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CEO/CFO Magazine Interview PDF Print E-mail

Sauer Energy to Empower Consumers with Rooftop Wind Turbine for Homes and Small Businesses: September 24, 2010 Interview conducted by: Lynn Fosse, Senior Editor, CEOCFOinterviews.com

Company Profile:

Newbury Park, California-based Sauer Energy, inc. (OTCBB: BCOZ) is a developmental stage, wholly owned subsidiary of BCO Hydrocarbon that designs and produces small, cost-effective wind turbine systems designed to be sold as a kit for roof mounting on an individual home or small building. Utilizing its advanced patented and proprietary technology, SEI’s vertical axis wind turbines (VAWTs) are intended for the home and small to mid-size enterprise marketplace.

SEI wind turbines are designed to enable its customers to produce their own renewable energy at a low cost per kilowatt hour, save on their utility bills and help the environment. SEI is in the process of commercializing its VAWT product line for manufacturing and distribution into one of the fastest growing segments of the global energy marketplace. For more information, please see www.sauerenergy.com.

Dieter R. Sauer, Jr., President, CEO and Director

With his vision to harness the power of wind and secure a future of affordable sustainable energy, Mr. Sauer founded Sauer Energy in 2007. As CEO, he brings over 30 years experience in corporate finance, banking, commercial real estate investments and capital management.

His successful track record in business and finance includes officer and senior management positions at leading financial institutions including California Federal Bank, Avco Financial Bank, Unity Savings & Loan and Quaker Federal Bank.



CEOCFO:
Mr. Sauer, would you explain about the structure of the company, as it has been recently changed?

Mr. Sauer: Sauer Energy recently acquired BCO Hydrocarbon, a publicly traded company. The merged company is still named BCO Hydrocarbon and the stock ticker symbol is BCOZ. We will change the company name to Sauer Energy -- the sole operating business -- and the ticker symbol, later this month.

I am the founder and CEO of Sauer Energy and the newly merged public company. We use patented, revolutionary technology to develop and produce wind turbines that can be used on single-family homes or small buildings. Unlike those massive wind turbines you sometimes see out in the deserts or mountains that are several stories tall, ours are cylindrical, sit about five feet high, just six feet in diameter, and are designed to be affordable for consumers and small businesses. We address a vast unmet and growing demand for a consumer friendly wind turbine.

CEOCFO: Who is looking into residential wind in the U.S. now and how do your wind turbines work?

Mr. Sauer: Wind is the ultimate renewable energy source. It is unlimited. It is free. Everyone would generate his or her electricity from the wind if we could make it practical to do so. I founded Sauer with just that vision in mind: to lower energy costs, decrease our dependence on foreign oil and reduce our environmental footprint. Empower – literally – the consumer and small businesses with the same wind technology available to large utility companies, but with an affordable and easy-to-install wind turbine.

We plan to introduce our wind turbines into the market beginning in early 2011. Our marketing plans call for setting up floor displays at major home improvement and appliance retailers, in which the retailer may show a DVD explaining the benefit and installation of our wind turbine for your home. You would only need a general handy man to install the unit on your roof in about an hour. You will then need a general electrician to wire the electrical connection back into your meter box in an hour or two. Very simple really, our units are designed for plug & play functionality. The Sauer Energy wind turbine is also designed to be maintenance free, able to withstand harsh weather, and to carry a ten-year warranty -- longer than any other manufacturer at this time, I believe.

Our design uses revolutionary technological advancements, so we are excited to have just announced a fully functioning prototype. We are in the process of going through independent certification from which we are going to set new, higher industry standards for residential wind turbines. We are currently going through various government agencies and third-party engineering firms to gain these certifications.

CEOCFO: Are there particular geographic areas that are better than others, or is it something that can be used almost anywhere?

Mr. Sauer: Wind is the main ingredient for this to work so it can be used anywhere with wind. Depending on the landscape, urban, suburban or rural, it may function well on a one-story home or may need to be mounted higher or above a tree line for optimum wind capture. While a few areas may not have any wind, there is a great deal of wind through the Midwest, all the coastal areas and all the mountain regions. Consumers can go through the Department of Energy to access the wind maps to see if they are in a good region or not. Or you can just contact us and we can research it for you.

CEOCFO: Are electric companies or governments posing any problems for you?

Mr. Sauer: No. Actually, local governments and communities are mandating that their utility companies repurchase the excess electricity produced by consumers. Also, the federal government has set a goal that 20 percent of all energy consumption to come from renewable sources by 2030. Over the next 20 or 30 years, we want to hit those numbers from which wind supplies one quarter of all electricity.

CEOCFO: You mentioned that you are being certified and you are going to become sort of the standard. Would you tell us about the industry as it exists today; how many people are looking to get into it and what does Sauer Energy know that others don’t?

Mr. Sauer: Our industry is relatively new. Man has used wind for hundreds of years, adapting it for different usage, from pumping water to grinding grain. Now we are going to use it to generate electricity. As an industry, we are working to reduce the carbon footprint and wind is an ideal solution, especially if you can make it affordable and easy to install.

Sauer Energy is deploying revolutionary patented technology in our turbines that makes them highly productive while being so small yet affordable. We are targeting the individual homeowner, because almost no one is working to help the family lower its increasing utility bills. We are still at the beginning stage in the wind industry which I am confident has a great future.

Today is a great time to get involved in wind energy directly or indirectly to include owning your own electricity producing Sauer Energy wind turbine. In addition, you will add value for your home by branding it as renewable energy efficient. We also endorse solar, which has a great future. We like to be part of a solution and wind energy an important first step that we have to take as a nation -- one homeowner or business owner at a time.

CEOCFO: In general, how long does it take a customer to recoup their investment?

Mr. Sauer: We expect our turbines’ small size, robust electricity production and low cost will create a major competitive advantage. With average wind usage, our preliminary test results indicate an approximate 18-month payback including federal and other rebates and tax credits. After that, all the electricity produced is literally free and we are projecting that in a windy area, our turbine will produce about 500 watts, or 25 percent of electricity for an average 1,500 square-foot home.

Not many investments today will give you a return like that and after, say, two years you are generating pure profit while contributing to a better planet and U.S. energy independence.

CEOCFO: How do you get people onboard?

Mr. Sauer: People are seeing their utility bills increase while a sluggish economy shrinks their income, so the demand for a solution is already out there. Then, you look at the other side of the equation, at peak oil, and see that long-term oil prices are only going to go up. In addition, you see the dirty pollution from coal burning. People are asking the question, ‘what is the solution?’ For Sauer, part of that solution is to use what nature provides freely. We capture the wind and provide electricity. We will certify our product through the U.S. Department of Energy’s certification process. Sauer Energy is establishing a leadership position and beginning to set the standards for the industry.

CEOCFO: How are you going to market; what are your commercialization plans?

Mr. Sauer: We have to educate people and build awareness. We are planning a media and public relations campaign as part of our marketing plan. We are going to talk to the major retail stores, many of whom already express interest. There are also the various military contractors that are our logical customers, governments, rural communities where people do not have enough electricity or live off the grid and need another source of energy.

Worldwide, hundreds of millions of people live in rural areas where energy needs are underserved. Then we have the humanitarian benefit, doctors in a rural village, for example, that have no electricity but could set up one or more of our units. In addition, our turbines are portable and light. They set up one of our units to provide electricity and can charge special batteries to run a refrigerator where the medicine or food is kept. So, in rural areas with wind, our turbines are a logical smart purchase.

Wind has always been there, and Sauer Energy has the right technology at the right time to harness it with great efficiency. I believe we have the best technology including numerous new product design and utility patents. Once our certification is complete, we will be going into the marketplace with an aggressive marketing plan. We also expect the media will find our story and products exciting and newsworthy. We will produce educational videos, and will dedicate turbine units to schools and high profile government buildings to build mass-market awareness.

For the last thousand years, we have been accustomed to a non-renewable source of energy that has been very ineffective and ugly: that is, the chimney on everybody’s roofs. We have accepted the chimney that spews black smoke, but that few use nowadays to heat their homes, as initially intended. And, let’s not forget the satellite dishes everywhere. People will more easily become accustomed to seeing a Sauer Energy wind turbine that could be color coated to match the outline of their roof. That turbine will be viewed as a green source of energy and a proud statement of eco responsibility.

CEOCFO: How big are the turbines?

Mr. Sauer: Each blade of the turbine is curved and approximately two and a half feet wide by three feet tall. The unit requires about a six-foot diameter and is mounted about two feet above a roof line or about five feet tall in total -- about the same height as a standard chimney. You can paint it or have it custom made with different colors, logos, names or even order it with landscape camouflage or sky pattern. While people have become accustomed to seeing satellite dishes, and telephone poles, this offers the symbol of a clean source of energy.

CEOCFO: Where will you be manufacturing, and if it takes off quickly, can you gear up quickly?

Mr. Sauer: Yes, we are right now working with investors to raise growth capital to fund manufacturing and marketing. Without any marketing or advertising at all, word is getting out and we are already fielding calls each week that indicate a pent up demand from consumers and major retailers. We are located in southern California, Ventura County, and have a plan to build out our manufacturing facility in Southern California.

CEOCFO: What is the financial picture of the company?

Mr. Sauer: We have completed our research, engineering, development and prototyping. We are in the process of doing the performance certifications, which includes the wind tunnel test for the power curve. We are looking at filing additional patents to protect our intellectual property as we plan to later expand our product lines and add new, proprietary technological enhancements for scaled up units.

We are building our molds now. Our goal is to introduce production samples in the market in the first quarter of 2011, and begin ramping up from there into full production and national distribution throughout 2011.

CEOCFO: In closing, why should potential investors pay attention to Sauer Energy?

Mr. Sauer: We just became a public company a few weeks ago and are relatively undiscovered at this time while we focus on commercializing our turbines. We believe our consumer friendly turbines represent a quantum leap forward in wind power technology. Accordingly, we address an enormous and largely unmet potential global market anywhere the wind blows over 5 or 6 miles per hour regularly.

We are preparing to enter the market with a revolutionary new wind turbine that pays for itself and ultimately generates free electricity. Sauer Energy will be providing an instrument that is going to help people, improve lives, save money and improve the planet. This is not a fad; wind power will be around for the next two hundred years and we plan to stay at the leading edge of this technology with our patent estate and ongoing R&D.

We are at the infancy stage right now, and face a future as limitless as the wind and as large as the global energy market.