In March 2018
Scientific Environmental Design

Not your traditional early-stage entrepreneurs: Harry Boody, left, started tinkering with HVAC systems in the 1970s after getting burned by a high energy bill. William Millis, a former High Point hosiery executive, is working to spread Boody’s work to a mass market.

By Mark Tosczak

Harry Boody didn’t set out to disrupt the heating, ventilation and air-conditioning business. He was just ticked off that his new “energy-efficient” home in High Point was costing him four times as much in energy costs as predicted by his builder.

“This was in 1977,” Boody says. “There was no definition of what energy-efficient meant.” The monthly bills were more than he could afford. “It took that American dream right away from me. It made me so mad.”

At the time, Boody was an engineer at the WGHP television station in High Point with an aspiration of becoming director of engineering for a major network. That dream didn’t pan out, because Boody chose a different path. He spent two years teaching himself about home energy efficiency and tweaking his home’s ductwork and air flow, resulting in an 80% cut in heating bills, he says. Soon, he was applying what he learned to friends’ houses, including TV anchors who helped spread the word. He eventually left broadcasting to start Energy Innovations, which grew to 32 employees by 1988.

But Boody was miserable, his health failing. “I went from being this one-on-one tech geek to now being president of a company dealing with employees,” he says. “It tore me up inside.” He took a year off, then retooled his business as a small consultancy.

It stayed that way until two years ago, when a client, former High Point hosiery executive William Millis, asked about Boody’s retirement plans. Millis’ family controlled one of the state’s largest hosiery companies before its sale to Sara Lee Corp. in the late ’80s. Boody, who is in his 60s, didn’t have a plan, which was a problem because he and his wife have a school-age daughter.

Millis’ pitch was straightforward: Boody needed an exit plan, and countless frustrated homeowners needed Boody’s expertise. Millis became CEO in the renamed Scientific Environmental Design, which launched in 2016 to take Boody’s life work — reducing heating and air-conditioning costs — and scale it to thousands of homes a year. They recruited a handful of executives and set a goal of raising $1.5 million. As of January, they had collected about $750,000, much of it from Boody’s former clients.

The company’s value proposition is simple: Homeowners pay SED to design systems, ducting and insulation and then supervise installation by an HVAC company. Millis is seeking to patent a device that attaches to the system to manage air flow and dehumidification. After installation, SED guarantees a homeowner’s monthly heating and cooling costs won’t exceed a set amount. If the bill comes in high, the company pays the difference. The guarantee is good for the life of the house.

SED focuses on new construction — primarily custom homes. Installations cost about 50% more than traditional methods, which typically range from $5,000 to $15,000 per home, more for larger ones. Homeowners can save an average of about $35,000 in energy costs over 15 years, says Neal Kearney, a former Marine Corps buddy of Boody who is SED’s vice president of sales and marketing.

Work is progressing on software to automate Boody’s process, and this summer SED will offer certification courses to enable HVAC contractors to sell the technology and guarantee. “All of that work has been done to take the company from a one-man boutique operation to a company that could do thousands of homes a year,” Kearney says.

About half of HVAC systems in the U.S. aren’t installed according to the manufacturer’s standards, causing a 30% to 40% efficiency decline, says Todd Washam, director of industry and external relations at Air Conditioning Contractors of America, a Washington, D.C., trade group representing about 4,000 HVAC contractors. “Builders will put in some really high-efficiency system,” he says. “Then they will cut down on the ductwork, or they won’t properly insulate the attic.” Also, many building inspectors lack adequate training, Boody adds.

SED cites some remarkable case studies, such as an 11,069-square-foot Texas house with an average energy bill of $126 a month. While the company is in its early stage, the market potential is huge, with U.S. HVAC equipment sales totaling $17.5 billion in 2016, according to research firm Freedonia Group.

A lot of people need the savings: A fifth of U.S. households in 2015 skipped basic necessities so they could pay their energy bills, a federal study showed.

Homeowners need to get smarter about energy efficiency, Boody says. “[America] can be truly energy independent,” he says. “We’re literally going to revolutionize the HVAC industry.”

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