Your Next Big Thing: Growth Market—Energy Conservation

Written by ProfitGuide Staff

Surging prices have given Canadians a powerful motive to conserve energy. Oil is at US$60 a barrel, up 25% in a year; the Canadian Gas Association predicts natural gas prices will jump 20% to 50% this winter; and Ipsos-Reid reports that 51% of Canadians worry there’ll be oil and gas shortages in the next five years.

Where are the opportunities to help people conserve? Federal grants to homeowners for energy-efficiency upgrades (averaging $840) have vastly expanded the market since their 2003 debut. In the year ending June 2005, 18,000 Canadians upgraded, versus just 664 in 2002. The price run-up is now fuelling demand for high-efficiency furnaces, insulation, weatherstripping, doors and windows, says Steve Filliotis, president of Toronto-based Pro Home & Building Inspections Inc. But not every consumer will rush to upgrade: Wayne Beamish, president of Ottawa-based Energyshop Consulting Inc., says payback periods are often five or more years, too long for most people to bother.

Business is a better target, as some firms spend tens of thousands of dollars per month on energy, and typical payback periods are shorter. Beamish knows a retailer that’s replacing its fluorescent lights with $64 energy-efficient tubes that put out as much light and save $25 per year on electricity. He advises supplying parts or raw materials to makers of energy-efficient products rather than entering the crowded fields of making them or doing energy audits.

Beamish also sees an opening for electricity-conservation consultants. They might show factories how to stagger machine startups to avoid demand spikes that send power bills soaring; shift usage to overnight hours when rates are 3¢ to 4¢ per kilowatt hour, versus 18¢ to 20¢ in the late afternoon; and switch to a natural-gas generator in the summer, when gas is cheaper.

© 2005 Deena Waisberg

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