What lies beneath? Efficient heating and cooling.

Summary:

We kick off the episode with “This Week in Climate News,” with Dina Cappiello of RMI and Darren Hau of Cruise. 

Headlines: 

• Department of Interior Bureau of Ocean Energy Management held its pacific offshore wind lease auction this week
• Tesla semi-truck finally comes out, lacking a few key details
• Olympic Committee has yet to decide who will host the 2030 winter olympics, due to climate change
• New EU law bans imports of products that cause deforestation
• US. Department of Commerce concludes solar manufacturers from Southeast Asia are evading US tariffs
• North Carolina substation shootings indicate that our grid is susceptible to attack

Highlights of our interview segment:

• Kathy Hannun tells how she learned about geothermal heat pumps while researching climate opportunities at Alphabet X. She was intrigued by the promising technology (already successfully implemented in 20% of homes in Sweden).
• How they work: Geothermal heat pumps run a PVC tube 300-500 feet below ground under a house, flowing water through that pipe to exchange heat with the ground underneath (that stays a relatively similar temperature year round, usually around 60 degrees), then using a heat pump to transition the cooler (or hotter) water to pump hot or cold air around the house
• Geothermal heat pumps are the most efficient and cheapest way to heat and cool a house (once installed), but the upfront cost of installation can be pretty hefty (≈$18,000). Kathy points to the enormous cost savings potential + the fact that these systems are used for heating AND cooling, as well as financing and IRA (Inflation Reduction Act) benefits that help ease the burden of installation costs.
• Speaking of the IRA… “It’s hard to overstate how impactful it’s been for us,” says Kathy, which immediately gives customers access to a 30% tax credit for installation.

Transcript:

James Lawler: [00:00:00] Welcome to Climate Now, a podcast that explores and explains the ideas, technologies, and practical on the ground solutions that we need to address the global climate crisis, and achieve a net-zero future. I’m James Lawler, and if you like this episode, leave us a review wherever you get your podcasts. Share it with your friends, or tell us what you think at contact@climatenow.com.

In today’s interview segment, we will learn how we can use the energy from the earth beneath our feet to heat and cool our homes with a company called Dandelion’s President and co-founder Kathy Hannun.

But first, our news segment, This Week in Climate News. Today to talk through the latest in climate news, I’m once again joined by Darren Hau, who is staff manager of charging operations and product strategy at the autonomous vehicle company, Cruise, and by Dina Cappiello, who is managing director of communications and marketing at the climate and energy think-tank and [00:01:00] consultancy, RMI.

Hi Darren. Hi Dina.It’s great to see you guys again.

Darren and Dina: Hi.

James Lawler: All right, so just to get started with This Week in Climate News… we saw a really exciting auction take place in the offshore wind market. Bloomberg reported on two days and 31 rounds of bidding, five companies nabbed leases on areas in the Pacific Ocean for offshore wind development.

What’s particularly striking in this auction, you know, to me, reading about it, was that most of the companies bidding were not US companies. These are European companies primarily that have developed expertise and have joined into joint ventures with US entities to bid on these leases. I don’t know if either, did either of you happen to see that particular piece?

Dina Cappiello: No, I did. And you know, as someone who covered for many years the sale of oil and gas leases, I was thrilled to see renewable energy leases being bought up, even if they were from foreign [00:02:00] companies. To your point, I do. The fact is that this is the new day, especially in California, which has had a legacy of oil contamination and oil spills offshore.

To have kind of a renewable energy offshore is obviously a step in the right direction. And so I think one of the questions will be how long will it be  to get these things up?

Darren Hau: It would be a shame not to mention the release of the Tesla semi over the past week. That’s really big news. Tesla released the semi, I believe, back in 2017 and basically said, “Hey, we’re, we’re making this massive machine.It’s gonna be a much better experience for drivers and cut down a significant amount of emissions from our transportation network.”

For those who aren’t aware, the reason semis are important, or rather, you know, semi tractor trailers are important, it’s because even though they account for, you know, call a 1% of vehicles in the US, they’re driving so many miles that they account for like 18-20% of emissions.So, you know, it is obviously a massive [00:03:00] benefit to be able to electrify these.

For those who are interested in environmental justice, there’s a huge component of that too, because most of our freight infrastructure, our port infrastructure is located in disadvantaged communities, so nevermind the carbon emissions, the particulate matter leads to a lot of negative health consequences.

Tesla shared data saying, “Hey, look, we, we did this 500 mile road trip and you can see every single minute of it.”

James Lawler: It was totally loaded.

Darren Hau: It was fully loaded. Yeah, 82,000 pounds and went from the Bay Area all the way to San Diego on a single charge. That’s definitely impressive. I think there are a couple of keen observers out there who have pointed out that there’s some missing information. Number one, Tesla hasn’t confirmed the actual weight of the semi, so how much of that 82,000 pounds was the truck and how much of it was the cargo? Right? That’s what carriers care about at the end of the days And then the second piece is the price was not published either. So back when [00:04:00] Tesla originally, uh, released it, they were advertising a price of $150k or $180k per truck, depending on how big your battery was.

There’s been very little publicly available. But from sources that I know, Tesla has definitely increased the prices since then. I believe there are some contractual mechanisms to cap how much they can increase it to, and I’ve heard that they have hit that cap.

James Lawler: Fascinating. Dina, any did you wanna jump in?

Dina Cappiello: Absolutely. I was super intrigued, and it could be just because I’m a skier, but the Olympic decision for 2030 where the Olympics will take place in 2030 is being delayed because of climate change considerations. And, the IOC, which is the International Olympic Committee, is now saying, going forward, all winter hosts will have to show an average minimum temperature below 32 Fahrenheit, obviously to make artificial snow, if not real snow over a 10 year period.

And what I think is just so interesting about this, and as a, you know, professional climate change [00:05:00] communications person is the more that the impacts get into other audiences, right? These are people who like sports. The more people are gonna be aware that like something has to be done to address it.

Another really fun point about this story is that this is the Olympics for 2030, and, and that’s the year we’re supposed to have a 50% reduction in greenhouse gas emissions worldwide. If we’re gonna meet 1.5 C come 2050. So, just also just an interesting date.

James Lawler: There’s another story that kind of connects to that same theme that we saw this week from news from the European Parliament, that they’ve reached an agreement on a new law in the EU that would ban the imports of products that cause deforestation around the world. So basically this new law would make a guarantee to European consumers that the products they buy do not contribute to the destruction and degradation of forests, including of irreplaceable primary [00:06:00] forests and would hence reduce the EU contribution to change in biodiversity loss globally as a result. I thought that, you know, one of the statistics that’s mentioned in this article is that from 1990 to 2020, an area that is larger than the European Union has been lost to deforestation. EU consumption has caused around 10% of that loss, but of course can imagine who the other contributors to that loss might have been.

Dina Cappiello: I also felt it was interesting, James, because, you know, this is about legislation. So much of environment, so much of environmental and climate policy addresses the sources, right? The sources of emissions. And this is obviously addressing the sinks, right? The things that take things out of the atmosphere, particularly carbon dioxide through photosynthesis. But, I think that’s a really interesting way to do it.

James Lawler: Yeah. This week we also had some, some news on the, if folks had been following the Auxin trade case on tariffs in for the, that apply to the solar industry in spring of [00:07:00] 2022. A small solar panel manufacturer, Auxin, asked the United States Department of Commerce to look into if there should be a tariff on solar panels coming from Southeast Asia, which might be avoiding the solar tariffs from China, which were put in place during the Obama administration due to what were considered to be unfair subsidies that China’s government was offering to local manufacturing of solar panels.

So this week, the Commerce Department concluded the investigation and they found that yes, in fact, Chinese companies were circumventing this tariff by assembling their panels in Vietnam, Thailand, Malaysia, and Cambodia. Surprise, surprise.

Darren Hau: Just to tee things up, perhaps, we tried doing solar manufacturing in the US We still do have some solar manufacturing, primarily for solar and a few smaller companies.

But historically, China has massively subsidized their industry and they have dumped solar, uh, into the western world, and as a result, they control the vast majority of that manufacturing capability. [00:08:00] I think the challenge is, given that that is a status quo. The solar industry here is predominantly focused on design, development and deployment, and they see Chinese solar panels as an important input.

So on one hand you have solar manufacturers who say, Hey, you know, this is certainly seems unfair. On the other hand, you have. The real bulk of the solar industry, quote unquote, that would be disadvantaged if this tariff went through.

James Lawler: Now, luckily for the US solar industry, the Biden administration had released an executive order to halt any tariffs for two years.

Now that finding poses challenge for us manufacturers to step up production. Right. Anti-United States solar installers to find affordable panels.

Any other headlines on your radar?

Dina Cappiello: Yeah, we just keep talking about, and there’s still more news on this today, about the shootings that occurred at the two electrical substations down in North Carolina and how something like that cut power [00:09:00] to thousands of central North Carol Carolina homes last weekend. And you know, obviously, at RMI, we don’t research or analyze things like this, like freak incidents, like this, but it just, when we were talking about it as, as a team, it just, once again, affirms that, you know, centralized electricity systems are vulnerable to all sorts of things, whether that’s a hurricane or a storm, or something as freak as this, where there was a days long blackout.

Darren Hau: I just have to say it’s incredible how fragile our grid is, and I know, I feel like most of the coverage has been about the potential for cyber attacks and so on. But yeah, someone taking pot shots can take very expensive equipment offline very quickly.

James Lawler: Today in our interview segment, we’re exploring geothermal energy, geo meaning earth and thermal, meaning heat.

That’s energy that comes from the earth itself, from the ground right [00:10:00] underneath us. More specifically, we are going to talk about how we can use geothermal for residential heating and cooling with Dandelion Energy‘s co-founder Kathy Hannun. Kathy was previously a rapid evaluator at Alphabet’s Innovation Lab X, where she came up with the idea for Dandelion.

In this episode we’ll explore key questions about geothermal heating and cooling, including:

– What makes geothermal heat pump so efficient and affordable to run?

– What are the biggest challenges to installing geothermal?

– And are there Inflation Reduction ACT benefits available for homeowners interested in installing geothermal heat pumps?

We’ll start the conversation with Kathy explaining what a geothermal heat pump actually is and how it works. Then we’ll go into some of the benefits and challenges of geothermal heating and what types of homes are best suited for geothermal heat pump installation. We’ll end with the cost of heat pumps and how Dandelion is making it more affordable for homeowners to install them.

Important to note that Dandelion was not a sponsor of this episode or of Climate Now.

Kathy, welcome to Climate Now. It’s great to speak with you today.

Kathy Hannun: Thank you. Thanks [00:11:00] for having me.

James Lawler: Could you just define for us what is a geothermal heat pump?

Kathy Hannun: Absolutely. A geothermal heat pump is comprised of two major components.

You have the heat pump itself, which essentially looks like a furnace or a refrigerator, a box. You know, heat pumps might be an unfamiliar term, but we’re very familiar with them. Like every refrigerator is a heat pump. Every air conditioner is a heat pump. They work by using electricity to move heat from one place to another.

And a geothermal heat pump is special because it’s connected to ground loops, and those are plastic pipes that are buried under the ground, typically in the yard next to the home, it extends anywhere from 300 to 500 feet down into the yard. So it goes quite deep and it’s shaped kind of like a bobby pin. You know, one side of it goes down and then there’s a hair pin turn, and then the pipe comes back up and it’s connected into that…into the basement, usually, to the heat pump that’s sitting where the [00:12:00] furnace used to be. In the winter, it will pump heat that’s just passively collected by the water flowing through that ground loop into the heat pump, which will then concentrate it so that it’s actually like hot, you know, a hundred degrees Fahrenheit or so, and then it will blow that hot air throughout the house just like a furnace would.

And then in the summer that heat pump’s extracting heat from the house like an air conditioner does, and putting it in the ground loop where it’s dissipating the heat into the ground.

James Lawler: So you have a heat pump, which is essentially a device that circulates water through these ground loops, which go 300-500 feet down into the ground and kind of make this hard angle at the, at the bottom of that…of that loop and come back up. So that water that’s then passed all the way down through the ground and comes back up is at some ambient temperature. And, and what temperature is that water when it comes into the home from that loop?

Kathy Hannun: Yeah. So you really size… the way you size the ground loop and determine [00:13:00] for this given home, how much ground loop does it need, is you’re making it long enough so the water will never go below 30 degrees Fahrenheit in the winter and never go above 90 degrees Fahrenheit in the summer. And I should say there, it’s a water-glycol mixture. So 30 degrees does not freeze the loop because it has some antifreeze in it.

James Lawler: I see.

Kathy Hannun: But, it’s a bit of an oversimplification to say that that ground loop never changes temperature over the course of the year.

In fact, it does, but it stays within a range that the heat pump can tolerate and is fine with.

James Lawler: Interesting. And so when the refrigerant is at a lower temperature, like let’s say in the winter and it’s closer to 40 degrees, or you know, in that range, it’s just….takes more electricity to condense that heat and to reach a sufficient temperature to keep the home at the desired level. Is that…is that accurate?

Kathy Hannun: Yeah. In the summer, let’s say you’re, you’re cooling your house to [00:14:00] 73 degrees Fahrenheit. I don’t know, I’m just putting a number out there. And the ground is probably, 50 degrees Fahrenheit. It’s very easy to do that because you’re taking heat from a 70 something degree house and putting it in a 50 degree ground, you know?

And then even in the winter when you’re taking heat from the 50 degree ground and putting it into, let’s say again, you set your home to… 70, I don’t know. It’s not a huge differential, right? You’re…you do have to put in electricity to do that, but like, it’s not a huge gap and that’s really conceptually why the geothermal heat pumps are so efficient.

Whereas if you had an air source heat pump, right, you would be trying to move heat from, I don’t know, 20 degree Fahrenheit air outside, or maybe even colder on some days to a 70 degree home.

James Lawler: So what led you to start a geothermal heat pump company? Wh why is the technology attractive?

Kathy Hannun: Well, I was working as a product manager at Alphabet’s X Lab and I was looking for [00:15:00] opportunities in the climate space that X might wanna pursue.

James Lawler: Mm-hmm.

Kathy Hannun: So a very open-ended mandate, but a really cool job. Cause I just got to learn about all of these opportunities in climate. About a few years into that position, I learned about, for the first time, geothermal heat pumps, which, to be honest, have been around for decades. A fifth of the homes in Sweden already used them, so not very new, but they just haven’t really gotten any traction here.

But I was really intrigued because US Homes are responsible for about 20% of greenhouse gas emissions in the US so a huge segment. Heating and cooling are… dominate in terms of how homes use energy. And even at that time, which was maybe like 2015, 2016, it seemed very likely to me that heat pumps would be the solution.

There is a lot of reason to believe air source heat pumps will play a big role because they’re essentially air conditioners that can run in reverse and do heating as well. But I hadn’t really heard about ground [00:16:00] source heat pumps and they have a lot of attractive properties, so they’re the least expensive type of system to operate.

James Lawler: When you say least expensive in comparison to what do you..?

Kathy Hannun: Pretty much anything else. So if you look at, okay, if you, okay, big caveat. If you already have a geothermal heat pump installed in your house, the cost of running that system is probably lower than any other system you could have. And they’re the most environmentally friendly option.

75% of the energy you’re using to heat and cool your home is just free renewable energy from the ground. And the remaining 20-25% is electricity. So as the grid cleans up, that becomes renewable as well, and they have really good properties for the grid actually, so they decrease summer peak. They just make it much more possible to electrify. Geothermal heat pumps also have a really nice property because of that thermal connection to the ground and not caring about the weather outside. They just work really well in extreme temperatures, and this is something that other electrification solutions for home heating and [00:17:00] cooling struggle with. So, air source heat pumps are amazing, but it’s hard when it’s really, really cold out, it’s hard to extract enough heat from the air to adequately heat the house.So the ground source heat pump just gets around those issues.

James Lawler: So why then haven’t they been adopted more readily? here. If they work better in extreme temperatures, they’re cheaper to run, they’re more efficient. They reduce grid energy demand. How hard is it to convert your home to geothermal heating and cooling?

Kathy Hannun: Yeah, it’s a great question and actually one that… it’s not straightforward because different types of homes can have a much varying levels of difficulty when it comes to how easy or hard it is to convert them. And so one of the things we’ve had to get much better at as a company over the course of our existence is identifying as simply and early as as possible in the process which homes will be good candidates. And so today we specialize in forced air heating and cooling, so homes that have duct [00:18:00] work or are okay willing to install duct work. The reason for that is that radiators in the United States tend to be built or just sized to require very, very hot water, and heat pumps are not so good at very, very hot, you know? Like they…it’s much easier to produce, let’s say, 120 degree water versus 160 degree water, or 180 degree water, which you might get from your boiler. And unfortunately, a lot of the radiators are designed for that 160 or 180, and so there really aren’t great heat pump products on the market today that can retrofit into those homes.

One thing I noticed though, is that air conditioning is becoming a non-negotiable for many more homeowners throughout the Northeast and so, you see a lot of homeowners adopting duct work or ductless solutions. Anyway, I think it’s possible that we end up solving the problem of retrofitting homes with radiators [00:19:00] without actually needing to solve the a hundred degree Fahrenheit or 160 degree Fahrenheit water problem, cuz those homeowners will probably want air conditioning.

But anyways, if you have a home that’s using an oil furnace that has forced air, it can be quite straightforward to retrofit. Of course, you need to put those ground loops in, and we’ve done a lot of work to make that process easier and more straightforward and less disruptive. And then you can just take the furnace out and put the heat pump in where the furnace used to be, and connect it to the same duct work often.

Sometimes the duct work fits. Sometimes it needs to be modified because sometimes it’s undersized for a heat pump, but a lot of the work we do is trying to design our products and processes so that we have to change the home as little as possible to make it work well with the heat pump.

James Lawler: So what are some of the, what are the main challenges in doing this?

Kathy Hannun: I think that the challenges fall into three buckets, really. There’s like product challenges, which I’ll describe a little [00:20:00] bit. There’s challenges with the distribution system for these products and how fragmented it is. And then there’s challenges also just with the customer experience overall that sort of arise from the first two challenges.

James Lawler: Right.

Kathy Hannun: So… I mean, from a product standpoint, there’s a lot to talk about, but I… a few of the things are, you know, for geothermal in the past, the type of drilling rig that has been traditionally used in this country for putting in ground loops has been a water well rig. So the same type of rig you would use to put a water well in your house, or in your yard, I guess, to be more precise. And the challenge there is that most homes that need water wells are rural, so they have a ton of land, and typically it’s like less of a problem if mud goes everywhere. Right? But when you go into suburban communities, it is a big problem if you create this huge mass and mud goes everywhere and actually you don’t even really get the opportunity with a water well rig cuz it literally cannot fit in the yard to [00:21:00] begin with.

So, you know, when we look at our customer base, more than half of the customers we’ve installed geo for over the past five years, they could not have gotten it with a water well rig. And we’ve, we’ve actually learned a lot about how they tackle this in Sweden and they have these very small, nimble, easy to move from home to home rigs that are… you can connect them with a hose to a dumpster so that like literally all of the mud coming out of your hole is just being funneled to a dumpster that you can.. You know, they’ve really thought about this.

So I don’t think we can claim credit for inventing any of this, but we can claim credit for noticing that this solves problem somewhere else, and then we had to translate it a little bit so that it fit the US context, cuz not everything is exactly the same between here and Sweden. So there’s a lot of work to do on the drilling side just to come up with a solution that was more appropriate for most homes. And there’s a lot of barriers on [00:22:00] the interior of the home too.

James Lawler: Now before we move to the ne, that next area, so on the drilling front, do you guys have your own custom-built drilling machines or are they…?

Kathy Hannun: We don’t. We buy our drilling machines off the shelf, but the suite of equipment is something that we’ve designed for our own…

James Lawler: The combination of all the things, okay…

Kathy Hannun: our own optimization to make the least expensive and sort of most customer friendly. The other thing we’ve done on the drilling side that was really important had to do with bringing data to the problem of determining how much ground loop to install. So I mentioned to you earlier that you size the ground loop by solving the equation.

How long does this thing need to be to never go below 30 degrees Fahrenheit and never go above 90 degrees Fahrenheit? And when you’re in the Northeast context, the only part of that equation that matters is…never go below 30 degrees Fahrenheit. Because like if it’s not gonna do that, there’s no way it will go [00:23:00] above 90. And the way that that problem was being approached before Dandelion for residential was using a rule of thumb, which was, you know, installers would just estimate that… I know at least in New York, the rule of thumb was 150 feet per ton. We measure the amount of heating a home needs in tons, and a typical home has five tons, and the rule of thumb was you need 150 feet of ground loop for every ton of capacity the home needs. But whenever you have a rule of thumb, it’s solving for the worst case scenario. Because you never wanna put into little ground loop. And so what we were able to do is we acquired this proprietary data set that of thermal conductivity values which is a measure of how well the ground will give up and receive heat from the loop. So the higher the thermal conductivity, the less ground loop you need to exchange the same amount of heat. [00:24:00] And with that data-set we were able to come up with our own map of thermal conductivity values and, and they vary significantly from place to place.

And so…

James Lawler: Interesting. Just by virtue of the type of rock that’s…

Kathy Hannun: Yeah, that’s in the geology. Yeah, exactly. And so that’s allowed us to dramatically decrease the average size of our ground loops that we install.

James Lawler: Amazing.

Kathy Hannun:  We can use data. And still, in the worst case, you’re gonna get 150 feet per ton, but it’s just like so rare that you’re in the worst case.

So we saved so many homeowners a lot of money by not forcing them to design to the worst case that doesn’t apply to them. So we’ve brought product improvements like those. To the ground loop side, there’s similarly barriers on the interior. So often homeowners have duct work that’s too small for heat pumps cuz it’s been designed for furnaces.

James Lawler: Now why would it be too [00:25:00] small? Is that just because the forced air from a oil burning furnace is gonna be a lot hotter than…

Kathy Hannun: That’s exactly right.

James Lawler: I’m catching on.

Kathy Hannun: That is a major barrier to home electrification that is not talked about enough. It really is. For all of these homes in heating dominated climates…Exactly as you said, furnaces produce hotter air, so you need less volume of air to heat the house sufficiently. And whenever you install any type of heat pump, you’re gonna need more air because the heat pump doesn’t heat that air quite as much. It still heats it enough to heat the home, but you just need more air to do it.

And often the duct work isn’t up to the task. And the problem with that is it’s just invasive and expensive and complex to upgrade duct work. You know, that’s a challenge. Upgrading the home’s main panel can be required to install a heat pump. That’s a challenge.

James Lawler: The electrical panel you mean?

Kathy Hannun: Yeah, exactly. Just [00:26:00] because an electric powered heating and cooling system, it’s typically an added load for the home that might push them over the edge of needing, needing that upgrade. Not always, but sometimes. A lot of homes in the northeast were built in like the 1700s, so they might have gone through a lot of iterations. Like they’re… they can be a little Frankenstein at this point where it’s like they did have radiators and then duct work was installed in part of them, but not all of ’em. And like… there’s complexity, right? And so a lot of our work is just trying to figure out how do we have a process for evaluating the home and designing the system that brings as much standardization to those obstacles as we can which will translate into cost effectiveness for the homeowner.

It’s not a solved problem, like it’s an ongoing area of R&D (research and development) for us. I think another challenge with heat pump retrofits of all types is that you have too many different players that don’t communicate to deliver [00:27:00]  a great product. So you, so in our case, we take on the design. So we evaluate the home, we look at the main panel, we look at the ducts, we look at the heat load that the home needs and the cooling load and a lot of other things too, like is there space for this heat pump?

Where will the ground loops go? Will it be far enough away from a water wall? Like, you know, there’s a lot of detail there. We do the drilling. We do the tie-in to the home. We do the heat pump installation. We quantify the value proposition for the homeowner. It’s like…”okay, here’s how much you’re spending for fuel oil today. Here’s how much you would be spending if you did geo, and here’s your payback period, or here’s your savings per month.” You know, whatever the homeowner wants to see. We apply for all the permits, we collect all the rebates and take care of all of that for the homeowner. We provide service to the homeowner should they need it after the install.

And I just think that level of service is necessary because it gets [00:28:00] very complicated.

James Lawler: So according to Bloomberg, purchasing and installing a Dandelion heat pump costs at least $18,000 even after subsidies. By contrast, the price of a conventional air conditioning unit ranges from $3,800-7,500. All a gas furnace costs $2000-$6,000.So one question. is this affordability question. How can this be made affordable for Dandelion customers to compete with some of these other options?

Kathy Hannun: Yeah, I guess I’d point out a few things. So one is the geothermal system does both heating and air conditioning. So you’re already, you know, that decreases the gap a little bit there.

But yeah, I think the more important thing is that it costs so much less to run the geothermal system than a furnace. So let’s start with fuel oil furnace, because that’s our target market today, that we do serve a lot of gas customers as well. It will cost a typical homeowner in the Northeast $4,000 a year maybe,

James Lawler: maybe more,

Kathy Hannun: a little bit more recently [00:29:00] yeah, maybe $5,000 a year to heat with oil.

And it’s totally dependent, of course, on the price of oil. Yeah, of course. It will cost that same homeowner probably about $1,000 to run their geothermal system. So you just have a lot of savings every single year after you get the system installed, and that makes the data quite attractive.

The other thing that is really useful is that you’re no longer vulnerable to the fluctuations in oil prices, nearly to the same extent. So I know for a lot of homeowners it’s a source of stress…like something a hundred percent outside your control will have such a big impact on this bill that you have to pay.

And then the last thing I’ll… You know, lots of renewable energy is more expensive upfront, but less expensive to run, and that problem is solved with financing. That’s what solar did. It makes a lot of sense if you finance our system. For [00:30:00] most homeowners that are using oil or propane, at least, even if they pay nothing upfront for the system, their monthly payment on the system plus the cost to run the system each month is still less than what they’re paying on average for fuel each month.

So literally they get the new system for no money down and they’re cash flow positive. And that has been a very compelling value proposition.

James Lawler: Mm-hmm. What about the IRA benefits? Are there benefits to geothermal heat pump installation? Can these be accessed yet?

Kathy Hannun: It’s hard to overstate how impactful it’s been for us.

It’s been incredible. Like… I’m so grateful for it. But yes, so a lot, some of the benefit is already being felt. For 10 years, there’s a 30% tax credit federally for homeowners who get a geothermal heat pump. So 30% of the…

James Lawler: Is that already kicked in?

Kathy Hannun: Yeah. If you got one today, you would get 30% of your bill paid for by that tax credit, assuming of course you [00:31:00] were… you had a tax burden that you could use to pay that.

That’s very useful. And then on top of that, the bill has sort of paved the way for us to start to explore a leasing option. So today our financing option has all been loans.And for reasons that are probably not worth getting into, but just like… specific legal reasons, it hasn’t really been possible to do third party ownership with geothermal heat pumps, but that’s starting to change.

I think that will be a really big deal because suddenly homeowners won’t have to put these systems on their balance sheets if they don’t want to. They can have another party own the system, and sort of, they can pay for the service of getting the heating and cooling.

James Lawler: Kathy, thank you so much. It’s been great to have you on today and really appreciate your time and best of luck with everything. It’s super exciting what Dandelion is doing. Looking forward to seeing you guys grow exponentially.

Kathy Hannun: Thank you so much, James. I appreciate it.

James Lawler: That was [00:32:00] Kathy. Co-founder of Dandelion Energy, a company installing energy efficient geothermal heating and cooling in residential homes around Massachusetts, New York, and Connecticut, and potentially also expanding into Colorado and Maryland soon.

That’s it for this episode of the Climate Now podcast. For more episodes, videos, or to sign up for a newsletter, visit us at climatenow.com. We hope you can join us for our next conversation.

Climate Now is made possible in part by our science partners like the Livermore Lab Foundation, the Livermore Lab Foundation supports climate research and carbon cleanup initiatives at the Lawrence Livermore National Lab, which is a Department of Energy applied science and research facility. More information on the foundation’s climate work can be found at livermorelabfoundation.org.