Dutch Dresser
I have a natural fascination with graphical depiction of data. Graphs provide a visual way to see what has happened and to predict what might happen. In the exponential growth curve the rate of growth is proportional to the current value of the variable. This curve is generated by changes of many different types throughout our world.
As new products or technologies are introduced into a marketplace, those behind the introduction hope their products will move into the market in a pattern of exponential growth.
Following the introduction of residential and institutional sized pellet boilers in Europe in 1998, the rate of growth of pellet boiler sales in Germany, Europe’s largest market, reflected the classic exponential growth curve starting at a few hundred per year just before the turn of the century to 155,000 during the 2011 calendar year with more than 180,000 sales predicted for 2012.
Two similar shaped curves are being created as pellet boiler central heating is becoming increasingly popular in the northeastern United States.
On a shorter time scale, Maine Energy Systems’ growth curves in three categories are showing classic exponential growth curve characteristics. The red bars are annual pellet boiler sales (the gray bar in 2012 is a projected sales bar, which appears to be conservative). The blue bars are sales year to date for the current month (May). And, the green bars represent serious prospects on sales lists, year to date. Given a pretty consistent conversion rate from prospects to sales, the projected sales bar for 2012 should likely be about 25% taller than the prospects bar.
On a still shorter time scale, the growth in the rate of distribution of government rebate funds for those installing automatic boiler systems in New Hampshire also shows exponential characteristics.
More rebates were extended half way through the eighth quarter than in the seventh quarter, but funds for the rebates ran out before the quarter could be completed.
Every company that is working to make central pellet heating available in the US Northeast spends considerable time and energy educating lots of constituencies, particularly potential consumers. The information currently available on sales growth over the last five years strongly suggests that those efforts are having the desired impact. The marketplace is understanding the many clear benefits of heating with locally produced, renewable fuel. The future is bright for both those in the industry and those converting to central pellet heating.
Dutch Dresser is Managing Director of Maine Energy Systems in Bethel, Maine