SOUTHPORT – Five years ago, our state was in a panic over oil. Eighty percent of households — and most of our own customers at Midnight Energy Co. — depended on this commodity.

That summer, the price had risen from a little over $2 a gallon to almost $5 in a few months, and the heating season was coming.

As a business owner, our challenge was twofold.

First: Our customers needed to be protected or we wouldn’t have customers. No one could pay these anticipated bills.

Second: We needed to survive, and there was no way to make a business plan with this kind of price volatility. Oil dealerships had become nothing more than legalized gambling establishments, through no fault of their own.

Our dealership resisted purchasing fuel at the top of this panic and resisted selling it to our customers. We got lucky. Oil prices dropped like a stone when heating season began, and the speculators scattered. Demand could not support these prices. The game was up.

Enormous damage was done to household budgets that had locked in for that season before the price dropped. And dealers that had sold at these high prices were at risk, too.

No one won that season, and many lost more than they could afford.

We resolved to find alternatives to offer our customers. We set the rules of our analysis simply: An alternative — a true alternative — would not be a derivative of the old game.

We already sold commodities (oil and gas), and all commodities shared the same essential weakness: They could be played. That same year that oil prices spiked, pellet prices jumped 100 percent. And do not forget Enron, lest you think gas is immune.

Since we were not in the business of politics or climatology we set aside any personal feelings and focused on what good businesses do: make financial arguments with the aim of protecting our customers’ budgets and supplying value at a profit.

We were asking for a lot. Fortunately, a lot of innovating was going on.

What surprised us most was the simplicity of the solution: All the energy we needed to heat and cool our buildings was already under our own feet.

GeoExchange is the science of using the solar energy stored in the earth to keep us warm and cool. It was not a new science, yet it was little discussed and often grossly misunderstood.

It did, however, have the hallmark of a true business opportunity: Early efforts failed because of poor execution and not because of weaknesses in the technology itself.

We set our master oil technicians to the task of converting our own buildings as a test case. We experimented with various approaches and were encouraged by the result. We signed up for the best available training and certification and, in time, sold our first systems.

Four years later, with several systems installed, we can conclude that GeoExchange has a place at the energy table. The performance results were so promising that it surprised us that there weren’t more of these systems out there.

Why? GeoExchange shares the same upfront intensive capital costs as other solutions, such as gas and its pipelines, wind and its farms, solar and its fields. But GeoExchange is an individual decision and as such has not benefited from large-scale financial aggregators with commensurate pools of investment capital.

This is not because GeoExchange cannot show a great financial return. It can.

Financial results show that a system well designed and installed could return 4.5 percent or more to an investor who lent 100 percent of the system costs to a customer (or group of customers) over 10 years.

During that time, the customer would benefit from positive cash flow (against fuel alternatives) and reap huge fixed savings after the notes are paid off. GeoExchange is cheaper from Day One, and system life is 20 to 40 years.

We need to attract capital to these proven returns.

If scale is the problem, let us consider a virtual utility. Let us create institutions that organize GeoExchange communities equally with those that front pipelines, wind farms or solar fields. Let us compare these options for financial results in this leveled playing field and, often, GeoExchange would win.

Energy transformation technology is ready. Our challenge now is about adapting old models of financing change. Absent that, our choices will be limited for the wrong reasons. Other governments and their investors have figured this out. We remain behind the curve.

Tom Myette of Southport (email: [email protected]) was president and co-owner of Midnight Energy Co. in Newcastle for seven years, until February 2013.