Home co-gen firm seeks capital

Vector CoGen, a two-year-old Carson City company, finds itself at the most important crossroads of its young life.

Richard Langson, the company's owner and director, spent the past two years developing a highly efficient cogeneration unit targeted toward the residential market.

He's got units in the field, producing electricity and hot water.

Orders for some 250 units are booked, and Vector CoGen projects orders of 2,000 units this year, 6,000 next year and 20,000 the year after.

To reach those goals, however, Langson and his company need capital, and a presentation the entrepreneur will make this week to California venture capitalists may prove crucial.

Vector will make its pitch at a conference sponsored by Golden Capital Network in Oakland.

Langson said last week the company hopes to open the doors to several million dollars in investment to ramp up its manufacturing.

"It's time to turn the wick up," he said.

So far, the company has been funded entirely by Langson and one outside

investor.

That's been enough to develop a home co-generation system that promises to pay back its $10,000 cost in less than three years in Nevada and even faster in states with higher electric bills.

The Vector CoGen system, which is about the size of the air-conditioning units outside many homes, uses natural gas to power a highly efficient generator.

At the same time, the system captures heat produced in the generating process and uses it to heat water for a swimming pool, a hot tub, space heating or domestic hot water.

The company says its unit will cut homeowners' utility bills by 20 to 70 percent.

Other cogeneration companies, Langson said, are focused on larger commercial customers.

In fact, he's worked closely with one of them, Hess Microgen in nearby Mound House.

Vector, however, is the first cogeneration company to focus on the residential market, and Langson believes the four patents and thousands of hours of design work represented in his unit give him a three- to five-year edge over any competitors.

The key questions he needed to address, Langson said, were ensuring that the unit was quiet enough for residential use and ensuring that it wouldn't need much service.

A sound-proofed cabinet deals with the noise issue; a patented system allows the unit to be serviced only once a year.

While Vector CoGen focuses on the residential market, Langson said the company also has developed larger units for commercial uses such as coin-operated laundries, service stations and fast-food outlets.

The company signed its first distribution agreement about 60 days ago with a large heating and air conditioning contractor in California's Orange County, and Langson said the company is looking for distributors in states with high electric costs.

The Vector unit makes economical sense when electric costs are above 7 cents a kilowatt hour in Nevada, they're about 11 cents.

In states such as California which provide incentives for use of green power, the payback is even faster.

A $3,000 rebate available on cogeneration units in California, Langson said, would reduce the estimated payback from about three years to less than two years.

It's unlikely that the company will handle its own manufacturing, but instead will look for contractors.

Kawasaki produces the units that drive the generators produced by Marathon Electric inside the Vector CoGen units.

Cubix Corp., the Carson City-based maker of internet servers, handled the initial manufacturing of cabinets for the units.

In his presentation to venture capitalists, Langson will contend that residential co-generation units today are in the same position as cell phones a generation ago a soon-to-boom market that allows consumers to reduce their reliance on traditional utilities.