By Tyler Harbottle – Skanderbeg Capital Group

In the last six months I have seen an incredible amount of content written on energy efficiency.  Right now everyone is talking about “2010, The Year of Energy Efficiency”, or “2010, The Dawn of the Fifth Fuel.”  Well 2010 might be when mainstream investors start to queue in to the potential this opportunity offers, but 2009 laid the groundwork.  Last year, according to a Peachtree Green Advisors report, there were a total of “248 greentech mergers, acquisitions, and capital raises in the U.S.”  Of those 188 raises, 42% were in the Distribution, Storage, and Efficiency sector.  In the 2010 Green Biz Index, an annual GreenBiz.com report (from Greener World Media, Inc) measuring the state of the green economy, of the six measures deemed to be showing any significant progress, four were energy related (clean energy patents (patents issued by the US Patent Office), energy efficiency (energy use per unit of GDP), green IT (Number of products certified under Energy Star and EPEAT), green office space (LEED-certified commercial building space), with the remaining two success stories being paper use and water intensity).  Stats like these may continue to grow.  More importantly, in the next few years, firms seeking to capitalize on the growth in this sector will really start coming out of the woodwork.  A continued interest and flow of capital to this sector should put the smart investor, the consumer, and the business operator in a very advantageous position – not to mention the environment.

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When it comes to the environment, in my mind this much is certain:  The ecosystem services provided by nature are priceless; the air we breathe and the water we drink is vital; our lives depend on the health of our natural environment; yet carbon based fuels extracted from the earth continue to be essential and the subsequent use of them inefficient.

Five or six generations from now people may recount the facts of today, the history that you and I are currently contributing to, in utter disbelief.  They might wonder how and why we were able to extract and squander natural resources that took millions of years to produce, in mere centuries.  Our methods are outdated, our operations wasteful.

Don’t get me wrong, I’m all for human progress.  Some environmentalists fail to see the bigger picture and neglect our right to grow and prosper as a species on this planet.  But the fact is we’ve been living unsustainably for far too long.  It is becoming increasingly apparent to businesses big and small, governments and their electorate, and the investor public that anthropogenic climate change, environmental degradation, natural resource depletion, and air and water pollution have significant economic side effects, let alone moral and ethical implications.  There is finally an understanding that our resources are finite – if not nearly depleted. Our growing industries, our mammoth international and national transportation networks, and our energy needs have all but consumed the cheaply, easily, and safely accessible resources – and we have been trashing our natural environment in the process.

There is a new public understanding of these facts, perhaps stemming from the Al Gore-hyped climate change movement or just from a renewed rationalism.  This understanding (amongst other driving factors) has spurred a revolution that may prove to be as important as the industrial revolution that put us in this situation in the first place.  It is a green revolution but not of the same breed that is protesting the seal hunt or monitoring the duck population.  No, this particular revolution stems from a practical understanding of our natural resource dependency and our energy situation.  It is the cleantech revolution and it is being forged by a micro economy of venture capitalists, investment banks, and innovative startups.  This micro economy, the “green economy”, has led to an unprecedented investment of capital and expertise in alternative and renewable energy technologies.

Energy Efficiency

President Barack Obama, State of the Union Speech, 2010:

“I know there have been questions about whether we can afford such changes in a tough economy. I know that there are those who disagree with the overwhelming scientific evidence on climate change. But here’s the thing — even if you doubt the evidence, providing incentives for energy-efficiency and clean energy are the right thing to do for our future — because the nation that leads the clean energy economy will be the nation that leads the global economy. And America must be that nation.”

2009 brought with it the realization that our greatest and cheapest source of clean energy might just be the energy we don’t consume.  It isn’t found in geothermal wells, wind farms, photovoltaic collectors, or even nuclear power plants (though such technologies do show great promise).  Instead, using readily available technology, we can drastically reduce the amount of energy we consume on a daily basis.

Using innovative new means and some creative financing, energy efficiency upgrades are not only an avenue towards reduced energy consumption (and therefore reduced dependence on foreign oil, for you Americans), decreased environmental impact, and the abatement of carbon emissions; they are also a source of increased revenue.

The Lawrence Berkeley National Laboratory, in a 2009 report sponsored by the U.S. Department of Energy, states that through the implementation of energy efficiency measures “the median cost of conserved carbon is negative $110 per tonne.” This is absolutely imperative to understand: it actually costs less to emit less.  This is so important, so irrefutably obvious that it might even bridge the growing gap between climate change naysayers and their environmentalist counterparts.  I don’t care if you don’t believe in global warming.  I don’t even care if you have never once considered your impact or your company’s impact on the environment.  With stats like this – with potential savings like this – you’re not just being environmentally irresponsible, but fiscally negligent.

In a 2009 paper, the Center for the Study of Energy Markets, argues that, “energy represents 30 percent of operating expenses in a typical office building; this is the single largest and most manageable operating expense in the provision of office space.” Energy efficiency upgrades are readily achievable, yet businesses have been remarkably slow at embracing them.

There are two reasons business operators need to jump all over this opportunity now and, like it or not, neither of them are environmental.  The first is simple: if energy costs are an input factor in your business, you will not be competitive if you don’t slim down and reap the savings of energy efficiency upgrades.  The second reason is slightly more complex and not as certain: today we are seeing significant public funding for energy efficiency measures including grant programs and tax incentives, but will this funding dry up? And when or if it does, what policies or legislation will take its place?  Some have suggested that incentives will be displaced by disincentives – where it will become prohibitively expensive to emit and to consume excessively.  This is all the more reason to act early.  Upgrading to a more energy efficient system will serve to insulate you from any future price fluctuations – and there are sure to be many.

Economies have already started to reduce their reliance on fossil fuel intensive energy.  In the near term this will have one immediate and unintended affect: an increase in energy costs.  Due to the fact that most clean energy sources continue to cost more than their fossil fuel counterparts, prices will rise.  This fact may change in short order, but to insulate your business from such uncertainty, increasing your energy efficiency levels is a no-brainer.

3 Interesting Companies on the Energy Efficiency Radar

• Vu1 Corporation
• Carmanah Technologies Corporation
• Greenscape Capital Group

Vu1 Corp (OTCBB:VUOC)

Seattle-based Vu1 Corporation has developed and is in the process of implementing a new type of energy efficient light bulb, the Electron Stimulated Luminescence (ESL) bulb.

“ESL Lighting Technology uses accelerated electrons to stimulate phosphor to create light, making the surface of the bulb “glow”.  ESL Technology creates the same light quality as an incandescent but is more energy conserving.”

By some estimates, lighting accounts for 22% of America’s electricity consumption.  Energy efficient lighting technology has huge implications for the energy efficiency sector and the green economy as a whole.  Without an extremely efficient method of lighting our cities, our homes, and our roads, no significant progress can be made on this front.

So far consumers have been presented with essentially two alternatives to the outdated and inefficient incandescent light bulb: the Compact Florescent Light (CFL), and the Light Emitting Diode (LED).  How CFLs were ever considered to be an environmentally responsible alternative, I will never understand.  It is a band-aid solution at best and an environmental catastrophe at worst.  CFLs contain highly toxic mercury and must therefore be recycled with great care.  There is a growing concern that mass adoption of CFLs will eventually mean mass disposal as well.   Such a scenario would have disastrous consequences for our ecosystems and our ground water.

LED lighting is the second option available.  LEDs have proven to be remarkably efficient and have recently seen wide acceptance and implementation across various applications.  They are, however, not without setbacks.  LEDs, firstly, are very expensive.  Though the potential for energy savings is huge, they are often seen as simply too expensive to install.  Additionally, LEDs throw a very blue, cold toned light that is unacceptable for certain applications; they may never be fully accepted as a traditional means of lighting homes, museums, galleries, or any other space that requires a natural, soft lighting.

Vu1, on the other hand, has recently demonstrated its first non-hazardous ESL prototype.  Fully dimmable, mercury-free, instant-on reaction, highly efficient, economically priced (targeted), and with an attractive light tone, Vu1 may have found the long term, environmentally and economically sound, solution to a nagging energy efficiency issue.

Carmanah Technologies Corp (TSX.V: CMH)

A Victoria, BC-based manufacturer of solar technologies, Carmanah delivers “cost-effective and long lasting solar products for general illumination, marine, aviation, traffic, and solar power applications.”

Most importantly, though, Carmanah is Canada’s largest supplier of “grid-tie” solar systems.  Grid-tie solar power is important in Canada due to a new initiative led by the Ontario Power Authority called the Feed In Tariff program (FIT).  FIT is “North America’s first comprehensive guaranteed pricing structure for renewable electricity production,” offering compensation for energy generated from renewable sources, like solar.  This is a big shift in the energy production/consumption market.  With the FIT program, not only is it economically beneficial to reduce your energy consumption, you will be handsomely rewarded for any clean energy you can contribute to the grid.  This is a double incentive to retrofit and Carmanah has the right products for the job.

Greenscape Capital Group (TSX.V: GRN)

Vancouver, BC-based Greenscape Capital Group has developed an interesting revenue model for energy efficiency upgrades.  While Carmanah and Vu1 are product based and technology focused, Greenscape is a turnkey solutions provider, a facilitator of upgrades, and a one-stop-shop for greater energy efficiency.

While energy efficiency upgrades make perfect sense for almost any operating business, most business owners want to know exactly what upgrades will mean for their bottom line.  Few businesses will gamble with untested retrofit models.  It will be seen, instead, as less risky to just continue with business as usual.  Likewise, many business owners will be unwilling to foot the upfront capital costs associated with the upgrades, regardless of the future energy savings to be had.  This is where some creative financing and a little innovation come in to play.

By financing the upfront capital needed to implement retrofits and taking a percentage of the savings over time, Greenscape essentially eliminates any possible barriers to achieving greater energy efficiency.  Additionally, their method is well established.  It is tried and tested and has already proven to make sense for businesses and financiers.  This is precisely the type of model that business owners and operators can easily embrace and with advances in energy efficient technologies, revenue to Greenscape may continue to increase, and capital requirements decrease.

The political climate now, especially in the U.S. is such that we are starting to see federal or state run programs offering interest free loans for energy efficiency measures, such as the PACE program (Property Assessed Clean Energy Program) adopted by 17 U.S. states so far.  Such programs, however, may find themselves bogged down in traditional bureaucratic squabbling.  In the meantime, though, there is a remarkable opportunity for a smart few that manage to find a way to overcome this barrier and Greenscape Capital is a first-mover on this.

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As energy prices rise, so to will the market and the demand for energy efficiency expertise.  Those companies responsible for laying the foundation of the energy efficiency market in years past will be well positioned to take full advantage of this coming boom.  To be sure, the offshoot startups that spring up midway through this cycle may struggle to succeed; proven energy saving technology and a revenue model to back it up are essential, but the market is ripe for some real innovation.  The green economy has proved its staying power by weathering the economic storm of the last two years, but rest assured, if the proof of the pudding is in the eating, these three companies make excellent ingredients.

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Tyler Harbottle works as a communications strategist for Greenscape Capital Group (TSX.V:GRN) and for other associated public companies at Skanderbeg Capital Group.  He has an ongoing mandate to seek out new and interesting companies – especially those operating in the green economy – and to educate the public on current and upcoming developments in the fields of energy conservation and efficiency, renewable energy, and sustainable development.

By Tyler Harbottle

December 21, 2009

Richard Branson has announced his intention to partner with the City of Vancouver and Mayor Gregor Robertson to battle carbon emissions.

There appears to be no boundaries to Richard Branson’s business genius, his innovative thinking, nor his philanthropic ventures.

He generates an unsurpassed excitement and intrigue around nearly every venture he sets his mind to.  Through the multitude of Virgin brands (now numbering more than 200), Branson coordinates an extensive network of visionaries. In scope and in scale, Branson has a truly global reach.

The common thread, intricately woven throughout each initiative, is Branson’s extraordinary ability to identify and harness the power and passion of entrepreneurship.  This conviction – this well established ideology – runs strong throughout the organization, but, arguably, where it runs strongest is in the various philanthropic ventures of the Virgin family.  Branson sees market and profit driven incentive as powerful impetus for change and has conceived several successful non-profit enterprises in that vein.  Branson’s philanthropy has tackled the most pressing issues of our time – the mega-problems of the world; poverty, hunger, disease, environmental degradation, and, of course, climate change.

Under the Virgin Unite brand (a non-profit), Branson has launched the Carbon War Room - a climate change solutions initiative which harnesses “the power of entrepreneurs to implement market-driven solutions to climate change.”

The Carbon War Room:

“Our global industrial and energy systems are built on carbon-based technologies and unsustainable resource demands that threaten to destroy our society and our planet. Massive loss of wealth, expanding poverty and suffering, disastrous climate change, water scarcity, and deforestation are the end results of this broken system.

This business-as-usual system represents the greatest threat to the security and prosperity of humanity – a threat that transcends race, ethnicity, national borders, and ideology.” — Carbon War Room

With this particular initiative in mind, Branson identified Vancouver Mayor Gregor Robertson as a leader and an entrepreneurial catalyst for change.  The two met at the 2009 United Nations Climate Change Conference in Copenhagen and have since agreed to develop a common battle plan.

Robertson, a visionary in his own right, has pioneered a one-of-a-kind economic development plan: Vancouver Green Capital.

“The “Vancouver Green Capital” brand is at the heart of the creation of a robust, long-term economic strategy that will guide the City’s pursuit of economic opportunities around the world…Green companies are those that understand that their bottom lines include people and planet, as well as profit. Some of the world’s biggest and most progressive companies have understood that “green” is no longer a “nice-to-have”: it’s integral to doing business.” — Vancouver Green Capital

Through this initiative, and in seeking to become the world’s greenest city by 2020, Robertson hopes to attract the great environmental entrepreneurs of the world and, like Branson, harness the spirit of innovation to realize positive change.

Branson’s Carbon War Room initiative and Mayor Robertson’s Green Capital development plan are mutually complimentary; both leaders have realized the important role that a committed network of innovators, small, medium, and large businesses, individuals, entrepreneurs, institutions, and governments will play in the development of a greener future.

This grand battle plan starts at the city level.  In fact, it starts with Vancouver.  Branson and Robertson will officially launch the initiative at the Vancouver 2010 Winter Olympic Games.  Robertson hopes to capture the “robust business development” of the Olympics and capitalize on the international attention sure to be paid to Vancouver during the games.

A key focus in this effort to cut global emissions, as identified by the Carbon War Room’s Vancouver Operation (.pdf), will be accelerating the market for energy efficient buildings and energy efficiency upgrades.

“The building sector represents the largest opportunity for non-disruptive cost-effective change. Redesigning and retrofitting buildings for energy efficiency and sustainability could readily eliminate 5 billion tons of CO2e, or 10% of current emissions, per year by 2020 – while creating millions of new jobs.” — Carbon War Room, The Vancouver Operation

Branson is actively seeking out new business models that can adequately address fundamental barriers in the market for energy efficiency.  The Carbon War Room identifies “high upfront costs for consumers, inconvenience of retrofits, lack of consumer information, and the principal-agent problem” as prevailing market failures.  Conquering these challenges and building a successful model of “attractive financing and incentives for energy efficiency” will be the primary battle ground for this War on Carbon and the pioneers and innovators who lead the charge will be handsomely rewarded.

So who are the soldiers in this war? Who are the innovators and pioneers? What business models are out there that successfully circumvent the identified barriers to change?

Enter Greenscape Capital Group. A publicly traded (symbol GRN on the TSX venture exchange), Vancouver based environmental start-up,  Greenscape Capital fits the Branson/Robertson initiative perfectly.

Greenscape owns and operates Green.Switch Capital, whose innovative business model is designed specifically to overcome the number one barrier to realizing vast energy savings: upfront capital costs.  Green.Swtich covers the bill for the assessment and installation of energy efficiency upgrades and derives its profit from a percentage of the energy savings over time.

This is precisely the type of eco-innovation that Branson’s Carbon War Room initiative will need if it is to achieve its goal:

Branson is seeking to retrofit 10 million buildings worldwide by 2013 and achieve a 5 billion ton reduction in CO2 emissions by 2020 through energy efficiency measures alone.  By starting with Vancouver, already North America’s greenest city, Branson hopes to lead the way for others to follow.

“We must defeat this enemy. We know we have the technologies, the tactics, and the people to do it. What we need is fewer pronouncements and more leadership.” — Richard Branson, New York Times Op-Ed

It seems as though Branson has found his leadership in Gregor Robertson and if Greenscape Capital Group is any indication of the eco-entrepreneurial spirit of Vancouver, he has also found the perfect stage to wage his global war on carbon.

Those of you operating businesses in Vancouver, BC will be very familiar with the Business in Vancouver publication.  They’ve been operating for 20 years and provide a good source of local business intelligence and news.

Skanderbeg portfolio company, Greenscape Capital Group (TSX.V: GRN) has been featured in their most recent publication.  Author Nina Winham gives a good overview of what’s quickly becoming a massive market for energy efficiency upgrades, the cornerstone of the Greenscape operation.

By Tyler Harbottle – Skanderbeg Capital Group

Recently Skanderbeg Capital CEO Bryan Slusarchuk spoke at TEDx Vancouver – a locally organized sub-conference of the famed TEDtalks.  Bryan was chosen to speak amongst several well-known environmentalists not because he has a long history of hugging trees, staging sit-ins, protesting for animal rights, or going head-to-head with Japanese whaling boats.

No, Bryan was chosen to speak at TEDx Vancouver because of a realization he has come to.

We’re all thinking about it.  We’ve been thinking about it ever since Al Gore stood atop a Skyjack Hydraulic Scissor Lift and so dramatically expressed our impending doom.  We’re suffocating ourselves in CO2, he says.  Well Gore or no Gore, our environment is in trouble.

A few savvy investors here and there, however, have come to the same realization that Mr. Slusarchuk has come to:

It’s becoming very obvious that amidst the dismal environmental situation we currently find ourselves in, there are some exceptional investment opportunities to be had.  And those investments — those innovations — may just be the source of a total transformation in how we operate on this planet.

And as it turns out, the same mindset — the same type of innovative thinking — that holds the solution to some of our environmental problems, might also haul our economy out of recession.

So I want to outline the key reason why we at Skanderbeg Capital are viewing the environmental crisis and the corresponding quest for solutions with optimism….

Via Greenscape Capital Group and its subsidiary Green.Switch Capital, Skanderbeg’s primary point of interest is in an emerging and lucrative market for energy efficiency upgrades.

The energy efficiency market

Recently, McKinsey & Company posited the following question in a Quarterly Report titled Unlocking Energy Efficiency in the U.S. Economy:

“How is it that so many energy-saving opportunities worth more than $130 billion annually to the U.S. economy can go unrealized, despite decades of public awareness campaigns, federal and state programs, and targeted action by individual companies, non-governmental organizations, and private individuals?”

After an extensive 2008 U.S. energy efficiency analysis, McKinsey came to the following conclusions,

“If addressed in a holistic and comprehensive manner, energy efficiency offers a “vast, low-cost energy resource for the U.S. economy.”

McKinsey estimates that with such an approach, an initial investment of $520 billion through the year 2020, would yield energy savings of more than $1.2 trillion.  This would result in an estimated reduction in end use energy consumption by 9.1 quadrillion BTUs, or 23% of projected demand.

A 23% reduction in energy consumption would mean “potentially abating up to 1.1 gigatons of greenhouse gases annually.”

This would have a truly global consequence.

In another study, this one done by the Environment America Research & Policy Center in 2008, it was concluded that a staggering 10% of GLOBAL energy consumption is from American buildings alone.  They state, “energy efficiency is the cheapest and cleanest way to increase our energy productivity,” noting that it would cost about “$42.1 billion to gain one quad [quadrillion BTUs] of energy through residential and commercial building efficiency” whereas to deliver an equivalent amount of energy production from the building of coal power plants, it would cost $122 billion and $222 billion for Nuclear power.

So as it turns out, the greatest source of clean energy is not from solar, wind, or even nuclear.  It’s from using LESS energy. To quote Thomas L. Friedman, “The cheapest, cleanest, non-emitting power plant in the world is the one you don’t build.”

This type of analysis is even more applicable to the Canadian economy.  We northerners try our very best to huddle along the 49th parallel, but the fact is we spend about 90% of our time indoors.  It’s cold outside.  It has been suggested that 1/3 of all Canadian energy production goes to the heating, cooling (yes cooling, sometimes), and lighting of buildings.  Not to mention 50% of our natural resources.

The savings potential is enormous.  A study done in October 2003 titled The Costs and Financial Benefits of Green Buildings, by Greg Kats, revealed the potential total life cycle benefits of “greening” an existing building is upwards of six dollars per square foot.  Kats presents a 20 year average present value savings of $5.79 per square foot.  By this estimate, an average sized industrial building of 100 000 square feet, over a 20 year period, would provide savings of nearly $580 000.

The general population has been completely oblivious to this realization.  However, in all fairness, there is at least one significant barrier to all of these upgrades and the subsequent savings: initial capital costs.  For the most part, people want to do their part in reducing our impact on the planet.  Business owners want to be able to advertise their energy efficiency, their ‘green’ business, and the cost savings to be passed down to their customers.  But for most business owners and, indeed, for most homeowners, the upfront cost of upgrading HVAC systems, interior and exterior lighting, hot water systems, windows, and insulation, is just too much.  Even considering the future cost savings to be had, money is tight these days.  And, as the adage goes, it costs money to make money.  Well in this case, sometimes it even costs money to save money…

There are some instances, however, when the capital cost is negligible, if not nothing at all.  Often an energy efficient upgrade can be implemented when regular maintenance or renovations would occur anyway.  A recent Rocky Mountain Institute report suggests that an energy efficiency upgrade which yields savings of more than 50% can often be LESS expensive than saving nothing.  This is because “costly capital equipment (such as air conditioning) can often be made smaller or even eliminated.”  In other words, it costs more to save less!

For example,

The renovation of a 20-year-old 200,000-ft2 curtain-wall office tower near Chicago, offered a
design energy saving of 75% at a slightly cheaper cost than the routinely required renovation that
saved nothing.

The fact is, most buildings built today will still exist in 10, 20, and 30 years and hardly any of them are energy (and therefore cost) efficient.

Next week the worlds leaders will meet in Copenhagen for the United Nations Climate Change Conference.  Whether you believe in anthropogenic climate change or not, governments around the world will should be searching far and wide for the most efficient ways of reducing energy consumption.

Earlier this year Lawrence Berkeley National Laboratory, sponsored by U.S. Department of Energy, published a report titled Building Commissioning: A Golden Opportunity for Reducing Energy Costs and Greenhouse Gas Emissions. They posited that as a result of the drastic energy savings resulting from the “commissioning” of existing buildings “the median cost of conserved carbon is negative— -$110 per tonne.”  In other words, by this method, for every tonne of carbon we don’t emit, we SAVE $110.

This is something that even the most incredulous of climate change skeptics can embrace because it’s not just about climate change. Though the current political atmosphere is go go go CO2 reductions, the energy efficiency market is attractive for more than just it’s GHG promises. It’s about energy conservation.  It’s about peak oil and fossil fuel depletion.  It’s about innovation in the face of a wobbling economy.  And it’s about capitalizing on a growing trend of “green” investors.

Now, besides the fact that energy efficiency retrofitting (or “commissioning”) offers a vast source of emissions-free energy, massive potential savings, and the most cost effective strategy for reducing GHG emissions – it also represents an enormous investment opportunity…

There are two major reasons we are excited about the investment potential:

1. Someone has to fund the retrofits, and
2. Someone has to implement the retrofits

And Green.Switch does both.

I’ll explain using a hypothetical example that represents a classic Green.Switch retrofit project.

The Green.Switch Model

Scenario:

“123 Parking” is an aggressively expanding parking garage, but is in a heated competition for customers with “ABC Parking”.  They’re looking for ways to decrease their capital costs so they can reduce parking prices and therefore grab a bigger share of the market.

123 Parking realizes three things:

1. their biggest capital cost is in lighting,
2. their lighting system is grossly outdated and extremely inefficient, but
3. they don’t have the extra capital to spend on an upgrade.

123 Parking is a perfect fit for the Green.Switch model.  For no upfront capital cost, Green.Switch will initiate a full service retrofit – right from the assessment all the way through to installation and ongoing monitoring.  123 Parking even gets consultation on how to re-brand themselves as a ‘greener’ alternative to ABC Parking.

Green.Switch, under this particular retrofit package, will take an agreed upon percentage of the energy savings value until the financing costs are paid.  Thereafter, the percentage Green.Switch takes decreases on a sliding scale until eventually 123 Parking keeps 100% of the energy savings from the retrofit.

123 Parking is now the greenest parking lot in the city, has increased it’s bottom line significantly, and now has the ability to grab that extra portion of the market by passing the savings on to customers.

This is a win, win, win situation.  The environment wins because 123 Parking is using less energy.  123 Parking wins beacuse they’ve increased their bottom line.  Green.Switch wins because they’ve garnered a percentage of some significant energy savings.

Huge Potential

Now remember, there is thought to be over a trillion dollars in energy savings out there in the U.S. alone. The political atmosphere is such that this will only gain further momentum.  As economies are increasingly moving away from fossil fuel reliance the price of electricity is set to go up.

Companies can realize energy savings now and better insulate themselves from price fluctuations in the future.  But the point is, they don’t have to fund this change themselves.  The burden of capital costs can be completely unloaded on a company like Green.Switch.

The revenue model is brilliant, the upside is obvious, there’s no risk to the consumer, and the market is ENORMOUS.

Greenscape Capital Group owns 100% of Green.Switch.  It trades on the Toronto Venture Exchange under the symbol GRN.

Last week Greenscape Capital Group announced an LOI to acquire 100% of the environmental consulting firm Green.Switch Capital.  Today, anyone who receives email updates from Greenscape, received the following letter from Greenscape Director and Canadian Certified Environmental Practitioner, Michael Hofer.

Michael addresses the environmental audit and retrofitting industry and explains how companies can benefit from engaging in it.

Good morning everybody.

As you likely have noted, Greenscape is making exceptional progress corporately and fundamentally. Since IPO, we have issued the following News Releases;

1.)    Former Leader of the Green Party of British Columbia, Christopher Bennett joins Greenscape as Senior Advisor, October 28^th

2.)    Portfolio Company Update with the Strong Performance of the Various Portfolio Companies Noted, November 3^rd

3.)    LOI to Acquire 100% of Green.Switch Capital Group, November 5^th

The above has all been announced within the first 11 days of  trading.

Within the body of the Green.Switch announcement, we note that two new major environmental (energy retrofit) contracts have  recently been signed. The first is with Robbins Parking Services which is Canada’s second largest parking management company and the second is with the world renowned salmon fishing resort, Queen Charlotte Lodge. The initial phase of the Robbins contract is now underway.

With this major acquisition, I offer a few comments about the environmental retrofitting industry. Although many people don’t know exactly what entry into this space entails, I assure you this is not a small potential market. In fact, the President of the United States recently remarked, “Every major building across the country could use retrofitting, which would create jobs and put people to work.” The administration went on to describe the retrofitting business in North America as one of the greatest business opportunities that the country has had in its history. Green.Switch, as first movers in a unique form of full-service retrofitting, is perfectly positioned to benefit from this massive movement.

Here are a few things to know about retrofitting;

What Exactly is a Retrofit?

Most businesses are using antiquated systems and equipment to power their operations. Through this use, they are spending dramatic amounts of money on monthly energy bills and that’s simply not necessary. However, these business owners generally don’t have the time, inclination or in-house expertise to upgrade these systems. That’s where Green.Switch enters the picture. The Green.Switch team of environmental professionals analyzes power consumption, makes recommendations for change, implements these changes (putting new mechanical systems and technologies in place) and then monitors the systems over time. When necessary, Green.Switch can also access financing for businesses that want to undertake this process. The payback for the business operators is due to significant monthly energy savings while Green.Switch generates revenue at every stage of the relationship cycle. In addition to retrofits of energy systems, Green.Switch also provides other environmental consulting services to companies who wish to green their operations aiming to improve issues related to packaging and waste all the way through to triggering savings through increased efficiencies in transportation.

Why We Do It

Energy issues today are not only essential to consider from a financial point of view, they have become the essence of social responsibility. When a company decides to make the green choice and retrofit their operations to improve energy efficiency, a classic “triple-win” scenario occurs. The company making the decision wins because of the dramatic energy savings, Green.Switch wins because it is a high-margin business and the environment wins.

What This Means Financially

Dramatic energy savings means huge costs savings and increased bottom line results for Green.Switch customers. In addition to the cost savings, customers also benefit from a marketing perspective by differentiating themselves more environmentally responsible than their competitors. The Green.Switch business model is designed to target revenue for Green.Switch during every step of the process; from assessment all the way through to installation and monitoring. It is important to understand that Green.Switch is much more than simply a consultancy firm. Green.Switch is a solution provider and completes the physical retrofits that transform their customers into more energy efficient operators.

The Process

Green.Switch’s complex weave of managerial expertise, finance, government incentive methodology, site assessment, acquisition (pricing) of materials, installation, branding (publicity benefits of social responsibility) and long-term management is unprecented in this space. As such, Green.Switch has achieved first mover status. The Green.Switch turnkey solution for businesses desiring to green their operations is as follows;

-Assessment

-Acquisition of Materials

-Financing Improvements

-Contracting and Installation

-Management and Maintenance

-Branding and Public Relations

We look forward to keeping you updated as Greenscape continues to make fundamental corporate progress.

Regards,

Michael Hofer, Canadian Certified Environmental Practitioner

Greenscape Director