Since diving into the deep end when it comes to energy issues, almost every day sees new fascinating concepts, approaches, and technologies. Fascinating … exciting … even hope inspiring at times. And, as well, as the passion builds, so many of these are truly Energy COOL.
Geothermal heating and cooling has long interested me.
- Seriously energy efficient — perhaps half the energy demand of a top-notch air cooled HVAC system.
- Quieter — no external fan unit buzzing away while dining outside.
- Less space — no external fan means perhaps 40 square feet of land not required.
- Lower maintenance requirements — again, no external system/unit.
- Longer lifecycle — again, primarily to no external unit.
- Operational (and potential lifecycle) savings due to energy and maintenance savings & longer life.
What’s there not to like? Well …
Decades ago, when looking for a home, that brand-new four home development with a share geothermal system truly appealed. Sadly, right by a highway (and thus off the list). Of course, that isn’t the geothermal system’s fault.
A decade ago, when the air conditioner died and deciding to upgrade from a 20 year old heating system, I brought in a top-notch geothermal installer for advice and an estimate. Sigh, due to the need to bring a drilling crew from a hundred miles away and a pretty difficult yard for drilling, drilling alone would have topped $25,000. Truly a great guy who laid it out pretty bluntly along these lines: “Look, you want the system, I can get it done. But I wouldn’t do it myself and I don’t recommend it because of that extra drilling cost.” So, instead, we went with a fossil-fuel system (combo high-end HVAC and a good natural gas system with a controller that shifts which is running based on temperature). The roughly $25k difference in price would likely have taken more than 30 years to ‘pay back’ in savings (assuming zero-cost of money — e.g., financially, that just wasn’t a smart deal).
While my case was extreme, geothermal’s challenge has been like that of other renewables: high upfront cost with (much) lower operating and life-cycle costs (along with other benefit streams that don’t get discussed too much). America, sadly, is very much a 99 cent culture: see that upfront sticker price and discount the longer term and pretty much ignore the other benefit streams. Thus, even though life-cycle analysis would show the benefits, solar and geothermal and energy efficiency (insulation, better lighting, more fuel efficient cars) often fell by the wayside.
With that in mind, the geothermal Energy COOL-ing item that comes out of Google/Alphabet’s ‘Moonshot’ X team and is now its own spin-off firm: Dandelion. With a combination of new technology, cost-efficient financing, and business model, Dandelion is turning the geothermal equation upside down. Rather than requiring the patient and thoughtful ‘investor’ ready to plunk down for a high upfront cost with their eyes on a decades-long return on that investment, Dandelion targets “Zero Down, Savings Today” in upgrading from old, decrepit heating systems to geothermal.
What’s going on here?
It is a combination of technology and business model (both financing and target customers).
As to technology, think back to my drill comment. Traditionally, geothermal systems have relied on large drills that are used for wells and other major systems. Google/Alphabet X developed a smaller system (think back of pick-up truck rather than large towed system) that costs significant less to buy, move around, and operate. Knock that $25k, perhaps, down to $5-$10k and all of sudden my contemplation of a geothermal system would have been far more reasonable (and I might have a far less complicated home heating situation).
As to the business model, Dandelion is more or less leveraging what has happened with the solar industry over the past decade: giving homeowners the option of (in essence) leasing the system (not having to pay upfront) leveraging their financing backing. What Dandelion is offering customers: go with our system, pay nothing upfront, and your bill combination for paying for our system PLUS paying your (relevant) utilities will be lower than your utility costs today. (In the initial market, for an ‘average home’, Dandelion projects nearly $100/month in savings (plus less noise and fewer GHGs) for $0 down.)
Comparing heating costs: financial and environmental (courtesy of Dandelion)
The benefits aren’t only financial, they are also environmental — local (noise pollution) to global (greenhouse gases).
Now, before you go rushing out to call Dandelion, some caveats.
- They are a start-up, working through the kinks of getting the business going.
- This means a limited territorial coverage for now: the Hudson Valley in New York.
- The initial focus is where that ROI is most powerful.
- Tackling conversion of propane and fuel oil heating systems to electric-based geothermal.
The two, by the way, are a combination. I asked Dandelion ‘why New York’:
We started by looking state by state at homeowners on oil & propane, since these are the homeowner that would save the most money (see two graphs below). New York state has the most homeowners on oil and propane.
Our drill can go through almost anything, so the ground would have been fine anywhere in state, but we chose the Hudson Valley & Capitol Regions because we found a great installation partner, Aztech Geothermal up here. We also were going to do Astor Courts, a mansion owned by Erich Schmidt, Chairman of Google (also where Chelsea Clinton got married), so we were going to have the equipment in Rhinebeck anyway for that.
Okay, really can’t argue with that logic as to ‘why there’.
“Business model” isn’t just looking to competition (propane/fuel oil) and the financing model. As explained to me,
Geothermal heating and cooling has always been the most efficient way to heat and cool a home, but the industry has not figure out how to standardize the process and therefore has not figured out how to scale the process yet.
Failure to scale means higher costs per installation — in no small part due to higher soft-costs because of house calls like mine which lead to no sale.
Dandelion says no to about half the people we speak to that want geothermal because we’re currently only offering a system for homes with forced air/duct work. However, by limiting ourselves to homes with forced air, having a concerted marketing effort, having a standardized installation process, and not taking a big cut for our services, we can say yes and install more quickly than any geothermal heat pump company has been able to do to date.
Energy COOL-ing Dandelion geothermal has moved from Alphabet X into the commercial market. Here is a just posted testimonial from Dandelion’s first retail customer.
Dandelion’s First Customers – Becky and Bob from Katie Ullmann on Vimeo.
NOTE: Geothermal HVAC has a number of ‘hidden’ benefits that aren’t typically included in the investment decision. One of the key reasons for those hidden benefits is that a geothermal system doesn’t require an outside unit. This has some major benefit streams:
- Land value: Think the 20 square feet or so reserved for a heat pump in a typical home. That yard area is now available for flowers, bushes, or …
- Essentially eliminates outdoor noise: Think being outside on a hot summer afternoon in a residential neighborhood and the hum from all the air conditioners — doesn’t happen with geothermal.
- Reduced maintenance costs as there is essentially nothing exposed to the weather. This is a critical element as to why — all things being equal — a geothermal system will last roughly twice as long as a traditional HVAC system.
Geothermal has other benefit streams against other building heating/cooling options. These include reduced air pollution (both local (including in the home) and global), reduced fire risks, and reduced internal noise.