A NY-based geothermal startup has raised a round of $4.5 MM funding, to help homeowners save on the money spent to heat or cool their homes.

The company originally conceived at X, Alphabet’s innovation lab, is now independently offering geothermal heating and cooling systems to homeowners. It has reached a valuation of $6 million.

Its rationale is simple: Buildings in the U.S. account for 39 percent of all carbon emissions, mostly from the combustion of fossil fuels for heating and cooling. This also leads to unpredictable costs for the homeowners. The alternative, in the form of geothermal energy which uses the energy in the ground, has been long available but has lacked practical use.

It’s a reliable renewable form of energy where the sun heats the ground, but its adoption, however, has been difficult. The application of geothermal energy has been stymied by the cost and complexity of its systems.

But Dandelion has brought in a groundbreaking solution, literally.

First, how Dandelion works. CEO Kathy Hannun explains:

The ground stays at about 50 degrees Fahrenheit year round. In the wintertime, water circulating through U-shaped plastic pipes installed in your yard absorbs heat from the earth, and then a geothermal heat pump inside of your home turns it into warm air. In the summertime, the pump draws the warm air out of your home and the so-called “ground loops” disperse the heat into the earth.

PC: Dandelion

If a place is known for extreme weather – cold winters and hot summers – geothermal systems could prove very useful. While this technology is not new, lack of innovation, and awareness, has deterred consumers. The adoption of geothermal energy has also been prohibitively expensive, compelling people to rely on other expensive solutions such as fuel, propane, or electric heating.

In New York, it is estimated that a family spends between $3,000 to $4000 each winter buying oil for heating and another $300 to $500 in the summer on air conditioning.

So what has Dandelion changed?

Apart from its vision to provide earth-powered heating to every home. It brings in a, quite literally, a new drill. The machinery used to install ground loops – underground pipes containing water that transfer heat from the ground to a home – has been the same as the one used to say, bore a well. Hannun says, “These machines are unnecessarily large and slow for installing a system that needs only a few 4” diameter holes at depths of a few hundred feet (as opposed to the several hundreds of feet for wells).”

Dandelion, therefore, after trying to efficiently dig the earth through a jackhammer or a high power water jet, designed a faster, slender drill which reduces the “time, mess and hassle of installing the pipes”. This new drill, according to the startup, takes up less space, produces less waste, and helps install the ground loops in one day. It has naturally helped expedite the process and brought in a foreseeable change that helps save costs.

A Dandelion installation includes a heat pump, underground pipes, a buffer tank for generating geothermal hot water, a Nest Learning Thermostat, and a smart monitoring system.

PC: Dandelion

What are the expenses?

If you’re using Geothermal energy, it means that you’re not dependent on traditional energy which adds to carbon footprint. By an estimate, you would directly be helping reduce the 21.4 percent that fossil fuels used for heating spaces and oil contribute to greenhouse gas emissions in New York state.

And therefore, you might be eligible for a tax credit. The U.S. government’s tax credit “allows most homeowners to get back 30 percent of the cost of their home geothermal installation”. This means that the Dandelion Air system will cost you $19,423 but you could also take a 20-year loan and pay $135 monthly. The startup claims that a person choosing to pay up-front can save “60 percent on their heating and cooling costs per year” and 20 percent otherwise.

However, Dandelion is currently only offering its service and shaping home economics in New York and the Northeast, but has plans for expansion: Last month, it partnered with American Heating and Cooling, a heating, ventilation and air-conditioning provider to increase its installations.

A Journey To The Center of the Earth

While the company negotiated bulk rates with a contractors to do 20 installs in upstate New York, its big breakthrough came in Rhinebeck, New York. In the December of 2017, the village board of Rhinebeck gave Dandelion right-of-way – allowing the startup to “install and own ground loops on village property alongside the street in front of homes.” While the company hasn’t disclosed the pricing for Rhinebeck, it said in its press release that this will allow the ground loops to be installed at “no upfront cost to homeowners”.

Dandelion CEO Kathy Hannun and CTO James Quazi (PC: Dandelion)

Dandelion may be bringing affordable, renewable energy to Rhinebeck which doesn’t have access to natural gas. But the company is not without its competitors. In the presence of low natural gas costs, low electricity costs in some regions, a wide adoption of solar energy, and home-to-home reach of other companies like Vivint that could start providing geothermal options, the consumer has various options. Dandelion’s pricing is also similar to how solar energy have been marketed – solar panels sold cheaply and money made through monthly bills as utility costs were lower.

But if more communities offer Geothermal right of way, there could come a point where the company lays down the infrastructure like piped gas and brings its costs down even further. The startup also claims that its pumps or pipes don’t involve high maintenance costs and that the system’s complexity is in the software. With an aim to evolve, Dandelion acquired Geo-Connections in March, whose three main LoopLink products contain software for installers to properly configure ground loops, the underground portion of a geothermal installation.

Dandelion is not a household name yet. It’s slowly building its list of customers. Like Becky Meier and Bob Connors near Albany, who are the founders of a  nonprofit organization fighting fossil fuel pipelines, and could only now afford to ditch fuel. Do all consumers have to be ideologically driven? Definitely not, but it helps. Like the family of Matthew VanDerlofske – who drive electric cars, have 56 solar panels and now geothermal energy through Dandelion.