Alternative-energy stores: how 3 of the fittest survived
North Pembroke, Mass.
Jim Jenkins, president of Cambridge Alternative Power Company (Capco), flips open his phone book to the listings for alternative energy. ''This is what's happened,'' he says with solemn face, and begins to slice his pen through display ads that proffer solar systems, wood stoves, and windmills. ''Power Solar Engineering, gone . . . Suncorps Inc., out of business . . . Sippican Solar, folded.''
When he's through crossing off his former competition, Mr. Jenkins's phone book represents a testament on the state of alternative energy in the US: survival of the fittest.
The outlook has not always been so grim. Back in the days of the gas crisis of 1978-79, alternative energy was a booming business. Energy ''supermarkets'' - stores that sold everything from toilet water savers to multifuel boilers - sprouted up everywhere. But during the past two years, with the world swimming in oil production and American interest rates soaring, these same energy stores have hit hard times. Many have closed.
Three survivors of the alternative-energy crunch - Russ Mullica, president of Energy Alternatives Inc. of North Pembroke, Mass., James Johnson, president of Johnson & Sun Company of Tulsa, Okla., and Mr. Jenkins of Capco - told the Monitor why they continue to be successful and hold a bright outlook for alternative energy.
For Capco, of Cambridge, Mass., weathering the past two years has meant toning down the high goals of earlier days and concentrating on practical, profitable products. ''We've had to be hard-core businessmen,'' said president Jenkins. In front of his store stands a 90-foot windmill, what has come to be the symbol of Capco and a landmark for the area. But, said Jenkins, ''Windmills weren't selling, so we got rid of them.''
Many alternative energy businesses have been forced to cater primarily to middle- to upper-income classes. Jenkins said, ''No matter how idealistic we were in wanting to sell to a large populace, we had to survive - and that meant selling top-quality, relatively high-priced equipment.''
Mr. Johnson says the key to success for his company, which is the largest alternative-energy business in Oklahoma, has been to ''present a professional image and carry top-of-the-line equipment.''
All three company presidents emphasize the need for a deep-rooted commitment to the cause of alternative energy. Mr. Mullica said, ''Sure I'm in this business to make money. But the reason why I put up with 18-hour days, constant aggravation, and shifting markets is because I believe in the cause: that we don't have a choice in this country, we must move to alternative energy.''
Johnson says that in many of his failed competitors ''there was a lack of commitment,'' which meant many firms were undercapitalized, had poor business practices, and inadequate training. Mullica added: ''There were a lot of people trying to make a quick buck; now they're all gone.''
Mullica maintains that his store's continuing success (company sales have increased each year) has been due to a willingness to diversify and ''be innovative enough to get into newer products.'' That has translated into focusing on solar energy and multifuel burners, while cooling down his earlier emphasis on wood-burning stoves.
Four and five years ago, he says, the energy crisis spurred many consumers to acquire wood stoves. But many have come to dislike the inconvenience and mess of having to store and feed wood and coal into a stove.
According to the store presidents, continuing advancements in technology also give a bright tinge to the future of alternative energy. Mullica points to the new geothermal energy systems, which he calls ''the wave of the future.''
These systems, which have enjoyed wide popularity in Sweden, draw heat by circulating water in underground pipes. The system usually recoups its $12,000 cost within three to five years, Mullica claims, and ''it supplies a home's entire energy needs without using any fossil fuels.''
Another of Mullica's newest additions is highly efficient hot water heaters. Recent technical advances have enabled US distribution of water heaters that lose, the maker maintains, only 2.7 degrees of heat per 24 hours (the normal water heater loses about that much heat in a single hour).
At Johnson's store in Tulsa, a recent breakthrough in wind technology has led to a boom in windmill sales. The makers say the new wind generators give eight to 10 times more kilowatts per month - enough to satisfy the average customer's entire electrical needs - and it costs $10,000 less than any previous generator of comparable output.
After a poor first quarter financially - which he says was the result of the recession's finally affecting oil-rich Oklahoma - Johnson looks for a long upswing in business. A chief factor to his renewed confidence is the recent enactment of a 35 percent solar tax credit by the Oklahoma Legislature. That gives the residential customer a whopping 75 percent credit when added to the existing federal credit.