VPhase – A Company To Watch

VPhase plc (VPHA), a leading developer of energy saving products for home and small commercial applications based upon voltage management, will launch its first commercial energy saving product, VX1, at Interbuild 2008, the UK’s largest building industry exhibition, in October this year.

VX1 is the result of continuing research and development undertaken at VPhase’s Capenhurst site and this launch will be the Company’s first commercial product from a range of energy saving devices based on the Company’s growing intellectual property.  The Company has already secured its supply chain for volume production and supply of this first product.

To Explain
VX1 is a low-cost voltage reduction and regulation system that testing has shown can reduce the energy consumption of many household appliances by 5%–18% whilst delivering an equivalent reduction in CO2 emissions. In the UK the nominal incoming voltage to properties is set to 230 volts; however, the actual level of voltage delivered can legally vary between 207 volts and 253 volts. Most electrical products in the UK are designed to operate at the lower level and for many appliances any excess voltage does not necessarily give additional performance; rather, the surplus energy is wasted as heat.

VX1 is designed to stabilise the voltage in homes or offices to a lower level and when fitted to the fuse box (‘consumer unit’) in an average UK could result in a substantial reduction in electricity usage and a corresponding 10% reduction in electricity bills.
In the last few weeks the average joint gas and electricity bill has risen by more than £200 a year (£4 a week) to £1,211, with the electricity component increasing to almost £500.  Since 2003, gas prices have increased cumulatively by more than 130% and electricity prices by more than 94% and industry experts suggest that prices may be forced to rise again in January.

The installation of a VPhase VX1 device could offset a significant proportion of these price increases. Based on average domestic UK electricity usage and a 10% reduction in electricity bills, by using the VPhase VX1 product UK consumers could see more than £50 per annum saving – achieving payback within approximately two to three years, along with the corresponding environmental benefits.  However, with increasing energy costs, and for those homes with a higher than average electricity bill, that saving could be much higher and the payback period even shorter.

Route to Market
VPhase will focus on selling this first VX1 product through multiple channels including consumer unit manufacturers and via partnerships with utilities, house builders and housing associations. In the UK alone approximately 1.4 million consumer units are sold annually and the Company estimates that the EU market equates to approximately 7 million consumer units per annum.

UK uptake of energy saving products, like VPhase’s VX1, is encouraged by the Government’s Carbon Emissions Reduction Target (CERT) scheme. This is expected to stimulate approximately £2.8 billion of investment in carbon reduction measures, mainly via subsidies, in the period from 2008 to 2011. The Company is currently in discussions with a number of utilities to carry out independent testing of the VX1 product, with the intention of determining its suitability for the scheme.

Announcement of the new product (on 31st July 08) saw a further climb in the Company’s share price, and inbound enquiries from trade partners. Given ever-escalating concerns about energy price and security, investor interest in VPhase is expected to remain strong.

Interbuild will be held in Birmingham from 26 to 30 October 2008.