Energizing Profits When it comes to maximizing the savings in energy-saving, Steve Gossett is on top of the trend--and he's making bank, too.
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Sadly, most energy-saving technologies are not economically attractive to owners of large office buildings and shopping centers. The cost to install solar panels on the roof of a mall, for example, takes many years to repay itself in energy savings. And since tenants typically pay for power, few landlords are willing to invest in energy-saving solutions.
But Steve Gossett Jr. isn't deterred. His 6-year-old company, Transcend Equity Development Corp., has come up with a way to finance all kinds of energy-saving improvements for large commercial buildings. Transcend contracts with building owners to deliver energy at a fixed cost for 10 years. "Once they [contract with me]," says Gossett, 34, "I invest capital in the building and create a space between what the [owners] pay me and what I pay the utility companies. That will generate a return of-and on-the capital invested in the building."
This largely financial business model works well thanks in large part to Gossett's good relationships with banks and private equity groups, which front the funds to cover the huge costs of new energy-saving technologies. Transcend then repays these investors over a period of five to 10 years.
The company has more than over 33 office buildings--nearly 5 million square feet--under contract and predicts eight-figure sales for 2008. And, says Gossett, new government-backed initiatives will drive stronger demand in the coming years.