outdated lighting without any thought about their efficiency. SmartWatt will replace lighting fixtures with smaller lights that consume less electricity but provide more light when used with reflectors. And the company will set up motion sensors that keep lights off when they aren't needed. The company buys the lighting systems from manufacturers and uses subcontractors to install them, often working late into the night or around the clock so as to not interfere with a company's business.
And it's not just rising energy costs that are helping companies like SmartWatt. There are also government incentive programs -- some of them new -- that help to make energy efficiency products pay for themselves in a short period of time.
For instance, a $250,000 project that SmartWatt did this summer for Cascades Tissue Group's Waterford factory received a rebate of nearly $24,000 from the New York Energy Research and Development Authority, a state government affiliate that supports energy efficiency and clean energy technology with funding and incentives.
In addition to promoting energy conservation and supporting research and development at energy companies, NYSERDA pays businesses and homeowners incentives to install energy efficient and clean energy systems. It's a way to promote the widespread adoption of new technologies such as efficient lighting and solar panels.
Rebates from NYSERDA -- and the fact that SmartWatt can reduce a company's electricity bill for lighting by 50 percent -- means SmartWatt doesn't have to press potential customers with a hard sell.
In many cases, the systems that SmartWatt sells pay for themselves in under two years. And under a leasing program, the monthly savings are more than the monthly payments.
During cold calls, Bonicoro and Covell simply drop off literature and call back in a few days. If a company agrees, they can do a walk-through and provide them with an estimate of what they can save them.
"It's really a no-brainer," Bonicoro said. "This is it. There's no smoke. There's no mirrors."
And starting Jan. 1, SmartWatt and other companies will be able to help their customers take advantage of the Energy Policy Act of 2005, which was signed by President Bush in August. Under the act, companies that install energy efficient lighting systems starting next year can take one-time federal tax deductions of up to 60 cents per square foot of the buildings where the systems are installed.
Incentives help other local companies that sell energy efficient products. Windo-Therm LLC, the Hoosick Falls company that sells window insulation panels, has obtained rebates for customers from NSTAR, a gas and electric utility based in Massachusetts, said owner Jim Devine.
Mike Durand, an NSTAR spokesman, said the utility has approved Windo-Therm's panels for participation in a commercial and industrial gas heating program that gives out rebates based on a percentage of energy savings.
However, Devine says he doesn't need to emphasize rebates during sales calls since the real benefit to his insulation panels is the energy cost savings. For instance, Vermont Mill Properties Inc. of Bennington, Vt., bought $30,000 worth of panels from Windo-Therm in July 2004, and it saved $20,000 on propane costs last winter.
Devine received a letter from Vermont Mill in April saying the company was elated because the panels will pay for themselves "in a very short time." That type of return in what Devine says sells the most, not rebates.
"A rebate shouldn't interfere in the decision-making process," Devine said. "It shouldn't be a deal breaker."
Devine does say that selling his panels -- he declined to reveal the company's revenues -- has gotten easier now that energy costs are rising. He said in the past it had been difficult because his patented design can be difficult to explain.
"People have no understanding of the concept of insulating a window," Devine said. "We're finding that the discussion is way easier to have. It's putting money in (a business owner's) bank account and his pocket that would have gone to oil companies."
Another local company taking advantage of a drive by businesses to reduce energy costs is Comfortex Window Fashions of Maplewood, a company that makes window shades and blinds. One of its specialties is a cellular shade with a "double honeycomb" design. The shades, which cost about $125 per window, depending on the size, can save a business more than $30 per window per year in heating costs.
Although the company focuses mostly on household consumers, about 5 percent to 10 percent of its sales are to businesses. John Fitzgerald, the company's executive vice president, said the company wants to increase commercial customers as part of an overall marketing and sales push. He declined to reveal revenues.
"This year we're really getting behind it, and our cellular shades are really through the roof," Fitzgerald said. "There's a lot of interest at all levels. A lot of the retail outlets, they're losing a lot of the energy costs out their windows."
Larry Rulison can be reached at 454-5504 or by e-mail at email@example.com.