♨️ Drilling into Geothermal Heating & Cooling #024
Mother Earth keeping us cozy this winter with her warmth
TLDR: By tapping into the natural heat of the earth, we can drill holes and install loops to heat and cool our buildings. I interview Joselyn Lai, Co-founder and CEO of Bedrock Energy and Kathy Hannun, Founder and President of Dandelion Energy to learn more about geothermal heating & cooling.
When I initially decided to research geothermal, all I knew was that the Earth is hot underneath. I quickly learned that geothermal startups, while they all leverage subsurface heat as the primary resource, vary significantly in what they do. There’re many ways to slice and dice it, and I view the landscape in two distinct categories: heating & cooling and power generation. This newsletter will focus on the former, using geothermal energy directly to heat and cool buildings. The next issue will cover how geothermal energy can be used to generate low-emissions, renewable electricity.
Geothermal Basics
Just underneath the Earth’s surface, the ground temperature remains a constant 55-75°F (7-21°C) throughout the year. This is ideal for geothermal heating and cooling. During the summer, hot air gets moved into the cooler ground which results in air conditioning. During the winter, heat from the warmer ground gets moved into your home.
Even with just understanding the basics, there’s already a distinction between geothermal for heating & cooling and geothermal for power generation. For heating & cooling use cases (AKA shallow geothermal), you don’t have to drill as deep as for power generation. Drilling deeper comes with more access to heat, but is also more expensive and complex.
For geothermal heating & cooling, we’re mostly referring to drill depths ranging from a couple hundred feet up to 2,000 feet which maps to shallow and deep geothermal probes in this diagram:
What goes into a geothermal system?
The presence of this stable 45-75°F range is great, but it’s just a raw resource that needs to be harnessed. Finding the heat is not the challenge; getting that heat into buildings is. This is one of the key distinctions between geothermal for heating & cooling vs. power generation. So, how do you actually move the underground heat around?
A geothermal system consists of a few physical components: ground loops, a geothermal heat pump, and often ductwork. Ground loops are plastic pipes that get placed underground for thermally conductive liquid to pass through and facilitate heat transfer. “Thermally conductive liquid” is just fancy talk for typically water mixed with some antifreeze. The geothermal heat pump is the device that replaces the furnace and air conditioner. Lastly, ductwork is the series of passageways inside the building that delivers the heated or cooled air to each room.
Beyond physical components, companies like Dandelion and Bedrock also provide a series of services that enable a safe, functional, and complete installation:
Design: A combination of remote software-enabled simulations and in-person consultations to determine the system: drill depth, borehole location, number of loops, etc.
Permitting: Similar to installing rooftop solar, setting up geothermal heating & cooling requires permission from the local municipality.
Financing: Geothermal systems are expensive upfront investments. A combination of tax credits, other incentives, and pay-over-time plans lower the upfront cost to purchase a geothermal system.
Drilling: This may be the most important step from an innovation perspective. Geothermal heating & cooling has actually existed for a while, but has never taken off until now. When you dig in (pun intended), the primary reason has been cost, which largely comes from drilling and all the associated dependencies like designing the right system upfront to avoid costly mistakes. Thanks largely to the oil & gas industry, drilling has gone through decades of innovation. However, drilling still needs to be re-engineered for geothermal, which still has to be proven out. With the IRA and other incentives, the math is finally starting to make more sense for geothermal.
Installation: Once the borehole is created, a crew of skilled workers must install the ground loops, replace the furnace and AC with the geothermal heat pump, and connect everything. Even geothermal heating & cooling is a sector of climate that is impacted by the skilled labor shortage.
Monitoring & Alerting: Sensors embedded in the geothermal system measure the real-time performance of the system and can detect any irregularities or anomalies.
Why does this matter?
Heating and cooling buildings is responsible for at least 10% of global emissions. Breaking it down further, space heating, air conditioning, and water heating make up 70% of home emissions. Meanwhile, the vast majority of HVAC systems are still burning natural gas, fuel oil, and propane. Switching to a geothermal heat pump system can result in upwards of 75% emissions reduction, but in the US, geothermal makes up less than 1% of HVAC. It’s also worth noting that according to Dandelion, even switching from an air source heat pump to a geothermal heat pump can result in emissions reductions of nearly 50%.
Historically, geothermal projects have faced significant challenges across three dimensions: cost, space, and time. The high upfront cost effectively priced out most real estate types, leaving only special buildings like military bases, embassies, and museums. Even then, payback periods were upwards of 20-30 years. In the past, more primitive drilling techniques led to both shallower drilling and laying out group loops horizontally (as large as a football field!). This required a ton of space which most real estate owners don’t have. Lastly, in the past, the high cost of drilling resulted in shallower depths and horizontal loops which take a lot of time to build. Developers were spending up to a year drilling holes which further exacerbated project costs from a labor perspective.
While the hurdles have been around for decades, there are signs that we’re at a turning point. In Sweden, roughly 20% of homes have geothermal heat pumps installed. In fact, in one case, a Swedish homeowner was able to reduce his heating emissions by 95% while also cutting down his heating bill by 80%! Although some other countries are clearly ahead of the US, it’s not due to geographical or geological reasons. Policy and culture have played a larger role in shaping the adoption of geothermal heat pumps (since we’re only doing relatively shallow drilling). With enough customer awareness and political momentum, geothermal in the US has the potential to reach similar levels of adoption as Sweden.
If the 2010s were solar’s time to shine, then the 2020s could be the decade of geothermal. If you’re also an optimist, then we are at the very beginning of geothermal’s exponential curve.
Introducing Joselyn and Kathy
While Bedrock and Dandelion are two distinct companies tackling different customer segments each in their own unique way, I couldn’t help but notice some similarities. Both operate at the intersection of technology and logistics. Both use a combination of software and hardware. It’s not just about design software, IoT, and financing. Manual, physical processes like trenching, managing crew operations, ductwork, and ensuring the electrical panel is capable are equally important. Drilling — specifically, vertical group loop systems — came up multiple times as the crux of the entire operation. The key themes below reflect this attitude of utilizing new tools to bring old energy (as old as the Earth) to the masses. There’s a balance in galvanizing adoption with modern technology, but also realizing that software alone is not going to be the silver bullet.
Together, we’ll cover:
The current state of the geothermal heating & cooling industry
The critical role of drilling
Finding customers vs. finding sites to drill
Comparing geothermal to the solar industry
The role of subsurface energy modeling
The skilled labor shortage in geothermal
Balancing new home development vs. retrofitting existing homes
and more! Let’s dive in👇
What is the Goldilocks-sized (not too small, not too big) building for Bedrock?
Joselyn from Bedrock: We wouldn't do a single family home because they might only need one borehole. Some single family homes only need 400 feet of bore, but for us, that's not even a full borehole. So it isn't great economics for us to mobilize our technology and team to do a system that isn't even leveraging half of a Bedrock bore. Since our bores can provide somewhere between four and six tons of heating and cooling load, if a building only needs two or three tons, it's just not really a fit.
On the larger side, once buildings are really large, like massive campuses of millions of square feet, we can certainly drill for that geothermal system, but those kinds of campuses are big engineering feats. Usually there's some kind of district energy system. A lot of these university campuses that do geothermal are actually pairing the geothermal borefield with a broader district energy or combined heat and power system. There's a lot going on that's beyond our specialization.
Customer acquisition vs. site selection
Matt: Compared to geothermal for power generation, it seems like the site selection process may be fundamentally different and you might instead prioritize customer acquisition and try to reach those who would save the most or have the most pressure from policy to decarbonize.
Joselyn from Bedrock: Exactly.
Matt: Is it solely looking at the customer or are there a series of natural world data that you're also using to prioritize?
Joselyn from Bedrock: One big thing is just the climate. The hotter the temperature or the colder the temperature, the more money you save. And the more money you save, the more likely the economics look good for doing geo[thermal] instead of the conventional gas option. If you have high temperatures, then you're doing a lot of air conditioning. If you're doing a lot of air conditioning, it is more likely that the grid in your area is going to be strained in the summer. As a result, you might have expensive demand charges for using electricity during peak summer days.
There are places where you can save a lot of money by doubling the energy efficiency of your air conditioning because ground source heat pumps are so efficient no matter how hot it gets. And then if it's very cold, you may be using a lot of natural gas or even fuel oil for heating, and in those situations you also save a lot of money from getting the 5x cost energy efficiency by switching to geothermal heating.
What have you learned about customer demand?
Joselyn from Bedrock: Geothermal is definitely a sector that needs more education. I think one of the benefits of working with commercial & industrial real estate is that these are big portfolios. Once somebody is interested in geothermal, their brain is like “How do I decarbonize my whole portfolio?” However, to even get over the hump of the initial projects, folks are always just thinking “Well, what's the payback period?” Even if it is overall a strong IRR, people generally do want to see a 3-5 year payback period, which is pretty aggressive. In our country, natural gas is still relatively cheap compared to how expensive it is in most of the rest of the world.
For us to prove that with Bedrock's technologies that we can get to a 3-5 year payback period, there's a good amount of education to get over the hump. Even if people are willing to handle a 3-5 year payback period, the question is, where are they going to get the capital? The industry is not doing great. WeWork just went bankrupt. There are definitely some headwinds in this sector. People may not be willing to take on debt even if there is a 3-5 year payback. They might say “I just don't have the capital right now to make investments.” As a result, it's important for the energy transition sector to mature and start providing more access to capital that can enable folks to overcome needing to provide their own capital to invest in these types of installations.
What’s the current state of Dandelion — how things are going and what are you all focused on right now?
Kathy from Dandelion: Where to begin? When I first launched the company, we had to prove customers would even want this product because not a lot of people had heard of geothermal as a way to heat and cool their home. So in the first couple of years, we set out to prove we could sell it and we absolutely could. We had a problem all the time of overselling what we could install. So then, for the next two years of the company the major challenge was growing our installation capacity quickly enough. We had to do some pretty hard things to grow quickly enough including totally vertically integrating which includes drilling, because there just weren't enough drillers in the market to handle all the customers that wanted geothermal in our markets.
Now, in this phase of the company that we're in, I would say there are two focuses that are occupying most of our time. One is, now that we've shown that we can sell and we've shown that we can grow quickly, we're trying to show that we can grow profitably. The second thing is becoming more and more efficient at what we do. Which is a good place to be in. That's basically our reason for existing — to show that geothermal is a scalable product that people want. They definitely want it, we've shown we can scale it, and the last part is demonstrating that it's an attractive and sustainable business.
The other thing is in the past, we've focused on retrofit. So if you're a homeowner and you have an oil furnace, we'll replace it with a geothermal heat pump. Now, we’re also taking on new construction work by working with developers to install hundreds of geothermal systems in new homes. That way, home builders are not just installing furnaces that need to be replaced later. That business is really taking off. We just started it in 2023. This effort is very new, but it's already grown to become a significant part of our business.
Does Dandelion’s vertically-integrated model carry over into the future? Or do you see a world where you can actually scale faster by working with contractors?
Kathy from Dandelion: I think the latter. To predict what will happen in the residential geothermal market, I look to the [residential] solar industry. For rooftop solar at the beginning, the companies that were the most successful were vertically integrated. I think that’s because when you have a new industry, there are a lot of things that are missing. There isn’t a trained workforce and there's a lot of complexity to manage. There aren’t products and services that are purpose built to serve the industry. For solar today, there's design software that calculates where to put the panels based on sunlight, rooftop angle, and tree shadowing. None of that existed at the beginning. You also have racks on the roof that make it super simple to install solar panels. Over the course of the lifetime of that industry, so much has come into existence.
Now, it's possible for a local company to become a solar company. They can buy all the products that make it simple for them to do a good job and it's not ridiculously expensive. The [solar] industry started out vertically integrated and now it's become quite distributed. I think the same thing will happen with geothermal. We had to vertically integrate even though we didn't want to at the beginning. My vision was not to be a vertically integrated company, but we were forced into it because there was too much complexity with things like quality control and cost. We just couldn't achieve what you needed to using a subcontracted model given the state of the industry at the time. But if we're successful in continuing to create the products that make installations simpler and cheaper, we will accomplish our goal of making it cheap and simple enough for local contractors to put in geothermal. That's how we'll achieve our mission of scaling the product quickly enough to replace fossil fueled heating systems with heat pumps on a scale that matters nationally.
Sticking with the solar analogy, you mentioned satellite imagery, tree shadowing, rooftop angle. I read that Dandelion is able to reduce costs by 30%. I’m curious what is the geothermal version of Aurora when it comes to inputs for system design?
Kathy from Dandelion: In terms of reducing cost for geothermal, I wish that there was more to do with software alone. There are some, but a lot of the major wins that we've had have been through things like the type of drilling equipment we use, which has really lowered the cost. Even something as simple as the shape of the ground loops impacts whether you need one or two ground loops for an average house and that is a big difference in cost and time. Drilling or installing projects with fewer people also makes a big difference. Doing more installs and increasing throughput has a huge impact on cost.
About 20% of homes in Sweden today use geothermal heat pumps for heating, and most new homes there are built with geothermal installed. We wanted to figure out what the Swedes were doing that had enabled them to scale this technology, so in the summer of 2021 a few of the leaders of our drilling initiatives took a trip to Sweden. We saw they were using compact, agile and inexpensive Comacchio drilling rigs to drill holes for ground loops. The drills themselves were just a small part of the puzzle though.
One of the lessons we learned early on is that when drilling for geothermal ground loops, it's all about logistics. For example, even if you can drill quickly into the ground, if it takes a lot of people, the labor will be too expensive. If it's time consuming to move the rig from one house to another, it will be too expensive. If the rig is too fancy and can only be operated by very skilled technicians, the labor will be too expensive. What the Swedes figured out is a system of equipment - including the rig - that was simple to train on and operate, inexpensive, and efficient to take from one house to another.
These Comacchio rigs already existed, so we did not need to design them. What we did need to do is translate some of the Swedish equipment and logistics to their American equivalents. There are enough differences between Sweden and the US that it wasn't possible to do exactly what they were doing, but it provided an extremely helpful baseline for us to work off of.
We’ve gotten pretty far using Sweden as a baseline. Their drilling equipment is smaller, cheaper, and easier to use. Everything is lighter so you don't need as many people and you don't need as much support equipment. It's actually a lot safer. They have a system of capturing the dirt and rock that comes out of the hole very easily in a dumpster so it's not going all over the yard, which was a big problem in the past. They also have a whole system of trucks that transport the rigs from house to house.
Then with the inside of the house, most heat pumps in the U.S. today are built for cooling in new homes. Since the Southeast has traditionally been the leading market for heat pumps, a lot of geothermal heat pumps are cooling optimized. They also do heating, but in our use case, because we primarily serve the Northeast and other cold places, there’s a benefit in optimizing the equipment for heating and then having it also do cooling. I can't go into the details yet, but we have been doing quite a bit of work on the technology side for the inside of the house to create equipment that's more appropriate for cold climate retrofit because the existing equipment just really isn't built for that. We are working on solving problems like the required main panel upgrades, and the undersized ductwork that’s all over the place in retrofits.
Do you think geothermal will experience the same exponential decrease in cost as solar?
Joselyn from Bedrock: I think there needs to be a cost compression in the asset itself. What came down the most in solar was the solar photovoltaics. The panels just got cheaper to make. So as heat pumps become more widespread, costs will come down with scale.
The one difference is that in geothermal, there's a big part of the cost that's not the asset. It's not the equipment; it's actually the drilling. That's what we focus on at Bedrock. At the end of the day, installing geothermal will always be some level of a construction project. Drilling holes, putting loops down, routing it back up, and connecting to the building will always be there. Our goal at Bedrock is to push that cost down by 50% and then eventually 60-70%. That is our goal so that ultimately we can see geothermal heating and cooling have a similar cost curve to what we've seen in solar.
Kathy from Dandelion: I do think geothermal will beat expert predictions on how quickly it will scale. I also think that new homes will play an important role; if you have a brownfield construction site, it's actually a lot less expensive to put in geothermal heating and cooling systems. For example, one of our projects is in Colorado, and the state government recently made developers pay for the cost of extending a natural gas line to the new home development. It used to be that this cost was socialized and paid for by other utility members. Now that developers have to pay for it, geothermal is actually less expensive than natural gas. This represents an incredible turning point.
Geothermal is already the lowest cost option in a few states. We still have work to do in other states, but once we get there and as developers become more familiar with geothermal as an option, it’ll feel lower risk and then it’ll take off. Once it's the lowest cost option and it doesn't feel risky, there's no reason a developer will not do it. Everyone will do it. I'm biased, as you know, but geothermal is the best solution. It’s the most climate friendly and it's the least expensive to run. If it's also the least expensive to install upfront, I just don't know why you wouldn't go with it. There's no reason not to do it.
With retrofit, we're seeing a lot more interest every year, with people just becoming more familiar that it's even an option. When I first started Dandelion in 2017, a lot of our marketing was just education and awareness building. Now we don't have to do nearly as much of that. A lot of people already know what it is or they know somebody who has it. We get a lot of referral customers. So it's good. There's been a fast change already in the industry.
What’s the secret sauce with your geothermal drilling?
Joselyn from Bedrock: The oil & gas industry has done some phenomenal technology engineering , but also drilling engineering, which is basically the engineering of handling the complexities of the geological earth.
Oil and gas has put so many billions of dollars into the tools, equipment, and the know-how of additives, chemicals, and the crazy conditions underground. That whole spectrum of technology and field engineering has been optimized for the extraction of hydrocarbons over the past decades. However, if you reengineer them for geothermal, there are some fundamental differences. Geothermal has shallower, narrower, simpler boreholes. We're not trying to take anything out of the borehole — we actually want to keep them stable so we can put a plastic pipe in, fill it back up, and keep it stable to enable thermal energy transfer.
The conditions are extremely different from the hydrocarbon space, but we’re essentially looking for the same things: higher rate of penetration, lower nonproductive time while drilling, better stability, and lower costs of completing the bore.
Our technology is rebuilding these tools that come from oil and gas, but doing so for the purposes of geothermal specifications and outcomes. Specifically for us, that’s low temperature geothermal heating and cooling. There's a huge element of simply building these tools at a price point suitable for geothermal heating and cooling.
These tools exist in the hydrocarbon space, but in oil and gas they're making $50,000-60,000 day rate for a tool this big. So why would you ever reengineer that tool to be smaller and to be used in the United States in urban construction when the opportunity costs of doing that is $50,000 a day out in Saudi Arabia? There's a bit of a chasm where the technology engineering is not making its way over. So we are focused on building all the same equipment, the same tools, but making it that much smaller, lighter, and cost effective to build, use, and maintain.
Since you mentioned a lot of business is coming from referrals, would it ever make sense to combine installations? Maybe I tell my next door neighbor and we commit together, but also could you drill one big set of loops that we’d share that or is that not really practical?
Kathy from Dandelion: I would say it's not really practical, but it's a dream that many people have. A geothermal heat pump install is a pretty big project. It'd be like trying to convince a bunch of neighbors to buy a car at the same time to all share a discount. It's a large purchase and the task of coordinating a bunch of people to make that decision together is not practical in most cases. Well, at least I haven't figured out a way to do that. The cost of sales, I think, would far exceed the savings in operational efficiency that you would get. I don't think that combining the loops would actually save you anything because you'd have to just do more loops and have longer trenches.
Even in the case you did manage to sell a bunch of homes at once, they still likely all be different from each other and therefore require highly individualized attention. The nice thing about new construction is not only do you get to do them all at once (which is very efficient), but they're all predictable because they're all the same. So there's a simplicity and a predictability that’s absent in residential retrofit.
Matt: That makes sense on why to also have this new construction line of business. Because I assume you can do multiple homes in one pass.
Kathy from Dandelion: We absolutely can. The homes are so much simpler because when you know you're going to put a heat pump in, you can design the home to accommodate the heat pump. You can make sure it has enough electrical capacity and the ductwork is large enough and the space to put the pump in is sized correctly. You simply design the home to have a heat pump. We're not vertically integrated for our new construction business because it's simple enough. This is very different from the retrofit business, where many homes were not designed for heat pumps, so you might need to upgrade the electrical or upsize the ductwork. There’s also all the complexities and differences inherent in all individual homes. This isn’t limited to geothermal heat pumps. All companies installing heat pumps in old homes face these problems.t's just not easy to retrofit a home for a heat pump, and generally the older the home, the more difficult it is.
Skilled Labor: What has the process been like with building a talented, capable workforce? Is there a similar bottleneck with drillers and ground loop installers like there is with electricians and HVAC technicians?
Kathy from Dandelion: There are shortages of both electricians and HVAC techs and drilling / ground loop installers. The shortage of drilling installers is far worse because there is no scaled geothermal heat pump industry within the US today. This was a significant challenge for Dandelion in our early days, because the demand for geothermal heat pumps quickly exceeded the available labor pool to install ground loops. To meet this challenge, Dandelion took a few actions:
We acquired a CT-based environmental drilling company and retrained those talented drillers to install geothermal ground loops;
We brought leaders of one of the top geothermal ground loop installation companies in Sweden over to the US to train our team members in this type of drilling;
With these experts to lean on, we've built a pipeline where we hire people with no geothermal ground loop installation experience and train them to drill and install loops.
There are enough electricians and HVAC technicians in the market today that we've been able to hire externally in addition to training, but state-level licensing requirements add a layer of challenge to what is already a tight labor market.
What is subsurface energy modeling and how is it used?
Joselyn from Bedrock: The inputs to our subsurface model are all this data that we collect while we drill, and we understand the subsurface. This is really important because every bit of earth is actually a little bit different. Two boreholes 50 feet away from each other might have groundwater start at different depths. Those different rock, soil, and hydrological characteristics inform the thermal conductivity or thermal performance of this whole borefield.
You can think of a borefield as a battery. It's a thermal battery that you are drilling into the Earth and you want to know how it will perform. But the Earth is not consistent. With batteries, you know exactly how it operates because it's a manufactured lithium ion battery. But with the Earth, every bore is different and the conditions change a little bit. We are reading those soil and rock characteristics and then modeling how that borefield will perform over many decades. Then using those insights, we may go a little bit deeper on this bore, space this bore a little bit further out, add another bore, or you might be able to save money by removing a bore. We may realize that you don't need that 120th bore — you could actually make do with 119, and then save $20,000 from not adding that final one.
These are the kinds of optimizations that we can do because of being able to read the earth and provide exactly the optimal borefield (the optimal thermal battery) that this building needs.
What’s the purpose of monitoring performance over time?
Joselyn from Bedrock: The pre-drilling design can only tell you so much. As you drill, you get more data and you're able to optimize that. There are risks in the existing industry with thermal creep or some people call it thermal drawdown or thermal buildup.
Thermal drawdown is when you're in a cold place and you start taking heat out of the ground faster than the earth can replenish it. Basically, the borefield is not big enough to serve the heating needs of a building. Thermal buildup is the opposite. It’s when you're in a cooling dominant place and the borefield is not big enough to support all of the heat you're putting into the ground. In either of these conditions, thermal degradation may result in the borefield not lasting the 50-100 years that it's supposed to last. It might only last 10-15 years.
Thermal drawdown or buildup has happened often enough in the industry over the past few decades that it is still something that comes up in a lot of conversations. An engineering firm or a real estate owner will say “I've heard the Department of Energy says geothermal is amazing, but I've heard whispers that it could degrade over time.” Because of that, it's actually quite important that as we drill, we continue to monitor the borefield to ensure the borefield is designed optimally. By understanding the thermal characteristics of the subsurface, we can vary the way the system is pumped by varying the way water flows through it and do heat exchange such that you can also optimize the longevity of the system.
Technology: I know you said that it's mostly a logistics problem, but I am curious with the current geothermal systems, just how "smart" are they today and how much "smarter" could they become?
Kathy from Dandelion: Don't get me wrong, there is a lot of technology to be created here; I made the point about logistics because I think it can be overlooked by those looking to innovate in the space (me included, those were hard lessons learned) -logistics is absolutely vital to success. Heat pumps in the market today have IoT, monitoring and alerting, although these features aren't always great - I'm sure they will improve over time. That said, I don't think the IoT and monitoring is where the biggest opportunity for technology innovation exists in heat pumps. The biggest barriers to retrofitting homes with heat pumps are that most homes in the US weren't built for heat pumps, they were built for furnaces and boilers. Because of this, houses tend to have many features that are incompatible with heat pumps, including: undersized electrical systems, radiators that require water that's hotter than heat pumps can efficiently produce, ductwork that's undersized for heat pumps, not enough insulation, making it difficult for heat pumps to meet the heat load requirements. These issues require hardware innovation, and this is the heat pump innovation that needs to happen to make heat pumps more effective and less expensive for existing homes.
Regarding new construction vs. existing homes, how do you think about balancing proving to investors that you can grow profitably vs. trying to save the planet?
Kathy from Dandelion: One of the best things about the fact that our company makes money whenever we replace a furnace or a boiler with a geothermal heat pump is that our interests are 100% aligned to the environment's interests.
Even as we take on new construction, we're not lessening our commitment to retrofit. In fact, 90% of our employees are still focused on retrofit. So I don't want to overstate our shift to new construction. It's not a shift in focus. In the past, we were exclusively retrofit and now we're also taking on new builds. We have to fix both. I think it's a travesty that new homes continue to be built with fossil fuel systems when we know the systems are just going to have to be replaced. The sooner we can just stop adding fossil fueled systems to the mix and start putting heat pumps into new homes, the better.
If we can continue to show that it's cost effective, convenient, and low risk for builders to do that today to make heat pumps the default, we will be servicing the environment. At the same time I totally agree with you that we have millions and millions of buildings in the United States that need to be retrofitted, and in many ways it's a harder problem, but one that needs to be addressed, and we've been focused on it for the past — wow, I guess — almost seven years. By showing we can sell these systems, grow our company, and revenue quickly, and make profit doing this, we can make a compelling case to investors, who should be eager to invest more in this project and that money will be used to accelerate the project of replacing furnaces and boilers with heat pumps. So it does feel to me that we're lucky that our interests as a company and our interests with respect to investors are actually very aligned to our environmental mission.
Matt: Yeah, awesome. Sounds like one massive flywheel where the learnings from more homes being built with Dandelion systems will actually help the retrofit business. So it's all one virtuous cycle.
Kathy from Dandelion: I think so. As we normalize the idea of geothermal heat pumps, and it becomes more mainstream, it won’t feel as much like an early adopter product. It's the same as EVs and with solar.
Conclusion
A big thank you to Joselyn and Kathy for teaching me about geothermal heating and cooling! In the next piece, I’ll cover the other main way geothermal is used — to generate electricity.
To get involved:
For homeowners: Visit dandelionenergy.com and sign up to learn more about getting geothermal for your home!
Bedrock is hiring for product and engineering roles -- visit bedrockenergy.com/careers for more info.
Reach out to info@bedrockenergy.com if you are interested in decarbonizing your commercial & industrial property's heating and cooling with clean, efficient geothermal energy!