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Executive Summary
Product & Service Description
The hybrid water heater system is the first appliance that can potentially pay for itself and create a profit for home and business owners during the life cycle of the product. It uses natural gas to heat water and generate electricity. With an estimated gross profit of $1000 per unit and an estimated net profit of $500 per unit, we expect to become profitable after sales of 3000 units per year.
Features & benefits of the Hybrid Water Heater (HWH) include:
· Reduces existing electric grid dependency by 60 to 100% (or more)
· Unlimited hot water at 99.5% efficiency
· Emergency electrical power generation for home and business owners during utility grid interruptions
· EV & PHEV charging capacity, costs $.10-.12 per Kw Hr., equivalent to $1.20-1.40 per gallon of gas
· Zero additional real estate costs
· Zero additional infrastructure costs
· Saves the electrical transmission and distribution losses of the existing grid, 7% efficiency saving
Specifications and capacities can be customized for each installation. Onsite service contracts are also available.
Consumer Value proposition
With a Hybrid Water Heater, the customer can expect:
· 20 to 70% reductions in utility bills (combined gas and electric)
· 25 to 50% reductions in hot water expenses
· ROI of 3 to 6 years
· Increases the value of the home by reducing the costs of energy
Options:
· Combined heat and power (CHP) [future product upgrade]
· Compressed natural gas (CNG) car/truck home refueling system [future product upgrade]
Tax & California rebate benefits:
· Federal Tax Credit of $3,000 per Kilowatt or 30% of fuel cell system for period of 2009-2016
· California self generation rebate of $2,500 per kW capacity
Environmental Benefits:
· CO2 Reduction
· Nearly 100% Reduction of CO, NO’s, and SO’s compared to coal or natural gas power generation
· The hybrid water heater interfaces with solar hot water and solar photovoltaic electrical systems
Company & Investment Description
Hybrid Water Heater Inc. is a clean-tech startup company that assembles and markets Hybrid Water Heaters based on US Patent 7,020,387. The company is seeking private placement equity from accredited investors, seeking $1,750K for prototypes & $1,750K for marketing for 2009-2010.
Industry Analysis
Volume of water heaters sold annually for replacement needes, (US Market):
· 100+ million units are in service
· 8 Million water heaters sold annually (7 Million replace existing water heaters)
· 60+ million homes have access to natural gas
Competitive water heater technologies: Tank, tank less, heat pump, and hybrid, fueled by:
· Natural gas
· Propane
· Electric
· Solar
Residential tank type water heaters have a capacity of 30 to 50 gallons and cost $350 to $650. Tankless water heaters cost $750 to $1200. There is also a new novel hybrid type water heater which is part tank type and part tank less type water heater with some systems using heat pump technologies.
There are hundreds of thousands of emergency generators sold each year. Billions of kilowatt-hours of electrical energy are generated each year by hundreds of investor owned, publicly owned and cooperative owned utilities that exist in the USA.
Target Market
Initial marketing and sales will be targeted at gas and electric utilities that are seeking the benefits of distributed power cost savings or that are in need of additional electric power generating capacity. Sales to individual consumers are expected to follow through existing construction supply outlets as mass production facilities are developed.
The Competition
The competition in the water heater market includes existing manufacturers such as Rheem, AO Smith, Bradford & White, and American Water Heater Group. In terms of standby and emergency electrical power generators, existing manufacturers include Honda, Kohler, and Yamaha.
Marketing & Sales Plans
Several business models for Sales & Marketing efforts will be explored. Creating partnerships with existing utilities, natural gas supply companies, natural gas producers, and transmission companies to own and operate and maintain systems. The utilities can site the HWH systems in homes and businesses in the area of the utility’s operations for greenhouse gas reductions and base load power supply. Secondary efforts will be through retail and wholesale plumbing, electrical and home improvement outlets to the home and business owner.
Operations
Hybrid water heaters will be assembled as specified by orders from existing subsystem suppliers (similar to the DELL business model) for manufacturing and inventory. Sales, marketing, maintenance models to be initially explored through the creation of partnerships with existing construction subcontracting electrical, plumbing and HVAC companies, tradespersons and existing wholesale and retail suppliers of electrical and natural gas systems. WE plan to explore the possibilities of partnering state by state with existing businesses for distribution and potential state by state assembly. of sub systems into HWH’s.
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This information may contain forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In some cases you can identify those so-called "forward looking statements" by words such as "may," "will," "should," "expects," plans," "targets," "believes," "anticipates," "estimates," "predicts," "potential," or "continue" or the negative of those words and other comparable words. These forward looking statements are subject to risks and uncertainties, product tests, commercialization risks, availability of financing and results of financing efforts that could cause actual results to differ materially from historical results or those anticipated. Further information regarding these and other risks is described from time to time in the Company's written communications or our web site and or with any filings with the SEC. We assume no obligation to update or alter our forward-looking statements made in this release or in any other document, whether as a result of new information, future events or otherwise, except as otherwise required by applicable federal securities laws.
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