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Issue Date: January 2009, Posted On: 1/16/2009

AirGenerate taps into energy-saving industry

Connected to water heater, AirTap maximizes efficiency

By Martin Desmarais


Rick Pal, left, and Sunil Sinha, right, lead the Houston-based AirGenerate, which has developed a product, called AirTap, that improves the efficiency of standard hot water heaters. AirTap extracts heat from the surrounding air to heat water to the same degree as a gas burner or electric heating component would. Photo courtesy of AirGenerate

HOUSTON – A lot of businesses are talking “green” nowadays and looking for ways to capitalize on the growth industry of energy-efficiency products. Rick Pal and Sunil Sinha have their entry into the ring with AirGenerate Inc., but they are also going one more with their overall goal of making an energy-saving product that everyone can afford.

The Houston-based AirGenerate has developed a product, called AirTap, which dramatically improves the efficiency of standard hot water heaters. AirTap is a metal, square-shaped device that can be attached to the top of any 30-80 gallon water tank and then used to heat water, not with gas or electricity, but through the air surrounding it. AirTap does this by acting as a conventional heat pump, using a compressor (powered by a low-wattage electric current) to extract heat from the surrounding air, and then sending this heat through long copper tubes into an adaptor where it is dispersed into the water tank. This heats the water to the same degree as would a gas burner or electric heating component.

According to the company, AirTap results in 300 percent improved efficiency and up to 80 percent energy savings and it has been certified by GAMA under Department of Energy guidelines as the most energy efficient water heater in the United States. AirTap uses about one-fourth of the standard amount of energy to heat water, by drawing three-fourths of the energy from the surrounding air. It can reduce energy consumption by approximately two-and-a-half times that of a standard water heater or tankless water heater unit.

To put it in perspective, the company offers the example that AirTap uses less power than an 8-cup coffee machine to run the compressor, and its energy consumption level is equivalent to keeping two coffee machines on for a day.

When faced with the numbers AirTap seems like a no-brainer and an easy sell. And, as Pal and Sinha admit, it is. The problem is exposure.

“The technology is extremely cool and highly applicable. The challenge is getting to the consumer,” said Pal, AirGenerate’s chief executive officer. “The challenge is not selling it. The challenge is getting to the masses.”

Officially launched in January 2008, AirGenerate took to trade shows after “green consumers,” as Pal calls them and also began selling online. Another strategy was to work with product resellers in the water and heating industry and to work with plumbers to show them how to install AirTap.

“It is a new product from a new company and it needed a non-traditional way of selling it as well,” Pal said.

Currently, there are more than 1,000 AirTap units installed in 45 states and Canada, according to AirGenerate. The company has eight employees in Houston and works with about 20 contractors.

Recently, it scored some big exposure when it successfully conducted a heat pump water heater pilot program with Southern Company.

With nearly 4.4 million customers and more than 42,000 megawatts of generating capacity, Atlanta-based Southern Company is the premier energy company serving the Southeast. It operates four retail companies -- Alabama Power, Georgia Power, Gulf Power, and Mississippi Power, serving 120,000 square miles in four states.

After a successful round of testing in their labs, Southern Company invited AirGenerate to install their energy-efficient water heaters in several of their customers’ homes. The pilot was conducted over a 2-week period in October and included customers from Alabama, Georgia, Florida, and Mississippi. Correct Plumbing of Houston supervised the installations and worked closely with several local contractors invited by Southern Company to watch and learn from the pilot, according to AirGenerate.

Pal said that such pilot programs are crucial to AirGenerate’s success because it generates believers in the efficiency of AirTap and provides a growing base of users. The next key strategy is to set up a distribution network for AirTap in wholesale plumbing supply stores and at “big-box” chains, such as Home Depot.

“Now we are getting validation and that makes reps start to believe that there is a demand for this,” Pal said. “We have proven there is a market for it.”

Pal and Sinha also believe AirGenerate could get a boost from a federal tax rebate for using energy efficient products. AirTap qualifies for this rebate and its price tag of $699 can be drastically cut into when consumers get $300 back from the government for using it.

This kind of cost savings, as well as the energy cost savings consumers can register using AirTap is exactly what drove Sinha to develop such a product.

He has over 25 years of engineering and management in the renewable energy, energy conservation and software development. He has paired academic degrees in engineering from the Indian Institute of Technology, Kharagpur, and the University of Hawaii with extensive research in refrigeration technology, solar thermal electricity generation, biomass chemical conversion to useful fuels, methanol fuel cells and integrated renewable energy systems.


Photo courtesy of AirGenerate

He has worked with organizations such as the Hawaii Natural Energy Institute, the Gujarat Energy Development Agency and the Indian Institute of Management on energy projects looking for alternative energy products. He also previously developed a self-sustaining model of energy consumption for a village in India using local energy resources.

In 2002, he founded Sunlit, a solar photovoltaic company based out of the San Francisco Bay Area in California. In 2005, he started a company called Beyond Pollution, which was the genesis for AirGenerate.

Sinha can lay claim to being the inventor of AirTap and he says it directly relates to following his dream of creating commercially-viable, energy-efficient products.

“My desire was coming up with something that everybody can afford – so that everybody can save energy and save money,” he said.

According to Sinha, the need for these types of products really struck him when a friend asked him to come up with a solar energy system for his small business. Sinha said he came up with a system, but it costs $100,000, which struck him as too expensive and impractical. Even though the system would work the price tag made it essentially a failure, in his opinion.

“I asked myself, ‘How can I give a solution to a close friend that is not really appropriate from a financial point of view?’” he said.

Taking this experience into the invention of AirTap, Sinha said it was all about cost and making sure consumers could get their money back in a year or so. “The feeling was green is coming … but unless it is a solution that is very affordable and people can have it, and afford it, it is not going to be popular,” he added.

Pal’s and Sinha’s paths crossed while each was working in the Bay Area. Sinha revealed his AirTap concept to Pal in the fall of 2007, looking for possible investment, and Pal liked the technology so much, he convinced Sinha to move to Houston, where Pal resides, to start AirGenerate only a few months later.

Prior to AirGenerate, Pal was the president of marketingO, a promotional products company. He also owned master franchisee rights for Liberty Tax Service in the Greater Houston Area which he expanded to over 44 offices and 22,000 customers.

A graduate of the University of Texas at Austin with a business degree, Pal also held several product management positions at Commerce One, Webify Solutions, Navis and Iconixx.

He was also a co-founder of iBlitz.com that was incubated by Garage Ventures and IBM in 2000.

Pal first met Sinha while working at Commerce One.

Both Pal and Sinha are convinced the time is now for AirGenerate, in the midst of what they both view as a green revolution.

“There is a lot of interest in this technology right now and everybody is thinking about energy savings,” Pal said.

“It is almost the perfect storm,” Sinha added. “It is kind of like being at the right place at the right time.”

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