A Startup Enters The Heat Pump Water Heater Space Focused On A Smart Water Heater

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There are a lot of heat pump water heaters (HPWH) that have come to market recently. At the beginning of this decade, only a handful of manufacturers were making this hyper-efficient water heating product, and now we count 13 different brands of just tanked water heaters with more brands and form factors coming. At the nonprofit-led Advanced Water Heating Initiative, we offer every manufacturer the chance to present their product as a way to get information about innovations out to the industry and general public. We’ve profiled new manufacturers getting into the space like GE and Navien, and have also talked with the established market leaders who are bringing updated products to market like Rheem, Bradford White, LG, and A. O. Smith.

But all these companies have one thing in common — they are large manufacturers that have been making water heaters or heat pumps for a while. Excitingly, the HPWH market is now starting to attract startups, and the first one to market is called Cala, which brought out its product late last year. I sat down with the company to discuss how to become a startup in the water heating world, what the journey is like, and how their product is differentiating itself from a crowded field.

How A HPWH Startup Gets Started

Michael Rigney, Cala’s CEO, told me in an hour-long interview on our nerdy tech show Heat Pumps and Cardigans, when you embark on a start up, the first thing you want to do is “convince yourself it’s a bad idea.” That’s because you’re going to spend the next 10 years of your life on this project and you only want to do that if you think you’ve got a strong concept.

The Cala team saw that heat pumps and HPWHs are on a long term growth trend with increasing market share every year. They also saw HPWHs as a unique and underappreciated piece of equipment that is the nexus of three important trends — electrification (HPWHs can eliminate fossil fuel use in water heating), energy efficiency (HPWHs are 3x more efficient than electric water heaters which make up 46% of water heaters in the US), and energy storage (water heaters are essentially a thermal battery).

In 2021, after pressure-testing the idea, they moved forward and began designing a heat pump water heater. Cala focused on creating a smart water heater, one that could incorporate many different kinds of data, utilize predictive controls, and had the hardware components to manage heating speed and tank temperature according to the needs and preferences of each home.

What Does It Mean To Have A Smart Water Heater?

We should start by saying that virtually all HPWHs on the market are much smarter than traditional gas and electric water heaters. They typically have control panels, apps, and you can typically set up schedules for your HPWH to run at specific times.

For Cala, a smart water heater goes beyond this basic functionality. Their goal is to create a water heater that can take a lot of information; how much water a home typically uses at a certain time of day, what the price of electricity is, what other home appliances are doing, if the home has solar energy, and heat all the water all water a home needs in the most efficient way possible.

I can appreciate the need for a smart water heater, because as a super nerd, I currently do a form of this work manually. On sunny days in the summer, I turn my water heater tank up to 140 degrees (I have anti-scald devices on my faucets) so that my HPWH will run on the energy coming off my solar panels and give me free AC.

Intelligent water heaters would conceivably do this nerd work that no one but me would ever do, automatically.

You might think of the Cala water heater like a smart thermostat. It is a system that plans water heating ahead of time. The software and hardware that allow the Cala water heater to do this are the following:

• Predictive controls: One of the first things Cala did when making their water heater was to license a predictive control technology made by NREL. These predictive controls allow the water heater to take data such as household water usage, temperature, and external signals like electricity pricing — to determine when and how to heat water. Rather than reacting when the tank gets cold, the system anticipates demand and prepares for it.
• Integrated flow sensor: This measures the water that is leaving the tank. Having one on a water heater is both unique and important because it can give the HPWH more accurate information and help inform how quickly it needs to reheat the water.
• Variable speed compressor: We’ve seen variable speed compressors now in a couple products, but most HPWHs don’t currently have one. Variable speed compressors can adjust how quickly they heat the water, running more efficiently during low-demand periods, and running faster and increasing hot water output when needed.
• Integrated mixing valve: The Cala HPWH is one of the first 240-volt HPWHs that comes with an integrated mixing valve included standard (most 120-volt plug-in HPWHs come with them). This allows the water heater to store water at a higher temperature and then mix in cold water as it goes to the tap. Storing water hotter allows HPWHs to store energy (like a battery) for times when electricity is expensive. It also allows the water heater to accommodate more use (like back to back to back showers).

These four elements work together to allow the system to coordinate when, how fast, and what temperature the water is heated to. The controls can also factor in how much solar a home is producing, how much electricity costs at that time, what hours a homeowner wants their water heater to be quiet, and even whether a recirculation pump is being used.

Bringing A New HPWH To Market

Cala is manufacturing its HPWH in Wilmington, MA, building on a long tradition of manufacturing water heaters in the Northeast. If successful, Cala will be one of the few HPWH manufacturers producing the equipment domestically (Bradford White makes theirs in Michigan).

Cala first started shipping to the New England area and has now expanded nationally. Cala is selling direct to contractors and building a network of what they are calling “Cala Pro Contractors” who are trained — and supported by Cala. The product is also available to homeowners who are managing the installation themselves and have their own installer they would like to use.

The list price for the water heater is currently $2,999 on their website, placing it at the higher end of the heat pump water heater market (Consumer Reports states that most HPWHs they test cost below $2,500). Cala believes their product’s intelligent control system sets it apart and that these smarts can help consumers reduce their utility bills further. No more having to turn your water heater up and down like I do on sunny days!

Meanwhile, the company is hyper focused on bringing their water heater to market. They see a huge potential market of 120 million water heaters that need to be converted to heat pumps, with room for lots of players, including innovative startups. They want to help the country realize that every home already has a battery in their water heater tank and that they can and should use it more intelligently.

Check out my in depth conversation with Cala recorded late last year as part of our show Heat Pumps and Cardigans. 

This content is provided for informational and educational purposes only. The Advanced Water Heating Initiative (AWHI) does not receive payment, free products, or other compensation for manufacturer spotlights, interviews, or articles, and does not endorse or recommend specific products or brands. AWHI’s role is to educate the market on developments in heat pump water heater technology in support of informed decision-making and market transformation. Read more about AWHI’s content policy here.