Plan to Sell E-Cat Heat Follows Pattern for New Technology Adoption (Albert D. Kallal)

The following post was submitted by Albert D. Kallal.

This concept of selling what some new technology provides as opposed to selling the technology to the end user is not new at all. In fact this is TYPICAL of technology adoption.

Recall in the past when many towns had just received electricity and refrigeration. Often in the central hotel or central market building you would find in the basement a LARGE commercial refrigeration unit which would power “many” home sized fridge boxes that locals would rent out. In other words, you did not own your own refrigerator, but rented out one in the basement of a building.

And we saw the same thing occurring when Laser printers and desktop publishing appeared for personal computers. Up sprung a whole bunch of business that had Laser printers that you would USE! So you would bring your document to that small business for printing. As Laser printer prices and desktop publishing software become wider spread, then MOST of these corner based desktop publishing and Laser printer shops went out of business.

To be fair even today many a small business will STILL go to Office Depot or Kinko’s etc. for some of their printing needs. This is due to these “service providers” having equipment that is STILL beyond the practical needs and cost of small business. So parts of this “printer service” business model exist, but such providers are offering FAR MORE then JUST having a laser printer for you to print on. Thus these renaming business are nothing like the original boom that occurred in desktop publishing in which one could simply purchase a few laser printers and you are off to the races with a new business model.

Rossi is really following the “same” above progression of technology. So if there is not the technology for affordable home refrigeration unit, then you rent out some boxes that are cooled by your LARGER commercial refrigeration system in the basement of that commercial building.

The additional beauty of the above business model is, if next year you increase the performance of your system, then you reap the profits (not your end users!). In other words if your refrigeration becomes 2 times better (cheaper) then last years model then then you now can provide your services for HALF the cost, but in most cases you can be charging the SAME price!

And same goes for personal computers – as they dropped in price, you would thus benefit from the increased value of that computer (businesses ONLY purchase equipment like computers because they produce MORE wealth then they cost).

So as a business, you are FAR BETTER off to own the technology, but only if such technology can be purchased at a reasonable cost.

So with Rossi’s model, or other early technology examples, It is the provider of the server who reaps the most rewards, and even more so when the performance of whatever it is your service provides.

So be it computers, refrigeration, or LENR, all have early examples in which it was MORE practical to SELL THE RESULTS of the technology then that of selling the actual system to the end user.

This business model will of course change over time as the technology becomes more widespread. However given Rossi’s lead time, this model could be around for 10 years unless competitors can catch up.

Of course many a businessman, seeing what personal computers could do for a business thus concentrated on looking for businesses that had not been computerized. You introduce computers and that business would often take off, or see very healthy profits. You could often easily double the value of a business in less then 5 years by adopting this approach. So you purchase a business for say 5 million dollars, introduce computers and the increased profits will EASILY allow you to sell such a business for now say 10 million! Smart businessmen can EASILY see how such math works!

So many a market play for LENR will be smart businessmen that look for business that will benefit by such lower energy costs – however, you only going to get REALLY reduced energy costs if you’re allowed to purchase a LENR plant in place of the current model of purchasing the energy. In fact this allows the owners of the LENR technology to purchase business that would not be profitable otherwise! (huge oppoturitiines exist for such owners of new technologies).

Remember the only real issue here is delivering energy costs for less then what competition can. The ACTUAL COST of the energy is moot!

A good example is to imagine that a star trek transporter was just created by you. You could thus transport a person from LA to New York for say $5 of electricity. However, you do NOT sell rides to New York for 20, or even $100?


Current flight rates from LA to New York (market value rate) are about $400. So you price you transporter “flight” rate below that of cars, but STILL at current market rates! This is in fact how and why technology can make your business money (you reduce the cost of delivering something at current market rates).

The result is you do NOT get a flight for $5 from LA to New York despite that being the cost! (you will pay near $300 dollars!!!).

Until such time that you can purchase your OWN transporter, which is the time that your realize such lower costs.

So LENR is in much the same boat as above – you will see reduced energy costs – but only a reduction that has enough incentive for you to switch and consume that energy. The higher profits margins will thus be realized by who OWNS the heating plants. Such heat will be sold at near market rates.

The only way you realize lower energy costs is as the technology becomes more widespread, and hopefully lower cost units start being sold to business as opposed to purchasing the results of the system from the owners of the plant.

Albert D. Kallal
Edmonton, Alberta Canada
[email protected]

  • mcloki

    Great explanation of market fundamentals.

    • Zack Iszard

      Agreed wholeheartedly!!

  • Leonard Weinstein

    There is more to a possible successful e-cat introduction than the cost issue, and it is different in several ways than most previous new introduced products (it may be close to introduction of home electricity, automobiles, and airplanes). It is likely that e-cat will not make energy extremely cheap even if desired, but likely would result in some real saving or it would not be practical, as was pointed out. The process of introduction is likely to be as the author suggested. The cost of parts, operation, refills of fuel, the electricity source (Stirling generator using e-cat heat, or other source), and other equipment for heating, cooling, hot water, etc., are still significant, and do limit the improved cost possible. However, there are unique major positive features to the new LENR type of energy sources that are more disruptive (in a good way) compared to most previous products. One advantage is the removal of much if not all dependence on external suppliers of energy. Using present energy distribution technology, there are some major issues. There are large scale power losses from storms, flooding, solar flares and CME’s, etc., that often cause major distribution problems. In addition, the need for extensive energy support structures (telephone poles, high voltage power lines, gas lines, etc.) may be reduced and eventually eliminated as the new power sources become practical, and save the cost and complexity of installing such items. This possible local independence made possible by LENR energy could make location of homes and buildings less critical in the future and totally change the way we live.

    There will be an eventual decrease in available oil and gas (and then increasing relative prices). This is not years away, but several decades, but will come to pass. The use of solar and wind energy sources are not likely to ever be a big piece of the solution, but do have some possible use. However, they will almost surely continue to have major problems and limitations as primary energy sources even if the energy storage issue were not present (large areas needed, connection from generation at large distances, noise of windmills, bird and bat kills, etc.). While small local Nuclear power generation is a possible solution, this is still a distributed system on a smaller scale. LENR like the e-cat looks to be a very likely major part of the not too distant future if it works as well as indicated by Rossi.

    • Paul

      “It is likely that e-cat will not make energy extremely cheap even if desired…”
      This is true until only IH knows how this technology works. When other players will have a similar technology, also small industries could make their E-Cat for their personal use, because the technology is extremely simple, so soon or later, in that situation, the prices will be forced to bottom…

    • Omega Z

      The savings will be the difference between the costs of fuel.
      Hardware is hardware. Note that Solar flares will be an issue no matter where the electricity is generated. A Power plant can at least shut down given advanced notice. Of course everyone tooling down the highway will still lose all their electronics.

      The most economical system would be localized power plants. It would be cheaper then residential energy. The reason this is cheaper is shared generating costs. At an Individual scale, I need to build for peak demand which means 90% of what I generate would be wasted. This would all lead to a substantial demand for nickel & obviously, the cost of Nickel would skyrocket. We’ll soon be right back to energy costs similar to Fossil energy.

      You know, Fossil energy was cheap & plentiful at 1 time. Considered so cheap, it wasn’t worth insulating our homes, or concern of only getting 10mpg. LENR. Cheap & plentiful. For How Long. Couple decades from now we my find Society screwed up again.

      • Zack Iszard

        For material sources, I think lithium is the element worth worrying about, unless a lithium-free LENR system can be proven.

        The amount of potential energy in readily accessible nickel minerals is many orders of magnitude in excess of the sum of all fossil fuel energy in the earth before the widespread use of coal and then oil. The price of nickel may spike during the fastest spread of LENR adoption, but will settle out at some point from efficiency advancements and a general adjustment of the market to the new paradigm. The price of nickel would have to increase orders of magnitude to become problematic in the way that fossil fuel prices are now, given the insane difference in energy density between the two energy sources.

        However, it may one day be considered that “burning” lithium for power, instead of using it for energy storage, is as wasteful as burning fossil fuels instead of using them to make durable goods. Your concern about a progress trap with LENR is valid (I’ve discussed it before months ago on some thread here), but this time around energy efficiency is already common practice. The question is whether the unthought energy-thirsty inventions that LENR may enable will lead to a shortage of fuel, namely the much more scarce lithium.

        • ecatworld

          Although there are tiny amounts of lithium and nickel used in the E-Cat’s fuel, and they don’t seem to be consumed as much as transmuted to different isotopes, and it seems the spent charges can be recycled. One charge may last a year or more, too.

          • Omega Z


            There isn’t any clarity on recycling the Nickel from Rossi.
            It may require virgin Nickel for the fuel. The used Nickel can be recycled for other uses that require Nickel as an alloy.

            If I recall, Copper used in the manufacture of electrical wire also needs virgin copper or mostly there of. All recycled copper is used for other products.

            Regardless, It doesn’t matter as both metals have a huge downstream of uses. Lithium may be an issue in the far future, but there are other sources in the solar system as is Nickel.

          • ecatworld

            Yes, I don’t think Rossi has ever said you could recycle the spent nickel back into the E-Cat. But for other uses, probably

  • GreenWin

    Andy, once again your fail to pay attention to detail. From your link:

    “The CPUC regulates privately owned
    electric, natural gas, telecommunications, water, railroad, rail
    transit, and passenger transportation companies.”

    This mandate does not have jurisdiction over a supplier of thermal energy, steam in particular. So Industrial Heat sells thermal energy, like some businesses sell (lease) axillary air conditioning, hot water, or water cooling.

    Also, Rossi did not invest the $12M – Industrial Heat investors did. Finally, a “monopoly” assumes no competitors in the product’s market. But there are plenty of players in the steam heat business including Westinghouse, the Dana Companies (International Leasing) and Associated Steam.

    • Andy Kumar

      Green, you have been too emotionally vested, for far too long, to see the glaring inconsistencies in the almost daily announcements.
      You are reading the PUCs mandate too *narrowly*, not seeing beyond the immediate horizon. When all the gas and electric companies go bust because of Rossi’s heater, PUCs mandate will be interpreted to include piped-in steam to protect the public from IH monopoly. Who knew that “freedom of speech” includes the freedom to look at centerfolds. Nowhere, it says “freedom to look.”
      Personally, I would like to invoke eminent domain and confiscate Rossi’s IP for public good, for a fair compensation of $5x12M. The courts can decide the exact number.

      • GreenWin

        Dear Andy, again you slip into the quicksand of cultural befuddledment. Interpreting law is apparently a class you missed at CalT. 🙂 Fortunately your friends here at ECW will help ‘splain it to you. “Public” Utility Commissions oversee real world utilities – not those of dystopian skeptics. IH’s steam lease business is one of many and thus cannot be a “monopoly.”

        “Freedom of speech” protects purveyors of centerfolds – not viewers. The U.S. Fourth Amendment protects viewers from peeping toms in and out of government. Lacking informed consent or warrant, no person or entity can lawfully enter another man’s domain.

        And “eminent domain” has for some 4,000 years applied to air, water and land rights. Not those of IP or material invention. However, metaphorical misuse is common in certain communities and your friends here are forgiving… to a degree. 🙂

        • Iggy Dalrymple

          The US govt did temporally commandeer industry in WW2.
          If Global Colding kicks in maybe the libs will declare war on glaciers and expropriate Rossi’s IP.

          • GreenWin

            Point taken Iggy. However probably certain sectors of US govt are already well-versed in LENR and would take a step backward appropriating Rossi’s implementation.

  • Mytakeis

    This is sort of like having your cake and eating it too. Except the moral perspective is replaced by the profit desire. You have a device which can provide near free energy to the poor and debt-enslaved population of earth, yet opt to just make profit. This ignores any moral feeling that you have a capacity to save and enrich life, but you chose not to. I do not think that this ‘sell the heat’ or byproducts thereof, will change the current paradigm. Yet correct me if I am wrong: that change excites, and ‘frees’ people to excel in their lives. It would disappoint me if profit-generating thought, necessitating holding back the actual devices as described, overcomes more freely distributed methods. However in this capital market society ingrained into current societies, it may be the only way to incrementally change to a better paradigm.

    • Omega Z

      You do know that it was someones profits that allowed such a thing as an E-cat to be built right. Has no one made a profit, It would not exist. When you work for someone, you expect to be paid. You profit from from the Labor you provided. I wonder if they made no profit how many more E-cat heaters they would buy. I’m guessing Zero.

    • Albert D. Kallal

      I just don’t see any other way to move LENR forward – if someone here has a better way – I honestly am open to this idea!

      There really is no other way to move LENR forward.

      The problem is really how one delivers such a new technology.

      And yes, Rossi is a monopoly for LENR until other players hit the market (and Rossi’s not really hit the market yet either!).

      There is really no other way to do this. If you have some government or some organization that wants to fund Rossi and they have some magic source of money that grows on trees, then by all means give them a call and have them purchase Rossi and IH rights and off they go!

      While Rossi likely is the “first mover” on LENR?
      What Rossi sells is NOT a monopoly!

      So if you don’t want to purchase margarine, then purchase butter!

      There is NOTHING stopping governments from purchasing solar panels and giving them to people who can use such panels for their energy needs now.

      We have other energy choices – the ones we are using now!

      The simply matter is LENR needs investment and capital to move forward.

      Just like the refrigeration example I gave, it would have been GREAT if the manufacturer of the refrigeration systems could have built small affordable refrigerator for consumers.

      However, at the end of the day such devices were not yet available. They could have continued selling such large refrigeration systems to commercial food suppliers without care or concern for consumers.

      As I pointed out, at least they allowed people to “use” the rented refrigerator boxes until such time affordable “personal” ones were practical and available.

      So this business model at least GETS LENR technology out as fast as possible to those willing to pay for such energy. The alternative is to raise HUGE amounts of money, and setup manufacturing of a lower cost device – that will take time, and the amount of time + effort to raise such capital is VERY time consuming.

      Rossi’s likely better to boot-strap the funds for a consumer device by first selling a commercial device. And this selling of the energy PAVES the way for investment into the LENR industry.

      Until investors SEE the results of LENR technology, then money will not flow.

      The computer manufactures in Silicon Valley had the above exact problem in the 1970’s. They could not raise capital from banks etc. since the computer industry did not exist yet!

      The solution in Silicon Valley was a NEW form of capital and investment. It was called venture capital but the folks in the valley often called this “vulture” capital due to the fact that you had to give to the investors a SIGNFICAT ownership portion of the company in return for their money (as opposed to borrowing at a bank – you pay the bank back you STILL own your company!!!).

      So these “vulture” capital folks will give you money and capital but ONLY for a significant amount of ownership in your company! (and as a result you lose control of the DIRECTION of the technology).

      I don’t see much of any other practical choices that exist to move LENR technology forward. Such technologies needs investment, and such money does not grow on trees.

      I mean the first Apple I computer was only a crappy little board with a CPU on it. Steve Jobs VERY much had the dream of building a consumer like computer. Such a device could help millions! The problem is it took many years to reach the point in which selling the Apple II become practical – this did not occur overnight.

      Steve Jobs did eventually reach his goal of building a computer for people with the Apple II, but the step of building the Apple I was really important!

      So baby steps folks!

      Baby steps!!

      The Apple I was NOT the dream computer that everyone needed nor wanted, but that was Jobs FIRST choice since no other practical choice existed!

      Ross’s has many times stated his goal of producing affordable devices for consumers– just like Steve Jobs had the idea for Apple. However a series of steps have to occur before such devices can arrive at the consumer level.

      I mean, should have Steve Jobs sold his Apple II design so that people get computers in their hands faster? I suppose Jobs could have done this, but it also would have jeopardized his company and his ability to improve and build the Apple II. In fact, if too many had such an Apple II design, then likely few if any investors would spend money on a system or product that ANYONE can produce! And without that capital, no Apple II or LENR box is going to spring up!

      The problem is the investment dollars to produce low cost consumer LENR devices does NOT exist right now. Until the investment community is convinced that such devices work, then the BEST approach is to start selling the technology ANY WAY possible.

      And utilities companies and governments don’t control LENR. In fact they don’t like this technology at all – near the LAST THING on earth they want! (this is a whole post and subject of its own!).

      So Rossi is by-passing governments, by-passing utilities and selling such energy directly to those needing such energy (and yes, those that can pay).

      If someone has a better strategy then Rossi to get LENR out, then I am all ears!

      Albert D. Kallal
      Edmonton, Alberta Canada
      [email protected]

      • Mytakeis

        Much appreciate your explanation.

        “Rossi’s likely better to boot-strap the funds for a consumer device by
        first selling a commercial device. And this selling of the energy PAVES
        the way for investment into the LENR industry.”

        Only the promise of a new societal landscape wants me to see a lightening advent of LENR. I realize it will be a step-by-step process, yet your detailing how that works makes me feel confident that this will happen.

        So, many thanks,

        Alan F. Schechter
        Munich, Germany
        [email protected]

      • Omega Z

        Great post Albert.
        Obviously, it could be expanded on, but there’s limitations in a blog.
        However, If one wants to mass produce a product at cheap prices, there is a process & Rossi understands that. By targeting those with deep pockets 1st, you receive greater returns & faster expansion with declining costs and cheaper priced products.

        Those less well off & less able to afford the initial product can now benefit from it. It was this process that lets even the poor have access to computers today. I know of no other process that would have allowed this. At least not within the short period in which it took place. Anyway, Good post.

      • TomR

        Very good post Albert, I would add that if it wasn’t for the foot dragging on the safety certification of the domestic heater and the IP problem, we would be able to buy a domestic heater at a reasonable price right now. I agree that you are right about everything with the way things are.
        I hope that the people, complaining about Rossi not producing the domestic heater right now, aren’t causing him stress and anxiety. I believe he is handling things in the best way he knows how.

    • Zack Iszard

      Methinks you misunderstand what profit in business is principally for. Rossi and IH won’t seek profit first for personal gain, but to reinvest in the business, to enlarge and advance it’s capabilities. This is necessary in order to provide the production capacity in order to help liberate whole populations from energy costs. Capitalism excels in a world of scarcity as it is more efficient at allocating resources than any kind of command economy. As advancing technology continues to reduce scarcity, the paradigm of capitalism won’t go away; rather, more people will be able to participate and it will seem more fair. Profit generation is what drives this technological advancement. In my opinion, grouping all profit-generating thought as evil is shortsighted and ignorant of the values that the free market has brought to the world around us.

      In-home electricity was once a luxury, but now it is viewed as an entitlement in the developed world. The same is now true for the internet. The simple truth of the matter is that in business, growth is key, whether measured by reduction of cost, increase in production or service output, or acquisition of assets. What Albert describes in the above post is that the sort of incremental roll-out that seems to be IH’s target abides by fundamental rules of business paradigm shifts. The refrigeration example (of a paradigm shift) has had profound impacts on daily life in the developed world, namely in the storage life of food, which has made the foodstuffs industry cheaper and less wasteful. How many poor people benefit from cheaper food? Yes, the change was evolutionary, and not the feel-good rapid revolution we all desire, but it’s better than it not happening, and trying to force it with legislation doesn’t work as well (“red” China and the former USSR?).

      For the following, I’m assuming you live in the US or EU. As for general disdain for large businesses and the selfishly super-rich, please understand that they are two separate things. If you built your own house from timber on your land and tools you manufactured, built your own transportation from scratch (car, motorcycle, bike, etc.), grow your own food, dug your own water well and septic system, built your own electricity source, and founded your own ISP, then congratulations for being completely independent of large business. Otherwise, grow up. If you hate the 1%, spend more focus on the epidemic of purchased government intervention in the economy to benefit some businesses (i.e. subsidies). When buying politicians is as astoundingly profitable as it is, you can bet the less savory companies will jump all over it. The key is to close these loop-holes, while focusing more on punishing truly exploitative business practices. In other words, don’t hate the players, hate the game.

      • Zack Iszard

        My apologies for beating a dead horse with the above post! I can clearly see that Albert did a fantastic job of demystifying why incremental advance is the only way forward.

      • Mytakeis

        I can only agree and say my black/white division of good/evil took not into account the good free market generates, when the goal is human betterment vice only profit. As you said; “In my opinion, grouping all profit-generating thought as evil is
        shortsighted and ignorant of the values that the free market has brought
        to the world around us.” I really love this site, and see a great world ascending from concepts and strategies herein contained. Once again, Thanks!

      • To understand both the reason to support capitalism (the real one) and the reason to criticize current financiarized capitalism you can read

        Herdando De Soto

        you describe well that capitalism structurally save resources, including human effort, mineral resources, pollutions.
        what we see as consequence of evil capitaism is simply the consequence of crony capitalism, of state and rent-seekers alliance.

    • kenko1

      Rossi,initially , was going to manufacture and sell a galizzion e-cats making them so cheap that his competition couldn’t compete. Why create an owners manual if that was not the case?

      Someone ??? convinced him to adopt the strategy of selling the power and not the device. Kinda like selling 56k over fiber optics.

      • Mytakeis

        That someone, perhaps divine intervention! Seriously maybe some synchronicity took hold. Only have to want it, know it will succeed, and watch it happen.

      • Omega Z

        ->”Someone ??? convinced him to adopt the strategy of selling the power and not the device.”

        What makes you think this is Rossi’s doings?
        I was a little slow to recall this, but Hydro Fusion, A Rossi Licensee advertised for a customer for just this purpose on June10th 2013.
        Wanted: Pilot Customer for ECAT 1 MW plant
        10 Jun 2013/in News

        Hydro Fusion is looking for a Pilot Customer for the first ECAT 1 MW Plant to operate in Sweden. The customer will only pay for the energy produced by the ECAT, i.e. Hydro Fusion will take responsibility for all associated costs including: the plant itself, installation and any transportation costs. In return the Pilot Customer agrees upon
        read more at:

      • Omega Z

        When this 1st was asked of Rossi, He didn’t appear to be aware of it.
        On Follow up, he jumbled some words together about agreements with Licensees.

        • ecatworld

          Actually, I contacted AR who quickly confirmed this to me via email. Later, he gave me a short statement I could publish.

    • Steven Irizarry

      well that murdered my interest in this technology…i have zero interest in endorsing rossi

      • Mytakeis

        You feel Rossi joins Wright Bros and Tesla as originators who are left behind while their inventions grow and multiply? Your opinion borders on incomprehensibility to me.

        • Steven Irizarry

          this technology should be open sourced…rossi is holding it back

  • Omega Z

    “a flight for $5 from LA to New York”
    Silly boy. It takes a lot of people to keep that plane in the air. No way you’d get a $5 flight even from 1 N.Y airport to another N.Y airport.

    • Zack Iszard

      Not a flight, but a “flight”. This example of a hypothetically super-cheap teleportation system is a powerful one in Albert making his point. If it only cost you $5 to teleport a person from NY to LA (presuming no substantial time constraints on people per hour), you wouldn’t sell tickets for just over cost. You would sell tickets fur just under the competition’s equivalent price, make mad profit, and built more teleporters. Once you had quite a few teleporters, you could finally drop your price. Without considerable volume of production or service, a disruptive technology is not disruptive. This is the exaggerated point Albert was trying to make.

      Calling him a “silly boy” when you didn’t actually read his whole point is… well, you know…

      • Omega Z

        Yes, I misunderstood.
        By the way, I didn’t post to Albert.

  • Bernie Koppenhofer

    So, Rossi’s licensees will sell heat rather than E-Cats. Makes sense to me, easier to keep IP secret, fewer people need to be trained to operate, probably the fastest way to get LENR introduced, probably more profitable for licensees and Rossi.