Photo illustration: Gabriella Turrisi/Axios. Photo: Courtesy of Dandelion Energy
"In 30 years no one is going to have a fossil fuel burning engine in their basement," says Dan Yates, the new CEO of geothermal heat pump startup Dandelion Energy, in his first interview after taking the helm.
Why it matters: Yates is a serial climate tech entrepreneur and investor who previously co-founded and led energy software startup Opower to an IPO, followed by a $532 million acquisition by Oracle.
- Yates took over as Dandelion's CEO a couple of months ago but has been involved with the residential geothermal heat pump startup, which was spun out of Google X in 2017, for years as an early investor and executive.
- He's now focused on streamlining Dandelion's business, launching new heat pump models next year, and expanding into new construction.
- Dandelion has raised $134.5 million to date from investors like the corporate venture arm of Lennar, the energy transition investing platform of NGP (NGP ETP), Breakthrough Energy Ventures, NEA and Google Ventures.
This interview has been edited for length and clarity.
On the geothermal heat pump market:
- "The reason we have carbon monoxide sensors in our homes and worry about our babies dying in their sleep is because we're burning something in the basement. And I think that's going to go away."
How it works:
- "We typically drill a 500 foot deep hole, and then we bury a loop in that hole and that is how we exchange heat with the earth. We dig a trench to your house, and then we put in heat pumps, just like a normal air conditioner, except those heat pumps now communicate with that loop."
- "We started as a retrofit company, because it was the best place to get into the business. There are 10 million homes in the US with heating oil or propane systems. It's a hugely costly solution. So we are just a slam dunk for those customers."
Future growth:
- "We build our own heat pump, and we have a really groundbreaking new set of models coming out early next year. It's going to be the most efficient geothermal heat pump in the country and super low cost to install."
- "The most obvious time to put in a geothermal system is when you're building a house, you don't have to go back and redo stuff. That wasn't the right place for us to start as a company, but that has become a really surprisingly fast growing part of our business."
- "We have three thriving warehouses in the Northeast, and we're going to drive a lot of profit out of those, and then we're going to continue to add them. . . .Likely expansion candidates for us will be neighboring states."
On the IRA:
- "The broad brushstroke is the IRA rocked."
- "We had a lot of uncertainty around the 30% tax credit in the previous five years of Dandelions existence. And then boom, now it's pegged for a decade at this 30% level. Total certainty for the company."
- "On top of that, one of the things that we're looking at is if a third party can own the outside of the system, then you can match the interests with developers and new homebuyers in the utility bill to look exactly like a conventional natural gas system."
- "That is a great new financial innovation that we're working to bring to market."
