Indie Energy co-founders Daniel Cheifetz, left, and Erik Larson at the Walgreens store in Oak Park that’s now heated via their company’s technology.
Shoppers stepping into a Walgreens that opened this week in Oak Park would probably never guess the store is warmed by heat drawn from a renewable energy source some 600 feet below the rehabbed historic building.
The geothermal energy system in one of Walgreen Co.’s first sustainable and eco-friendly stores was developed and installed by Evanston-based Indie Energy Systems Co. By digging four bore holes 600 feet deep near the drive-through area of the new store and installing a system that pumps naturally available underground energy into the store, Indie Energy’s system is providing all the necessary heating, cooling and refrigeration for that location. The system is expected to reduce Walgreen’s energy costs by 46% compared to a conventional heating, ventilation and air-conditioning setup, according to a Walgreen’s spokeswoman.
That’s the latest of many geothermal units Indie has been developing and installing in Chicago and the nearby suburbs. The four-year-old company, which focuses on geothermal systems for commercial buildings and other large structures, is poised to benefit from a growing awareness and recent increased demand for geothermal energy.
The Chicago Climate Action Plan’s updated report in September recommends the city of Chicago retrofit 100 million square feet of existing public buildings and structures with geothermal systems over the next 10 years to help meet its carbon reduction goals.
Indie Energy was launched in 2006 by Daniel Cheifetz and Erik Larson to ride the clean-tech wave. Mr. Cheifetz, 62, was an Internet software entrepreneur in the 1990s and shifted to geothermal energy when he started getting involved in charity work in Evanston. He began looking for the most cost-effective way to run a sustainable building and ended up starting a geothermal company. Mr. Larson, 31, had worked in sustainability and energy-efficiency consulting both nationally and internationally.
Mr. Cheifetz contends owners can save at least 35% in energy costs with Indie’s systems and sometimes as much as 65%.
The company won a $2.45-million competitive funding award from the U.S. Department of Energy in October 2009 based on a demonstration project that showcased its transformative technology. That project was a 166,000-square-foot building retrofit of Local 150 of the International Union of Operating Engineers in Countryside.
Other installations include several buildings on the campuses of North Central College in Naperville and Garrett-Evangelical Theological Seminary at Northwestern University in Evanston. A system was installed in a 73-unit affordable housing senior facility in Pilsen (the Resurrection Project), as well as one at corporate headquarters at Medline Industries in Mundelein. Indie Energy also will install geothermal as part of the 425,000-square-foot construction of Astellas Pharma’s new U.S. corporate headquarters in Glenview.
More recently, the company secured a $1.6-million SBA loan from Ridgestone Bank in Schaumburg in June to refinance some debt and fund new technology investments.
Mr. Cheifetz declines to provide exact figures but says Indie’s revenue doubled last year over 2008; he expects it to double again this year over 2009.
Crain’s spoke with Mr. Cheifetz this week about the challenges of digging deep in tight urban worksites and educating people about how geothermal energy really works.
Crain’s: Can geothermal energy do the entire job of heating and cooling a building with tens of thousands of square feet or do you need other energy sources as a backup?
Mr. Cheifetz: Geothermal can do it all, but in larger commercial buildings it’s better to create a hybrid system for cost-effectiveness. One of the ways we bring down the build cost is we identify the times of the year you might get extremely cold and we figure, to take care of that with a geothermal system, you’d need to add more bore holes that cost more. So instead, we put in a standard boiler or cooling tower that can take the load and go on a few times during the year when you have too much heating or cooling demands.
Crain’s: What kinds of smart technologies has your company developed to get the most benefit out of geothermal energy?
Mr. Cheifetz: We have a serious engineering department here that developed a methodology for simulating the whole building and its relationship with the ground. There’s no way to tell exactly how to use the ground as a resource and a heat sink. People used rule-of-thumb kinds of approaches, and in many cases, they oversized the system. We simulate the whole building before we ever build anything. We simulate what the energy load will be, what kinds of activities will be going on in the building, the people flow, etc. . . .Then we figure out how to move that energy around in the most efficient way.
Once you build the system and it’s running, people reasonably ask: How is this going to work and how will I know if it’s working well? We developed what we call a Geopod, which is a standard and compliant way to measure the savings in dollars and carbon. We use the Internet and sensors in the building and powerful servers that run these calculations all the time so we can tell every minute how much energy the building is using and how much they’re saving because they’re measuring the actual energy flow. It gives them a baseline to compare to a conventional system that might use the same amount of energy.
Crain’s: What’s the biggest challenge about digging deep to get geothermal systems installed in an urban setting?
Mr. Cheifetz: Space is a big challenge because in an urban environment your space is constrained. There has been lots of geothermal done in rural areas because there’s lots of land and you can do shallow bore holes. You can’t do that in a city where you might have a small courtyard or a place where other construction is going on.
One of the things we’ve done is developed a technology, with some of it imported from Sweden, that allows us to do geothermal energy field construction with smaller equipment. It also goes deeper than other geothermal equipment, so instead of going down only 300 feet, our average depth of the bore hole is 650. A typical bore hole is more like 300-400 feet because most companies haven’t pushed the envelope in technology like we have.
Crain’s: Do you think geothermal energy is off most people’s radar when they think about renewable energy? How tough is it to educate building owners about geothermal energy when solar and wind power get so much more exposure?
Mr. Cheifetz: Yes, solar and wind get more attention because they’re visible and they require huge infrastructure and investments. Even though people have known for a long time that geothermal is energy efficient, there have been these big obstacles that have kept it from being adopted all these years: how to design it, build it, measure it and prove it. We’ve broken through those barriers.
And now there’s good incentives, too, with federal tax credits. If you do it right, you can get paybacks that are under five years. Retrofits sometimes are more expensive, but even then it’s closer to six to eight years.
The Department of Energy identified basic education as an obstacle to adoption of geothermal. It’s not something that rolls off the tongue and it’s difficult to conceptualize. With any new technology, that will always be the case. I believe if we can educate the market with proof and good stories, we can change that.
Crain’s: You’re scheduled to testify before a congressional committee in Chicago later this month. What are they exploring in this field meeting and what do you hope to contribute to the conversation?
Mr. Cheifetz: The House Subcommittee on Energy and Environment is meeting on Nov. 15 in Chicago. They asked me to be an expert witness to provide information about ways we can improve our renewable energy infrastructure in this country, especially with R&D and advanced technologies.
Instead of falling behind other countries, we want to show what we can develop to be competitive. Using our clean technology, we need to look at what we can do to develop best practices, and that includes private-public partnerships and cooperation between private companies and universities.