Michael Horvath, CEO and Tom Marshello, COO of Green Heat Corp have a fantastic new technology that helps restaurants convert the heat that is generated in their restaurant into an alternative energy source. Featured in the Conserve Section at the National Restaurant Association Conference in Chicago, Michael and Tom talk to us about how they got the idea and how this innovative and patented technology really works. Having seen the technology first hand I can definitely see why restaurant owners would want their hands on this energy efficient and alternative energy source solution.
Ben Lack: We’re here with Tom Marshello of Green Heat Corporation. Thanks for giving us some of your time.
Tom Marshello: Thank you.
Ben Lack: Can you to us a little bit about how Green Heat started?
Tom Marshello: Absolutely. Okay, Michael Horvath, he owns a bar/restaurant up in Minnesota, paid an exorbitant amount of fees as far as energy costs go, tons of propane in the basement, running for every single year. Came up with the idea of “How am I going to reduce this down? Just far too much to pay.” So he comes up with this invention which is what we’re actually displaying at this trade show which I can kind of walk you through, but that’s how the company was founded. Just on the sole idea “Let me just try and reduce the amount fossil fuels and burning energy that I’m paying to a propane or energy company.” So what Mike came up with is the idea of inside of this grill here, you’ve got the whole concept behind this is that a restaurant is going to be running their grill, their pizza oven, whatever some sort of constant heat source. It’s going to be running morning until night. So inside of this grill is a lot of wasted heat. That heat just goes up, dissipates out into the exhaust fan. And the idea behind Green Heat Corp. was let’s try and capture that heat. And the way we done it is install heat exchanges inside of the grill itself. We got in this particular working model here. I’ll just show you that it is actually running. Put a little water on there. So it’s actually running model. This has a heat exchanger built on the inside, underneath the griddle as well as the heat exchanger in the backsplash.
And what we’re doing is running water through those heat exchangers to take some of that unused heat and transfer it to the water. So now you’ve got hot water. We’re heating up that water and transferring it to a storage tank. So now we’ve got this big vat full of hot water that we could use for multiple purposes, such as heating in domestic water in the summer, or in this particular working model that I’m going to show you here, we’ve got it setup so that it actually could heat your building. This is actual fossil fuel burning mechanism that you’ve got in your existing furnace. You got a replaceable supplement.
So this actual model here is not what will be installed in a particular restaurant, this is just supposed to mimic what a restaurant would have. So we actually work with an existing furnace. We work with existing grills. The footprint for our product is actually very minimal. It’s just the piping and stuff involved. So in any case, you’ve got your water tank we’ve got installed inside here. You see these two blue pipes that are coming out here. These are running into a heat exchanger that we’ve now installed inside the “plenum” of somebody’s furnace. Now we could also work with a slab heat system if they’ve got a concrete slab. We can work with a radiating system if they’ve got radiators and stuff like that because that’s just tapping into the water there. But in this particular case is the hardest one to do is to actually tap into the actual furnace itself.
So if you take a look on the inside of here, we’ve got a heat exchanger that we’ve installed inside of the furnace. So what we’ve done is cut a hole in the furnace itself, install the heat exchanger inside there and attach these water lines to it. So now you’ve got the hot water that’s flowing through that particular heat exchanger that’s inside the furnace. Now when the restaurant thermostat calls for heat, normally it would call for the furnace to turn on to get, whatever natural gas or propane burning to heat up that air to go up through. But when our system, when it goes to call for it, instead of actually turning that one, this is hot enough, it actually turns on the fan for you as opposed to turning on the actual…
Ben Lack: And you got these switches over here.
Tom Marshello: Yeah, this is just a manual way of doing it. When we have it installed in a real environment, it just does it automatically. When the fan goes on, what happens is the air blows from underneath and from behind that through that heat exchanger, and you’ve got a ton of hot air that’s just running through it as you felt as you stepped back. You can feel the heat that’s coming out of there. So that’s the whole idea behind the product work.
Ben Lack: So obviously this is a demo unit. Are you saying that this is going to be a custom fit for really every location?
Tom Marshello: It is. We can actually work with an existing location such as the one we have installed in Minnesota that was done on an existing setup. If it’s a new construction, it’s that much easier to get everything set up ahead of time. But it’ll work with any grill, any pizza oven, any type of constant heat source. We can tap into that. And then, of course, any type of heating system that they might have. We don’t replace any heating system at all. We’re just basically supplementing it with ours, allowing it to either supplement or even replace the existing fossil fuel mechanism.
Now, of course, when it’s off in the middle of the night, if you’ve got your heat turned down and this whole system’s off, the regular gas is just going to come on anyway. So it’s not like we’re taking that away from a particular restaurant. There’s definitely that backup if they need that.
Ben Lack: Very cool. Well, let’s introduce Michael Horvath to the interview here, and Michael can you talk to us about the patents I know that you were talking to me earlier about. You guys are really trying to make sure that you have your arms wrapped around the technology.
Michael Horvath: Well, it’s kind of a concept that everyone’s been trying to capture their heat going out of the grill or the exhaust fan for years. And I’ve really found a way that it really works. It’s really kind of a mindless once it’s all set up and set your own thermostats where they need to be. We backup as your existing furnace. So turn it on, your grill’s heating, and you just forget about it. But the patents I set up are for the exchanger itself which is in the backsplash and in the grill. I’ve set up one for water heaters so heating your domestic water with this system. For example, if it’s in the wintertime up in the middle of Minnesota, you need all the heat you can get out of this to heat your building. I mean, when you get six below like it does in my restaurant once in a while… They’re cheering for me.
Tom Marshello: They are cheering for you. They know you’re here.
Michael Horvath: See? With my hand up?
Ben Lack: Absolutely.
Michael Horvath: But when you’ve got six below weather up there, I’ve got a three hundred gallon storage tank in my unit, and sometimes six below, I keep the heat down to about sixty-two at night. It still runs out of that heat because the grill’s off. So it’s got to have a backup which is the gas furnace. And, again, it’s the existing fan being used to blow the air through either heat exchanger, through the furnace or through the green heat exchanger. So when you’re on that zero temperature constants, you just use this. So it’s keeping your heat costs way down. For example, I got a cinderblock building northern Minnesota, and I cut my heat costs in half. It really was a big money saver for me in a really tough economy, tough to make a buck in this business. And if you can take that money you’re throwing at the fuel costs, cut it in half, cut it in three-quarters. If you can take that and put it in your pocket, put into something else, you’ll recapture cost. It’s unbelievable. My return on investment is right around two years. I figured I saved about seven thousand bucks last year on mine.
Ben Lack: Tell us the price for power that you were paying. Ten cents? Twelve cents kilowatt power in Minnesota?
Michael Horvath: For power, they just pumped it up because they’re doing a bunch of research on the wind turbines up there.
Ben Lack: Oh, yeah. Renewable energy.
Michael Horvath: It’s gone up like, probably fifteen bucks a month on a standard issue. So I think you right. I think it’s about fourteen. It might even have gone up to sixteen. Again, that’s how this whole thing started. I got mad, and I created that.
Ben Lack: And talk to us about the rollout. Obviously it’s going to be custom in every shop, but you guys can’t go to everyone. So are there certain lines that you’re trying to go to, or are there folks that you’ve met here at the show that you’re…
Michael Horvath: We’ve met a lot of people. We got a great response from a lot of people. We got a lot of questions. Even people with “Hey, I got this type of grill. Can it work?” I just went with one guy over there and looked at it. “Yeah, we can do that. Let’s figure it out.” So I got it drawn up there, and it’s already to go.
Ben Lack: How long would it take to actually install in a location?
Michael Horvath: A standard installation would probably take about two days. This part right here, the furnace part is the real easy part. That’s about two hours to put that in. Putting in the storage tanks and the pumps is a lot of moving, just heavy lifting, moving it, installing it, making sure it does support, making sure it’s insulated, wiring it, plumbing it. The toughest part is going to be putting the heat exchangers into the grill or exchanging the grill for one already built with the heat exchanger in it. A lot of time we can do that. Just if we have the same grill, same BTU, same size, exchange, have a core charge, make it a lot simpler for everyone. Because a lot of times when we are going to install this, the restaurant is going to be open all day long. They are going to want us to take care of it at night.
Ben Lack: That’s what I was just about to ask is do it after-hours.
Michael Horvath: We’re going to have to be coming in there at nine o’clock waiting for the existing one to cool down. This I could probably set up during the day. That’s not a big deal, set that up. But when this goes in, it’s going to have to be an all-nighter which is probably going to take two nights.
Ben Lack: Both of you, why don’t you talk to us about, why you guys got in the business.
Michael Horvath: I just bought a restaurant, and I got mad at how much heat was going out that exhaust fan. And then I would burn this out the exhaust fan. And then I turn around over here and burn the same propane in a different furnace to heat the building. So I said, “There’s got to be a way to tie that in together.” I’ve got a wood boiler at my house. So I’m throwing firewood. I heat my garage and my house. And I just took a lot of those pumps, lines. Instead of the wood burn, I needed to make this the heat source for the boiling system and put the water into the storage tank. And the larger the storage tank, the more heat is going to generate through the night. So I just kept getting bigger and bigger, and that’s what I did.
Tom Marshello: So when Mike approached me with this, we hadn’t talked in a long time. We’ve been friends for a lot of years. Mike called me up, and we were just chatting for a while. And at the end of the conversation, he says to me, he goes, “Oh, Tom, by the way, I made an invention. It actually works.” I’m like, “You gotta be kidding me. Tell me about it.” So he tells me the whole concept, everything about it. I said, “Mike, we need to sell this. We can sell this. Let’s start a company. Let’s do it.” Because I was unemployed at the time, so I said, “Hey, let’s get it going.” So that’s how Green Heat was actually founded. We decided to go to market after his couple of years of research and making sure everything works right and very excited to be in the business.
Ben Lack: Final question. Tax incentives. Have you guys done any research to find if a customer can get any types of rebates or tax incentives from the government, whether it’s federal or…
Tom Marshello: There are a lot of energy efficiency tax credits available, both from the federal as well as the state level. We’ve been giving away some fliers and stuff to people today with various websites that they can go to research that kind of incentives that are available.
Ben Lack: Part of the process is you’d help them find out what’s available in their area.
Tom Marshello: Absolutely.
Ben Lack: Okay. Well, Tom and Michael, thanks so much for you time, and we definitely look forward to keeping in touch.
Tom Marshello: Thank you, Ben. Appreciate it.