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1-4
5-8
9-12
13-16
17-20
21-24
25-28
29-32
33-36
37-40
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53-56
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61-64
65-68
69-72
73-76
77-80
81-84
85-86
To put this in another perspective, the electrical output of 2-3 coal-fired power plants in FPL’s
inventory may be freed up for other use if SolarAttic’s hot water technology was deployed. Of
course, electric utilities are in the business of selling electricity. Therefore, there can be no
assurance that FPL or any other utility will find the Company’s technology to be beneficial for use
or promotion. The Company believes that even though the hot water technology will be beneficial
to utility companies, that the market itself will be decided by homeowners. The Company believes
that a hot water system can be produced that will pay for itself.
When coupled with PV cells, the Company believes the economics are present to create a fast
payback within the range of 5-10 years depending upon hot water usage and costs of PV cells. It
is feasible that a large amount of hot water can be built up during the day in storage and carry the
customer through to the next day with little or no electrical consumption for the tank’s elements.
Off peak electrical hot water has been pioneered by United Power Association in Elk River,
Minnesota. Two electrical hot water tanks are piggybacked and powered (charged) only during off
peak hours. The result is sufficient hot water and reduced electrical hot water costs. The same
concept can be used with solar generated hot attic air (heat energy). SolarAttic’s system would
charge (heat) the tanks during peak solar times. Another useful solar technique is to use
thermosiphoning, which could reduce the systems’ electrical needs even further. Regardless of the
final hot water system design that emerges, if and when it emerges, the Company views the electric
hot water heater market as a viable place for its patented new solar hot water technology.
Actual shipments of electric hot water heaters during 1996 have been estimated at 27,116
commercial units and 4,146,523 residential units by the National Gas Manufacturers Association.
Every one of these shipments is a candidate for the Company’s hot water technology providing that
an attic cavity or other suitable solar space exists to recover and use solar heat energy.
The Company demonstrated a working prototype of a hot water heating system at the Minnesota
State Fair during the period of August 25 through September 5, 1994 in St. Paul, MN. Hot air
was taken from the peak of the Home Improvement Building and it was readily transformed into
hot water using a simple “air-to-liquid” heat exchanger and a recirculating pump.
According to Manufacturing U.S.A. (1996 Edition), U. S. manufacturers of “Blowers and
Fans” shipped $3,513.5 million worth of product during 1996. Their estimate of market size for
1997 is $3,629.3 million and for 1998 it is $3,745.0 million.
The Company believes that a large share of its future revenues will be derived in this market
area. These revenues would be from both ventilation and space heating product sales.
The Company is aware that there is available substantive market information regarding
worldwide energy efficient and renewable energy technology markets (EERE). It should be noted
that the Company believes the EERE market is large. However, no effort has been made by
SolarAttic to obtain, analyze or segment EERE market data to determine how SolarAttic’s new
technologies might fit in. Therefore, no assurance can be made that all of the key market
information available for the Company’s products has been absorbed by the Company. And, due
to limited experience with the identified markets, no assurance can be made that the Company’s
products will actually be accepted into them.
The Company notes that some forecasts for future electrical energy needs in developing third
world countries state that electrical energy growth needs can only be filled by implementing energy
efficient and renewable energy technologies (EERE) like SolarAttic’s.
The Company’s web site contains several articles written about the Company and other useful
marketing information, which may be found at http://www.solarattic.com/BGinfo.htm. For
example, the Company has had articles written by several magazines including a September 1993
article, which appeared in Popular Science magazine.
The Company’s products will serve in four markets, which makes them a diversified line of
products. At the same time, these products are all located within the attic making them a focused
group of products. Diversified Yet Focused! The four markets are ventilation of the attic; space
heating; water heating; and, pool heating. The Company’s marketing strategies will need to
address this diversified yet focused group of products. The Company believes all of its products
share a synergy with one another and therefore can share some common marketing themes and
advertising messages. SolarAttic has trademarked its logo and name for use as a “Brand-Name
Identity.”
The Company has registered the above trademark and logo which is used on the Company’s
letterhead, envelopes and other documents. The Company believes that the logo is consistent with
its mission statement and provides the Company with a Brand-Name Identity!
The Company notes that if its products are accepted into the market place, several of them may
constitute paradigm shifts of one type or another. The nature of the Company's products therefore
lends themselves to product differentiation techniques used in marketing efforts.
SolarAttic’s marketing strategy is “Focused Differentiation” which is to say—our products will
be different. They will be “energy efficient” and “environmentally friendly.” The Company’s first
product focus was “low cost swimming pool heat.” The Company believes that, as this product
gains a foothold, established marketing forces will be turned upside down in “disequilibrium” as
the SolarAttic Pool Heater changes all the rules of doing business [heating swimming pools]. The
contrast will be dramatic: you can continue to pay $150.00 or more per month to use your natural
gas heater --or-- you can heat your pool for $11.00 per month with the SolarAttic pool heater. A
product that pays for itself in cost savings in a relatively short period of time. A “solar” heating
product that does not have “solar panels” on the roof! Using focused differentiation as a marketing
strategy, the Company will strive to point out the differences between the Company’s EERE
products and competitive [fossil fuel or panel] products.
The Company will also make use of the unique selling proposition (USP) “solar without
panels.” In the Company’s market studies, the number one objection to renewable solar energy
was simply: “I do not want solar panels on my roof!” Pointing out the Company’s unique solar
products means that market share will be taken away from solar panel systems as well as fossil fuel
heating systems. Consumer inquiries for product information indicate that this could be a strong
market differentiation. Roof panels have been found to strike a “very strong” negative response in
consumers. Symptomatic of this is the fact that many new home construction areas make attempts
to use “restrictive covenants” prohibiting the use of any roof solar panels [because they are “ugly
and obtrusive”]. This problem has become such an issue that Florida and Arizona have been
reported to have passed laws forbidding “restrictive covenants” that limit the use of solar energy
[panel] systems. The Company believes that long-term market forces favor SolarAttic’s inside-the-
attic solar heating systems, which do not pose any aesthetic problems.
A focused differentiation statement for the Ridge Ventilator would be: “The Systems Solution
To Attic Ventilation!” This could also be called a marketing positioning statement useful as a tag
line in all product advertising.
The pool market has high barriers to enter from a traditional distribution perspective. An
established distribution network has a firm lock on traditional sales through the pool dealer. The
swimming pool dealer is also reluctant to take on any new products because of a limited building
season. Many pool dealers also sell the pool as an annual vacation being paid at $200 per month.
When the question of heating the pool arises, they avoid the topic because it can lead into another
$150 per month to enjoy the pool [heat it]. Therefore, the Company believes it will have to go
direct to the pool owner initially to sell its pool heater. The Company has developed custom
databases to direct market this product until its dealer network approach fully develops.
The Company is also aware of new energy code issues in Minnesota that the space heater will
have to deal with. As of April 15, 2000, houses built in Minnesota will have to meet a new energy
code. The new code requires a tightly built house that is mechanically vented. Breaking the attic-
to-house vapor barrier which is typical when the space heater is installed may then be a Minnesota
building code issue. The Company will have to work through this issue and possibly others
before successfully marketing the space heater into areas with such energy codes. The Company is
uncertain as to the extent of such building codes nationally. There can be no assurance that the
Company will not encounter building code obstacles that prove costly to overcome.
At this time, the Company is unaware of any other special distribution issues that could be
problematic or costly. It is the Company’s intent to develop a proactive program to seek out and
educate building inspectors and officials concerning the Company’s new technologies. The
Company believes that this educational effort will alleviate many local building inspector concerns.
Company plans to get its products UL Listed will also help with building inspectors.
Swimming Pool Heating
Electric Hot Water Heating
$195 Million
$393 Million
5,014,770; 5,746,653;
5,014,770; 5,452,710;
5,746,653
Re.32,607; 5,014,770;
5,746,653
5,756,653
Although Minnesota’s new energy code may require some product installation adjustments, it
also presents some new product opportunities. Ventilation of the house is a key issue. The new
energy code strategy is “to build tight and ventilate right.” The new code requires mechanical
ventilation of the living space. That is because the house is sealed very tight and it is equivalent to
walking into a large plastic bag (literally). Without the introduction of fresh air, there would be
health problems. The ventilation of these homes is typically accomplished using an “air-to-air”
heat exchanger that brings in fresh outside air, periodically exchanging it and exhausting old air.
One opportunity the Company is exploring is a marriage of the Company’s technologies with
that of providing fresh air ventilation to the house. It is the marriage of the Company’s space
heating technology with that of the air-to-air ventilation technology required to provide fresh air
inside the house. The Company believes that this would create another new category of product in
the $3.5 Billion “Blowers & Fan” market that would be very useful in the new energy homes.
Free solar heat from the attic combined with fresh air, or preheated fresh air, for the house.
The Company’s space heater already collects outside fresh air, which is drawn in through the eaves
and heated by the time it is collected at the attic’s peak. The missing part is the exhaust provision
from inside the house and the internal house recirculating air system.
The Company has already approached a well-established Minnesota manufacturing company
that specializes in this air-to-air home ventilation technology. As a result, SolarAttic and this
company will be exploring this product concept further at some time in the future. The Company
believes such a product would be complimentary and synergistic with its other products. However,
there can be no assurance that such a product will ever be developed.
PR Effort $$
Direct Mail
DB Marketing
PR Fax & Web
Broadcast
WWW
Networking PR
& Databases
Telephone
Followup Calls
WEB Site
Resource
AD Agency
Advertising $$
This graphic illustrates the various marketing & sales elements that SolarAttic has in play or
plans to put into play in order to complete the Company’s cohesive marketing & sales strategy. All
elements are in place and working for the Company except the “Media Relations PR Effort $$” and
the “AD Agency Advertising $$.” Both of these elements are important to SolarAttic’s marketing
and sales efforts and both require additional capital resources to fully implement.