Dennis Lee’s Unbelievable Journey – Part 3: The World’s Best Heating System
Dennis brought his talent to bear once again.
When Dennis put on that mall show of energy-saving technologies, it was a huge success, and just then, he had his company stolen from him by his business partner (it was not the first time that it happened). Dennis was still in a wheelchair and had to apply for food stamps to survive, just as their second child was born.
Of course, the thief drove the stolen company into the ground in a few months and went bankrupt. Our world is full of greed-blinded idiocy like that, especially in the USA’s entrepreneurial waters. When they saw Dennis build skyrocketing businesses, they thought that they could just steal the rocket and ride it to the Moon, but they failed to understand that Dennis’s talent was what made it happen.
Dennis got a job selling medical supplies and immediately began thinking big, when he got a call from that persistent man at the mall show, who was still interested in that solar system. This was in Delaware, as Dennis moved around on the East Coast during his adventures. Dennis dug through the paperwork, found the regional dealer for that solar system, and they visited the scientist. The scientist was familiar with the basic physics, was sure that it would work, and he and the dealer talked into the wee hours before Dennis interrupted them and asked the scientist if he was interested enough to make the $3,000 downpayment, and he said he was.
Dennis drove a broken-down ambulance to sell the medical supplies. Dennis had nothing but the clothes on his back and drove his ambulance to the headquarters of that solar company in Pennsylvania. He met with the regional dealer who said that the dealership for the county that Dennis lived in was $25,000, and Dennis asked for a month to work it off in sales commissions. Dennis ran another mall show and heavily promoted that solar system. He got 42 leads from that show that he split with the dealer.
Dennis got half of those leads, and the first lead that he visited was a scientist at du Pont, which was the world’s leading refrigerant producer. That solar system was like no other solar system on Earth. Typical solar systems had black panels that absorbed solar radiation and warmed a fluid in it, often water. Those systems only worked in the sunshine. This solar system was different. Refrigerant ran through the panels. It was really a heat pump, not the typical solar system. I briefly described that heat pump in this post. That heat pump worked best in the sunlight, but it also worked at night, even while the panels were buried under snow.
When Dennis arrived at that scientist’s house, Dennis had almost no idea how that heat pump worked, and the scientist began peppering Dennis with questions. Dennis told him to get a box out of the back of the ambulance, which had the heat pump’s documentation. That night, Dennis had one of his life’s greatest educational experiences. The scientist was enthralled, they literally spent all night discussing that heat pump, as Dennis mostly listened, and Dennis drove away at dawn with another sale.
Dennis was in orbit after that night and immediately began thinking big. When Jimmy Carter declared the moral equivalent of war on energy costs, he pushed through a tax credit. The credit refunded 40% of the cost of qualifying energy technology, up to $4,000. Back when Dennis first got involved with energy conservation, it was low-flow showerheads, and Dennis invented the first shared-savings program for it. The heat pumps sold for $12,000 when Dennis got involved, but as he learned about the business, he developed a program to sell the heat pumps for $10,000. The cost of making, selling, and installing those systems was about $4,000. Dennis’s program became selling the heat pumps for $10,000, get a downpayment from the customer for $4,000, which the federal government would refund to them, and the customer was only obligated to pay the $6,000 remaining balance from proven energy savings. It was essentially no-risk to a customer. If the heat pump did not work, it cost the customer nothing. It is the most brilliant and benevolent business strategy that I ever heard of.
That solar panel was the magic that made the heat pump work. The standard air-to-air heat pump is highly inferior to Dennis’s heat pump. That fin-and-tube array makes air-to-air heat pumps easy to install, but their performance is terrible. Dennis’s heat pump was harder to install but performed about three times better than the air-to-air. Heat pump efficiencies are measured by a coefficient of performance (“COP”). Air-to-airs get about COP of about two, which means that for every unit of electricity used to run it, it delivers two units of heat. Dennis’s regularly got COPs of six, and also delivered about twice the amount of heat as air-to-airs did.
During Dennis’s all-night session with that du Pont scientist, the scientist saw that the literature predicted only a COP of three, but the scientist thought that it would do more like a COP of six. Dennis obtained a test run by a Fortune 500 company that got a COP of over seven, but noted that the company (LamCo) had predicted only a little over three in those conditions. Dennis talked to the LamCo officials and they admitted that they cut the performance data in half to maintain their “credibility,” as when they told engineers what their system did, they got laughed at for reporting such “impossible” numbers. Dennis was used to salesmen’s puffery that overstated what their products could do, but this was the opposite problem. Dennis told them that he would advertise what it actually did, not half of what it did.
Dennis was on fire, and in a typical Dennis move, he rented out a ballroom at the Hotel du Pont and filled it with potential customers as he unveiled his “Systems for Savings” program. He sold 280 systems that night, and 300 in his first month. The regional dealer was there for the show, and after the show he dropped his poker face. LamCo had sold only 20 systems on the entire East Coast in the previous three years, and the dealer begged Dennis to become his partner.
Carter’s tax credit was to encourage innovation, and the LamCo system was the epitome of that. Carter’s credit did not apply to conventional heat pumps, so the LamCo system was called “solar refrigeration.” Dennis eventually went to Washington, D.C., and used this example of a LamCo system in Minnesota, which had a higher COP in January (over 5) than February. Dennis submitted the Minneapolis weather record for that year, which showed that January was windier that year, as wind also increased the system performance.
The LamCo system was simply the world’s best heating system – IF it was properly installed. The situation that Dennis walked into was like the foam-insulation business: it was stuck at the craftsman stage, with poor quality control. Before Dennis got involved, half of the LamCo system‘s buyers installed it themselves. If it was not properly installed, it would not get those high COPs. So, just like he did with foam insulation, Dennis began to industrialize the process. He planned to carpet the USA with that heat pump, and could only do it with professional installation.
Mobsters muscled in and his business partners stole his foam-insulation companies, but that was only a gentle prelude to his days with that heat pump. Dennis could not believe the opportunity that that heat pump represented. He tried to interest the world’s biggest heat pump manufacturer, and he was belittled. What they did not say was that they played a part in a conspiracy to milk the consumer by the energy companies, by vending their shoddy products. The oil companies play the same game with the Detroit automobile companies.
Dennis finally found somebody else who understood: the chairman of the board of American Express. American Express was going to invest $1 billion to carpet the USA with the LamCo heat pump with Dennis’s Systems for Savings program. Just then, the owners of LamCo stole hundreds of thousands of dollars from Dennis (who lived in Southampton at the time and was an owner of LamCo), the founder absconded to South America, New York mobsters stole what was left, and Dennis was once again on the sidewalk with his family, destitute. Dennis had three children by that time: two daughters and an infant son. This is how our world works, Dennis was discovering it the hard way, but his adventures were just really beginning.