Sacramento’s Beutler Corp. pins hopes on water-cooled air conditioners

Green tech doesn't have to be new tech. And executives at Sacramento's 61-year-old Beutler Corp. are hoping that insight will lead the huge climate-control contractor out of the wreckage of the real-estate collapse.

This month, workers in Beutler's 320,000-square-foot McClellan headquarters are tightening the last screws on test models of a superefficient, throwback air conditioner: the AquaCool. An update of a design last mass-produced for homes decades ago, it uses water instead of air to cool the refrigerant.

On a blazing Central Valley afternoon, according to a report by the Sacramento Municipal Utility District, a water-cooled air conditioner uses less than half the power of a standard air-cooled air conditioner, and as much as 40 percent less than "high-efficiency" models.

SMUD is backing a $90,000 program to install and monitor the AquaCool in local homes.

"It would be an immense help with the peak-electricity problem" on hot summer days, said Chris Scruton, an air-conditioning expert at the California Energy Commission.

Beutler President Rick Wylie is betting that the revival of the water-cooled air conditioner will launch his company into the thriving green-building market. Five years from now, he hopes Beutler will be installing 10,000 AquaCools a year and selling another 40,000 to other contractors at roughly $2,500 apiece.

He needs the business.

In the first half of the decade, privately held Beutler rode the building boom to become the nation's largest new-home installer of heating, ventilation and air conditioning systems. With a full-time work force of 1,500, the company handled jobs from Bakersfield to San Jose to Chico. It controlled 60 percent of the Sacramento-area market and took in revenue of $212 million in 2005.

Then came the bust. For 2008, Wylie is hoping to do $65 million in business – an almost 70 percent drop from the peak. The company now employs just over 500 year-round workers.

Last week, while some areas of the company's McClellan complex bustled, others were quiet. In several storage bays, hundreds of air-conditioning units sat stacked to the ceiling in boxes.

As the real-estate bubble burst, Wylie realized he needed to diversify. At the same time, California was moving ahead with the nation's most aggressive greenhouse gas regulations.

"Suddenly, that puts so much more value in this type of technology," Wylie said. He decided to bet on green.

"There are going to be increasing changes in the way a home is heated and cooled," he said, watching through safety goggles as the first AquaCool units waited for their finishing touches on the Beutler assembly line.

Beutler, which has never before manufactured its own air conditioners, has spent $250,000 to develop the AquaCool, Wylie said, and plans to invest a more to scale up production. He's optimistic that the region's builders will begin installing AquaCools on some new homes shortly.

Beutler also is working on an integrated solar panel and water heater that would deliver both electricity and hot water from a single unit. In addition, the company has pioneered ways to optimize the efficiency of conventional, air-cooled air conditioners for the Sacramento climate, said the Energy Commission's Scruton.

"We're looking at ourselves as green rebuilders," said Wylie, a compact, plainspoken 51-year-old who started with Beutler in 1977. In the past year, Beutler's energy-efficiency retrofit orders have grown from just a tiny fraction of the company's business to nearly 20 percent.

Beutler, of course, is only one entrant in a green-tech field that ranges from garage inventors to energy titans Shell and BP.

But energy-efficiency experts said the company has a good shot at carving out a chunk of the market. It has the size and reach, they said, to at once manufacture, market and install its energy-saving innovations, which should help Beutler clear some of the barriers that have kept many clever new ideas from ever reaching customers.

"They're very progressive, and I have a lot of confidence in their ability to solve problems," Scruton said.

About the writer:

• Call The Bee's Jim Downing, (916) 321-1065.