Geothermal heat pumps are a climate-friendly option for residential heating and cooling, and the core technology behind them is not new. So what’s prevented geothermal heat pumps from becoming widely popular?
Kathy Hannun focused on that question when exploring geothermal energy at X (formerly Google X), and ultimately spun out a startup, Dandelion Energy, designed to address the biggest obstacles preventing geothermal heat pumps from scaling: they can be costly upfront (despite saving homeowners money in the long-term), their installation process requires coordinating many different stakeholders, and not many homeowners are aware geothermal heating is an option for them.
Challenge: The Upfront Cost Obstacle
Dandelion Energy’s solution: Dandelion Energy offers financing so that homeowners don’t have to pay anything upfront to install a geothermal heating and cooling system, and instead pay for the system over time. This can work well because the monthly loan payments are typically less than what the homeowner was paying for fuel oil or propane before getting geothermal, so they are coming out ahead from the start.
As Hannun, co-founder and president of Dandelion Energy, puts it: “The core thing I want people to understand is that geothermal heat pumps are very cost-effective for homeowners who are using fuel oil or propane. It’s an attractive payback, and if you’re financing, you save money right away.”
Challenge: The Complex Installation Obstacle
Dandelion Energy’s solution: Dandelion Energy is a one-stop-shop for design and installation of geothermal systems. This vastly simplifies the process for homeowners, while also allowing the startup to make each step of the installation work more efficiently—which means lower installation costs.
“What sets us apart is that we’ve vertically integrated the process,” Hannun says. “By specifying and owning the drills, employing the drillers, designers, salespeople, and installers in-house, and providing the financing to the customer, we’re able to optimize the full end-to-end process, and that takes a lot of costs out.”
Challenge: The Lack of Homeowner Awareness Obstacle
Dandelion Energy’s solution: Ever since its founding, Dandelion Energy has been on a mission to spread the word about the viability, affordability, and positive climate impact of geothermal heating and cooling. Its website teaches visitors about geothermal heating and cooling, putting the environment front and center: “A five-ton Dandelion geothermal heating and cooling system reduces a home’s carbon emissions by about 80 percent per year when switching from fuel oil,” it reads.
Dandelion Energy has been successful in its efforts to make a big splash for geothermal. The startup’s been featured everywhere from Forbes, to the Wall Street Journal, to WIRED, and last year it raised a $30M Series B led by Bill Gates’ Breakthrough Energy Ventures. The roughly 160-person company is now serving customers in New York, Massachusetts, Connecticut, and parts of Vermont.
Hannun says Dandelion Energy has a steady pipeline of customers, and ramping up its drilling operations to meet demand will be a primary focus for the coming year. The company recently acquired Glacier Drilling as part of that effort.
Dandelion Energy has also been able to quickly jumpstart its hardware team’s efforts by being a Greentown member, according to Hannun. “Having the shared prototyping resources has been really great for us,” she says. “It allowed us to start our small but mighty hardware engineering team really quickly. We staffed it and we didn’t have to worry about leasing industrial space, getting WiFi hooked up, figuring out how we’re going to do prototyping etc. Having a built-in community that already knows what startups doing hardware innovation need made it very easy to get started.”