Connect with us

Hi, what are you looking for?

home geothermal


Dandelion Energy Ready To Expand Ground Source Heat Pumps

There are two types of heat pumps — air source and ground source. Air source heat pumps have to be able to work with outside air temperatures that can vary between -20 degrees to +120 degrees F. Ground source heat pumps work with the temperature of the Earth hundreds of feet below the surface. Typically that temperature varies only a few degrees during the course of a year.

The basic principles are the same — a heat pump moves heat from one place to another — but the technology for ground source machines is significantly different that that used to make air source machines.

Dandelion Energy started life as part of Google’s X laboratory and incubator, the place where Google engineers get to play with “moonshot” programs — ideas that could have a significant impact on humanity. Dandelion brings in a drilling rig to bore a hole in the Earth several hundred feet deep and uses it to connect a specialized heat pump to the stable ambient temperatures found at the depth.

The biggest expense in ground source heat pump systems is drilling the hole. Anyone who has paid to have an artesian well drilled knows they can be quite expensive. Dandelion engineers have been hard at work designing specialized drilling equipment and the business has been growing over the past few years.

But the Inflation Reduction Act has given the entire heat pump industry a shot of adrenaline. According to Canary Media, Dandelion Energy has just raised an additional $70 million to expand its business from a group of investors including Breakthrough Energy Ventures and Lennar, one of the largest homebuilders in America, among others.

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,” CEO Michael 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.”

Gauging Demand For Heat Pumps

Dandelion Energy

Image courtesy of Dandelion Energy

Like most tech companies, Dandelion’s basic idea was sound, but was there a market for ground source heat pumps, which cost roughly double what a normal oil-fired heating system costs? To find out, Dandelion zeroed in on Westchester county between New York City and Connecticut. So far it has installed over 1,000 ground source heat pumps in that area and tripled its commercial operations since the beginning of this year.

The spike in oil and gas prices following the Russian assault on Ukraine has boosted interest in ground source heat pumps and significantly shortened return on investment times. Congress helped by included thousands of dollars in tax credits for home electrification in the Inflation Reduction Act and groups like Rewiring America have been pounding the pavement evangelizing the benefits of heat pump technology.

The easiest way to install home geothermal heating is to do so as part of new construction, which is why having Lennar as a strategic investor is so positive. Dandelion will spend some of its new capital developing a new-build market in partnership with other homebuilders, Sachse said.

Thus far, Dandelion mostly retrofits existing homes and it has created a less invasive drilling rig to fit into customer yards. But it still has to confront the challenge of timing. Homeowners who recently paid for fossil fueled heating equipment are not eager to rip it out and replace it before it breaks. And when heating equipment does break, people generally want the quickest and easiest replacement.

A typical ground source heat pump costs about two-thirds less to operate than a conventional furnace or boiler. Most Dandelion customers get a loan from the company and use the money they save each month to make the loan payments. The system typically pays for itself in seven years, Sachse said, which means customers enjoy much lower heating and cooling bills for many years thereafter.

The Inflation Reduction Act gives households a 30% tax credit for ground source heat pumps while third party owned systems get a 40% credit if they meet the criteria for domestic manufacturing. Prior to the IRA, third party owned heat pumps could only access a much lower tax credit. Faster payback equates to an increase in demand.

“From a company standpoint, we think that if we’re able to do 2,500 to 5,000 homes a year, that is public-company scale,” Sachse said. He added that electrifying home heating and cooling is a big enough market to support multiple billion dollar companies, as regions such as Europe and states including California, Washington push to eliminate fossil fueled heating equipment.

The new funding provides at least two years of runway for Dandelion, and the goal is to get at or near cash flow breakeven point by then. If ever there was a time to consider ground source heat pumps, that time is now.

Appreciate CleanTechnica’s originality and cleantech news coverage? Consider becoming a CleanTechnica Member, Supporter, Technician, or Ambassador — or a patron on Patreon.

Don't want to miss a cleantech story? Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.
Written By

Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. 3000 years ago, Socrates said, "The secret to change is to focus all of your energy not on fighting the old but on building the new." Perhaps it's time we listened?


You May Also Like

Consumer Technology

Sales set to hit new records, helping save energy and emissions, but policy action is needed to unblock bottlenecks such as upfront costs and...


New building codes in Washington state heavily incentivize electric heat pumps -- and they're good for even the coldest climate there. It's a trend...


The US heat pump market is growing, but it needs to accelerate to achieve critical climate goals. Across the United States, over 15 states...

Consumer Technology

You’ve heard of tree huggers? Well, on October 26, the Advanced Water Heating Initiative and hundreds of other organizations will celebrate another cylindrical climate...

Copyright © 2022 CleanTechnica. The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries.