A startup company in Orono is trying to convince mid-size businesses and institutions in New England that they can save money by converting from heating oil to wood pellets without buying any fuel or equipment.
The concept is intriguing, but some observers in the pellet-fuel industry say Pelletco LLC faces challenges to perform on a large scale over time.
High and volatile oil prices have commercial users looking for alternatives. The next year or so will help show whether selling just heat, rather than fuel and equipment, is a viable option in Maine.
Pelletco brings a wood-pellet boiler and a storage building, called a HeatPod, to a client's business, sets it up outdoors and connects it to the heating system. Pelletco operates and maintains the unit. The client pays only for heat, buying BTUs at a price that's nearly 20 percent below the cost of oil. Pelletco says it has 11 HeatPods installed.
The 3-year-old company has an ambitious growth plan. Financial material obtained by the Portland Press Herald shows that Pelletco, which expects to lose $366,125 this year, is seeking investors to transform it into a break-even energy-services provider with $3.5 million in earnings. That would require hooking up about 80 new customers by 2016, the company acknowledges.
The company has the support of a key lender for renewable energy that sees enough potential in the plan to provide seed capital; but its business plan has drawn a cautious response from more established members of the state's pellet-fuels industry.
For the complete report
The concept is intriguing, but some observers in the pellet-fuel industry say Pelletco LLC faces challenges to perform on a large scale over time.
High and volatile oil prices have commercial users looking for alternatives. The next year or so will help show whether selling just heat, rather than fuel and equipment, is a viable option in Maine.
Pelletco brings a wood-pellet boiler and a storage building, called a HeatPod, to a client's business, sets it up outdoors and connects it to the heating system. Pelletco operates and maintains the unit. The client pays only for heat, buying BTUs at a price that's nearly 20 percent below the cost of oil. Pelletco says it has 11 HeatPods installed.
The 3-year-old company has an ambitious growth plan. Financial material obtained by the Portland Press Herald shows that Pelletco, which expects to lose $366,125 this year, is seeking investors to transform it into a break-even energy-services provider with $3.5 million in earnings. That would require hooking up about 80 new customers by 2016, the company acknowledges.
The company has the support of a key lender for renewable energy that sees enough potential in the plan to provide seed capital; but its business plan has drawn a cautious response from more established members of the state's pellet-fuels industry.
For the complete report
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