nbsp;nbsp;January 15, 2009 – More than half of all electrical energy consumed in the United States is used by electric motors. So improving efficiency for electric motors is one of the most basic and fundamental ways that businesses, consumers and the government can save energy, reduce operating costs and improve productivity.There are multiple approaches to doing this: making more efficient motors is an obvious one. But in many cases, motor inefficiency is a consequence of the load which the motors are powering. Cases where motors have to have enough power to drive a load at full capacity but where the load is, in fact, often light. These are some of the most frequent cases of motor inefficiency.One company that that is addressing this market is Power Efficiency (OTCBB: PEFF ), which has developed technologies which result in up to 40% savings to client firms in the industrial markets and has established proof-of-concept installations in several high-profile environments including the Bellagio hotel, Columbus International Airport, JFK International Airport, Smithsonian Institute, Las Vegas Convention Center and the Denver International Airport through leading partners/clients including KONE, ThyssenKrupp Elevator, Otis Elevator, Barrick Gold and Berry Plastics.The initial market Power Efficiency focused on to prove out the energy savings it can produce was the escalator market. This is an ideal proof-of-concept, because escalator motors are designed for an optimal load – 2 people on each stair – but they rarely operate in this optimal capacity. Consequently, they waste a lot of energy. Power Efficiency’s technology senses the loads and adjusts electricity required accordingly. The result is 20% to 40% in energy savings.The worldwide market for elevator and escalator services is expected to growth at 5.4% annually through 2011, surpassing $57 billion and the market for escalators and moving walkways is expected to grow at 8.3% annually to $2.5 billion in 2011. (Source: Freedonia)Power Efficiency’s goal is to become the industry standard for energy efficiency in this market. And it is making progress, having established client relationships with market leaders including Otis Elevator, ThyssenKrupp and KONE.Other markets that Power Efficiency is expanding into include granulators, cement mixers, and other large scale industrial applications. The potential for extending its technology into new industrial applications is pretty broad, so Power Efficiency’s strategy is to establish OEM relationships and build a channel strategy so that it can leverage pre-existing sales forces. The appeal for companies to adopt its technology is fundamental: lower energy consumption, cost savings and longer product lifetimes.In the past year, Power Efficiency also developed a product based on its E-Savetrade; technology that can apply to the residential appliances market, targeting energy savings in washing and drying machines, refrigerators, air conditioners, etc. This market is massive, and is a major priority for the Department of Energy to support through its Energy Star program.In December, Power Efficiency announced a partnership with IXYS (Nasdaq:IXYS), a $300 million semiconductor component business with more than 2,000 clients, many of which, are appliances manufacturers. This sets the stage for Power Efficiency to leverage IXYS sales force and customer base to sell through into OEM engagements. The market opportunity here is impressive:There are about 9 million clothes washers shipped each year and 8 million clothes dryers shipped each year alone, in the U.S. At an ASP of $10 for its single phase product, the washer/dryer market alone is about a $170 million market, not to mention other applications for refrigeration and air conditioning.Power Efficiency ’s stock trades lightly at about $0.16 to $0.20 per share, representing a current market cap of about $6.4 million. In 2008, the company was focused on transitioning its technology from an analog platform which was prohibitive in terms of cost and performance to scaling into full commercialization to a digital platform which works better, has more functionality and is cheaper to produce which is critical as the business looks to build OEM contracts.This year, we expect to see the business gain accelerate its industrial three-phase business and hit some key milestones for its single-phase residential appliance product. From an investment standpoint, the stock is compelling on multiple levels:middot; nbsp; nbsp; nbsp; nbsp; Strong insider ownership with the company’s operators having invested millions into the business;middot; nbsp; nbsp; nbsp; nbsp; Validated technology with opportunity to scale business into escalator market with existing clients (KONE, ThyssenKrupp, Otis)middot; nbsp; nbsp; nbsp; nbsp; Moving into other industrial markets (plastics, cement/rock/mining)middot; nbsp; nbsp; nbsp; nbsp; Massive Blue-Sky with residential appliance product, which is initially validated through IXYS partnershipmiddot; nbsp; nbsp; nbsp; nbsp; Secular trends have never been better: regulatory pressure to adopt energy efficiency standards; incentive for businesses in a challenging economy to reduce energy costs and equipment maintenance costs; interest for consumers to reduce energy expensesmiddot; nbsp; nbsp; nbsp; nbsp; E-Save Technology has been validated by several leading utilities for rebates including: Southern California Edison, Excel Energy, SDGamp;E, Sempra Energy, Los Angeles Department of Water amp; Power, Nevada Power, Sierra Pacific and Anaheim Public Utilities.If Power Efficiency ’s E-Save Technology were implemented across the relevant sectors in applicable motors throughout the U.S. manufacturing industry, it has the potential to produce savings of $1.7 billion in the U.S. alone. Again, the stock is trading at a current market cap of $6 to $7 million. We think the company is poised to deliver on inflection points across its business which should serve as catalysts for significantly higher valuations.At Aspire, we were happy to begin working with Power Efficiency to make its story and value proposition more well known on Wall Street. We don’t see many companies that have the developed technology, customer relationships and perceived market opportunity that are trading at levels which make the situation as timely as this one is, in our opinion. We will continue to report on the company’s progress and welcome anyone interested in learning about the story to contact us direct for further discussion at 760-798-4938.Important Disclosure: The SCPEditor is the managing partner of Aspire Clean Tech Communications which is LONG PEFF.OB, and is on a monthly retainer of $6,500 to provide PEFF with corporate communications and strategic advisory services. Aspire has also received 40,000 shares of PEFF’s restricted common stock to provide these services . The information and trades provided here and in the comments are for informational purposes only and are not a solicitation to buy or sell any of these securities. Investing involves substantial risk and you should evaluate your own risk levels before you make any investment. Past results are not an indication of future performance.nbsp;nbsp;
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