Launched today in Nature Energy, a new study led by the Center for Global Sustainability (CGS) researchers examines the cost of heat pump installation in American households and the effect on house prices and home values. They find that heat pumps not only offer an energy-efficient source of electrified heating and cooling but also increase the value of the average home by adding on average a US$10,400–17,000 price premium for households in nearly half of the U.S. states.
Dandelion, the Google spinout making geothermal heating and cooling for homes, just raised $70 million to grow its operations as market demand surges.
The startup focused on heat pumps well before the building-decarbonization tool arrived at its current moment in the spotlight. Dandelion powers heat pumps with slimmed-down geothermal drilling in a household’s backyard. By drilling hundreds of feet into the ground, Dandelion taps a secure reservoir of heat in the winter, and in the summer, the pump removes heat from the house to cool it.
Now the company is tapping deeper reservoirs of capital. The financing was led by the venture arm of national homebuilder Lennar and the energy transition investing division of NGP. Breakthrough Energy Ventures participated alongside several other investors.
This round was intended to be an extension of last year’s $30 million Series B, but “there was just more demand than we anticipated,” CEOMichael Sachse told Canary Media. As a result, this B-1 raise surpassed the total $65 million that the company raised previously.
“There is a lot of understanding that heat pumps are going to be a big part of the solution” to decarbonizing buildings, Sachse said. “Investors are trying to understand how they might play in the heat pump space.”
In 2017, Dandelion graduated from Google’s “moonshot factory,” X, with some promising IP around residential-scale geothermal. Prior to that, people could hire a local contractor to drill a well in their yard, but nobody had tackled home geothermal as a technology problem and innovated on it with Silicon Valley–style R&D.
Tech is great, but Dandelion needed to prove customers actually wanted this. The startup shifted operations to New York state, where it could go head-to-head with gloppy old fuel-oil heating, offering cleaner heat and fuel cost savings. In Westchester County, utility Con Edison can’t even supply new gas hookups to homes, so Dandelion jumped in to fill the gap. By now, it’s installed 1,000 systems across New York, Connecticut and Massachusetts, and tripled its commercial operations since the start of 2022.
Meanwhile, macro trends have made Dandelion’s offering all the more appealing. More households recognize energy costs as a pain point, due to general inflation and energy-specific price spikes stemming from Russia’s invasion of Ukraine. Congress included thousands of dollars in tax creditsfor home electrification in the Inflation Reduction Act, and groups like Rewiring America have been pounding the pavement evangelizing the benefits of heat pump technology.
Continue reading “Pump Up the Volume: Heat Pumps Warming Up”
