(MENAFN- ProactiveInvestors - UK) Inspirit Energy PLC (LON:INSP) is a micro-cap specialising in combined heat and power boilers that have the potential to lop thousands of pounds off household and business energy bills
Led by City financier John Gunn, the company recently completed a rather modest 750,000 fundraising and is now putting the pedal to the metal commercially.
Its technology, called the Inspirit Charger, is dishwasher-sized, floor-mounted and, on cursory inspection, probably not too dissimilar to the larger units offered by Potterton, or Worcester Bosch.
Inside is where it differs from these traditional appliances, for sitting beneath the boiler is the Stirling engine, which generates the electricity.
It uses the inert gas helium as its driver, so there is no combustion inside the engine. This keeps wear and tear to a minimum and means the sealed unit has a 100,000-hour life with little or no maintenance required.
'We are leagues ahead in terms of maintenance costs, which are incredibly low,' chief executive Gunn said.
The Charger's output is a best-in-class 3 kilowatts of electricity, which is worth around 2,600 to the user without a feed-in tariff or a further 4,500 with the government incentive.
'The competition only works with a tariff,' said Gunn. 'Ours [the Charger system] is economic without it.'
That's because the electricity output from the unit is roughly triple the amount generated by the current offer of micro-CHPs out there in the market.
This in itself should be a unique selling point.
Then there's the green angle. The efficiency of the system is 93%. So for every 10 units of energy put in more than nine units of power come out the other end.
Contrast that with traditional power stations, which convert roughly 35-40% of latent energy of coal into electricity.
The cost per kilowatt hour of output from the charger is just over tuppence, a saving of 11p over conventional sources.
The sticker price, initially at least, might be a little off-putting. The Charger is expected to retail at 11,500 fully installed versus a traditional boiler, which comes in at around a third of that price.
As the production run increases so the unit costs will come down to more competitive levels.
As it currently stands, there is the option to acquire this money-saving device on finance.
Alternatively, the customer gets the unit for free by signing up to a gas and electricity contract offered by one of its partners or lease the appliance directly from Inspirit.
'This is a similar model to that use by the solar and wind [industries],' said Gunn.
'Their payback is seven to ten years, ours is three to four.
'The lease finance model is a strong point as the consumer does not end up paying the high capital cost up front.'
Inspirit is currently concluding the certification process for its state-of-the-art boilers before releasing ten units for commercial use with 'high-end customers'.
The routes to market are the obvious ones via the utilities, energy savings consultancies and housebuilders. The company is also planning to have an e-commerce presence.
It has said it will sell between 1,200 and 1,500 units in its first year of commercial production, rising to 3,000 and then 5,000.
That may sound a lot, but it is only a tiny proportion of the replacement market, which here in the UK is 1.6mln boilers a year. Yep. Big, right? For Europe as a whole, the number is closer to 9mln.
Investors are aware the company, which expects to break even in the financial year 2017/18, will need to tap the market when it goes into full-scale production.
At that point, the share price, which values the business at less than 5mln, should more accurately reflect the huge potential of Inspirit.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.