Is Geothermal Energy the Next Solar?

– Well, Kathy welcome to Teslanomics, I’m very excited to hearabout your company, Dandelion. Is it just Dandelion oris it Dandelion Energy? How do you guys prefer it? – Our real name is Dandelion Energy, but many people just call us Dandelion. (upbeat music) – Hey guys, that was Kathy, the co-founder and CEOof Dandelion Energy, a company that is trying to bring kind of all the modern tech stuff, we expect in our homeappliances, to geothermal heat, don’t know what that is, that’swhat we’re gonna talk about in this interview.If you live in a place that is colder and you spend a lot of money on heat preferably, if you have afurnace-burning fuel oil, they call it, which is kindof some form of diesel, this will be a veryinteresting conversation to you and one that could saveyou a lot of money. I do want to thank Dandelionfor sponsoring this episode as well as this channel, andI hope you guys learn a lot and really enjoy this conversationI had today with Kathy. Here you go, let’s jumpinto the interview now. Tell me what it is you guys do because I just heard about it recently and I’m guessing a lot of my viewers, probably those on theWest Coast especially, don’t have a clue about this, so please I think it’s fascinating, so let me hear you telllike what it is you guys do here at Dandelion. – Absolutely, so geothermal energy, it’s, geothermal heat pumps havebeen around for decades.It’s a way of using the vastreservoir of renewable energy stored right underneaththe Earth’s surface to heat and cool buildingsvery, very efficiently. But in the past it’s been mostly something that only very wealthypeople could afford, and not only did you have to be wealthy, you had to be like very, very motivated, because there was no infrastructure for getting these things inin any sort of seamless way. And so what we’re doing at Dandelion is just really turning why there is now very much a niche technologyinto a mainstream technology. And specifically, we’re making geothermalmuch less expensive, and just much easier for homeowners so that they can sort of outsource the process of installation. – Yeah, so you’re using the energy that is kind of justbelow the surface, right? And how are you actuallygoing about doing that ’cause I thought thiswas kind of interesting when I first heard it. – Yeah, so the way that we do it is there’s what’s called a ground loop, that we install in the yardand this is a plastic pipe.Actually fairly thin, it’s about an inch and a 1/4 in diameter shaped like a long thin Uand it just circulates water. But even though the pipeis thin it’s fairly long. So this pipe goes about500 feet into the yard, – Oh wow.- Yeah, and circulates that water and then that water is run into the house into your heat pump, where the heat isextracted from that water, the temperature is boosted and it’s blown through your house.One way to think about this is other heat pumps thatwe’re so familiar with in day-to-day life are airconditioners and refrigerators, and so the way they workis they use electricity to move heat from one place to another and air conditioners, they’reexchanging heat with the air, and the downside to doing that is the air tends to beexactly what you don’t want in sense that the days when you want to air-condition the most is when the air outside is the hottest but you’re trying to rejectheat into that hot air, which is hard. – Right, I had a problemactually at my house when we did AC install that. It was sucking air from the attic and using that to conditionit, to cool it down, but the air in the attic was much hotter than the air that I wanted,so it just never worked well.I had to fix that after a while. So that’s interesting. So what is it about the going underground, like why do that? Because I think this is akey thing that blew my mind. – Yeah, so the reason that it’sso helpful to go underground is underground it’s about 50degrees Fahrenheit year round. So in the winter you can pull heat from that 50 degree environment. Again, you’re boosting thetemperature so don’t worry your house will be warmer than 50 degrees but you’re able to pullthat heat into the house.But then, in the summer, you’re rejecting heatinto the 50-degree ground, which is so much easier than rejecting it into the 80-degree or90-degree air outside and this property lets your heat pump run very, very efficiently. – Right, so essentially, and you said, the pipe is 500 feet, but I don’t imagine yougo down 500 feet, right? – You do actually.- You do? Wow, okay. – Yeah, so there aredifferent ways of doing it. Some people have what arecalled horizontal loops where it’s more of aslinky, that’s buried, let’s say eight feet underground, but we tend to install systemsthat go vertically 500 feet and the reason we do that is that we want to minimizedisruption to the surface.So if you put in a horizontal system, you literally, I mean, your yard, it looks like you’reputting in a swimming pool, that’s like four times asbig as a swimming pool, you know what I mean, andthen you fill it back in but if you’re going down theamount of surface disruption is much less. – So how much surface disruption is there ’cause this was a question I had. I mean, obviously, if you, say, live in an apartment or a building, this isn’t an option foryou, but if you have a home like how much room do you actually need to install something like this? – Yeah, you need very little room.I mean it is, I think,the biggest challenge isn’t the room you needfor the loop itself, but the drilling equipment needs to be able to access the yard in order to even put that equipment in, and so that’s one reasonthat at Dandelion, one of our top focuses isdeveloping drilling equipment specific to this use case. – Yeah, yeah, I could see that. I mean, in California it’sa different landscape, but property is expensivespace, is very limited, and actually I’ve had several times I’m trying to do something inmy yard and that was an issue was even getting the equipment back there. Like it’s a given, right? Depending where you are,some areas, it fine, but in other parts likeout here in California, it’s definitely not a given so. – Right, and so that’swhy the drilling equipment that we’re designing, it’smeant to be very small and very nimble so that that access issue isn’t an issue anymore, because as long as you canget the equipment there, if you have any yard at all, you’ll be able to install that loop because again, it’s verysmall, I mean, it’s very long, but it’s in terms of thesurface that you need contained, so it will be critical tobringing geo to more urban areas, to have smaller drilling equipment.- Yeah, that’s awesome. And then so you install the actual pipe, it goes down 500 feet, loops back, you run water through it to capture or reject the heat essentially, right? – That’s right.- Depending on AC, and then that comes back up into what? What’s the next step onceI’ve got that energy captured? – Yeah, absolutely. So you’re going to run it throughyour geothermal heat pump, which is sitting whereyour furnace used to be, or your boiler used to be.And so inside that heat pump, it essentially lookslike an air conditioner you can run in reverse. It has a heat exchanger, where you’re passing that heatyou collected in that water to a refrigerant and thenyou’re using a compressor to boost the temperatureof the refrigerant, where you can harness that heat for blowing hotair throughout your home to heat it. – Got it. And that typically, thatunit, how big is it? Is like a refrigerator sizeor washing machine size? – It’s actually very similarto the size of a furnace.So usually what happens iswe just take the furnace out of the home, put that heat pump exactly where the furnaceused to be and connect it to whatever the furnaceused to be connected to. – Gotcha, and so for people in California, furnace is the thingthat heats your house. – Yes.- Okay? (laughs) But in the Northeast, this islike a common thing, right? Now, these live indoors typically, like if you already haveone unit, you know that. But if you don’t, likeout here in California a lot of people we have them on our roofs or we have them just sittingoutside of our house.So could this survive outside or would it be preferredto be inside typically? – It’s definitely preferableto have it inside, because it’s isolated from – The elements and stuff?- All potential damage of elements, and it’s longer-lasting. In the Northeast, peopletend to have basements, I know that’s not as common in California. (both laughing) Most furnaces are in basements here, but like I lived inCalifornia for 12 years before I moved to NewYork just this year, so. – Oh wow.- I had a natural gas furnace. It was just in a sort of utilitycloset and that works too. We see that here as well.- Got it. And so why would someone actually do this? Like what’s the incentive? If I’m a homeowner, and I have a furnacealready, it’s working, why would I go this route? – Yeah, well, our initialcustomers in the Northeast tend to be using, notall of them, but many, tend to be using fuels like fuel oil or propane to heat their homes and fuel oil is a nice way to say diesel.People are using diesel to heat their homes.- That’s bad. – So that’s actually super common, millions and millions of people do that. – How do you vent that? I didn’t even, I’ve heard fuel oil, but I didn’t understand that ’cause I know diesel,I mean you can’t like sit in your garage witha diesel car running, so there must be somekind of ventilation system or something for those right? – They have ventilation pipes, kind of like a tailpipe for your house. – That could be dangerous. That could be like seriouslydangerous for your house. – I mean, when you startyour fuel oil furnace for the first time, itdoes tend to have a smell.They can leak into your basement. It’s clearly not the best for air quality to be combusting diesel in your house, but these are necessaryevils that people live with, because they don’t have any other option. – Right, right. And so by going with the system that you guys have set up here, a geothermal system, I’mgoing to eliminate that danger am I gonna save money, like what other benefits are there here? – Exactly, so not onlyis fuel oil poisonous and combustible, (laughs)and like very annoying because you have to havea truck come to deliver it and pump it into a bigtank in your basement, it’s also very, very expensive. And not only is itexpensive but like diesel, all of us are familiar with this, the price fluctuates wildly, and so not only is it a major expense, but you can’t really predictwhat it will be in the future, which is just a veryfinancially stressful situation. So, just like through a heat pump, a geothermal heat pumpand all of a sudden, your bills are much lower and they’re much more predictable.- Right, and so I think thepredictability is the key thing, probably for most people, right? Like if it’s a known quantityI can live with that, I can budget that, if it’ssome other geopolitical event and all the sudden now it costme double to heat my home, which I have to do, thenthat’s a problem, right? So, okay, so I get this installed and I have a predictableamount for energy cost. Does it use electricityto do all the pumping? – It does.- Okay great, yeah. – Instead of paying for fuel oil, you’re paying more for electricity, but you’re actually coming out ahead. So your operating costsfor the geothermal system is much lower than for a furnace. – Do you have like a calculator, or some kind of I don’t know, range of how much peoplewould probably save, I know when I got solar installed, there’s kind of thisconcept of a payback period? Do you guys have that as well, where it’s you know?- We do.- Yeah, give me thosedetails, I’m curious. – Yeah, of course. So for a typical home thatwe serve in the Northeast, the payback period is anywherefrom five to seven years. – Mm-hmm.- So it’s quite fast, but it actually can beshorter if the homeowner was going to have to replacetheir furnace anyway, because then you don’t have to do that so then your paybackcould be almost immediate. Like solar, we offer financing options. So if a homeowner decidesto pay nothing up front and take a loan to pay for their system, their loan payment plus theirincreased electricity payment is actually less than what theywere paying for a fuel oil.So they have an immediate payback if they choose the financing option, – Wow, okay, great. So if I need to replace my furnace, this is a no-brainer, right? If I don’t need to replace my furnace, but I am concerned aboutdiesel combusting in my house, which is something I wouldbe very concerned about, or I just want more predictability or I guess, obviously this reduces kind of the personal CO2emissions that somebody emits, I imagine, by a substantial amount or our furnace is generallygood, I don’t know. Like how bad are they, yeah? – So, even if you’re notgonna replace your furnace because fuel oil is so expensive, you’re actually still gonnabe financially better off to replace it with a geothermal system. In terms of emissions, yeah I mean, heating and cooling in the Northeast, I can speak to better than California and I would have to runthe numbers for California, but in the Northeast, it’sone of the largest sources of greenhouse gas emissions. And not only that it’sespecially problematic because they’re allpoint source emissions, like everyone’s furnace, it’s millions and millionsof point source emissions and heat pumps really are the only way to clean those up, right, because you can’t straight electrify it.Electric resistance heating is actually the mostexpensive possible way to heat your house (laughs) so. – Yeah, I’ve looked at at that, and it’s just like electricwater heaters, for example, I was like yeah, let’s dothat, I’ll be all electric and I looked at them like this is not, (laughs) this is not really viable yet. It’s one of those things where the amount of electricity needed is tremendously largerthan you would imagine for something like that, yeah. – Exactly and electricity is such a high-value form of energy, whereas heat is the lowestvalue form of energy. And so it makes sense thatif you’re just gonna resist the highest value formof energy to the lowest, like that’s probably not ever gonna be the best economic choice,but what a heat pump does is because you’re not using electricity to create all of the energythat you’re using for heating, you’re actually usingelectricity to move the energy from one place to another.And the way you define theefficiency of a heat pump is something called theCoefficient Of Performance or typically referred to as the COP, and the COP of our heat pump, for example, is just over four. So what that means is forevery one unit of electricity you’re actually movingfour units of usable energy into the house. – Good, yeah, so that’s a big return then. – You’re getting a lotof free, renewable energy that you’re using to keep your house that you don’t have to pay anything for. – Now, with your client base, we mentioned we talked aboutbasically the limitation or the barrier besides cost is getting the drillingequipment in there, but space isn’t really an issue here. So who are the people thatare kind of primed for this? I know actually, my mother-in-law, she lives in Montana in a very rural area, and this was the first time I had heard of geothermalheating and cooling because they explained it to me that they have these pipes in the ground and it just magically makesthe home a perfect temperature all year round (laughs) and they have this giant solar system and they’re like yeah,it’s basically free.I’m like I don’t fullybelieve this, but okay, and now here we are, and I’mlearning so much more about it but who are people that arekind of primed for this? Is it somebody living in asubdivision in Connecticut, or is it somebody out in a rural area, like who is, kind of moresuited for it typically? – Mm-hmm. Yeah, it’s a great questionand I can speak first to Dandelion’s customers, but then I’ll talk more broadlyabout geothermal in general.So in terms of who we serve and who we find is the bestfit in our service territory, which right now is upstateNew York, it’s people again, people who get the bestpayback are using fuel oil, propane or electric resistance. We actually do have a lot of customers who switch from natural gas, but for them it tends to be a choice that’s not purely economically-driven. So you tend to, you’re not worse off with geothermal than natural gas, but given the low prices of natural gas, it’s not super different. And then beyond that, ourproduct today works for homes that have existing ductwork.So we tend to look for homeowners who don’t have to doextensive ductwork remodeling in order to adopt the heat pump but yeah, I think subdivisionversus rural, both are great. I would say the limitation is, we’re not ready to tackle aplace like Manhattan, right, it’s like very, verydense, very hard to drill, so the environment, and then more broadly, sorry, one minute, I’mjust gonna quit Slack so that it doesn’t keep popping up, so. – No worries. – More broadly, theplaces where geothermal makes the most senseare places where people are spending a lot of money for heating.Because geothermal costs less for heating, you just save money more quickly if you’re spending more to begin with, so. Throughout the Northeast, the Midwest, those are all prime markets. – Right. The parallel for me withsolar is kind of how, where I live in San Diego,solar isn’t actually the best, because the we don’t spenda ton of money on cooling, because the temperatures aregenerally pretty agreeable but like Phoenix where I’m from, you spend ungodly amountsof money on cooling and you have tons of sunshine so solar is just a slam dunk out there.- Yeah, that’s exactlyright, that’s actually right. – So if you spend a lotof money on heating, this is obviously a good option. – Mm-hmm, yep. And geothermal workswell for cooling as well, so the best best places (laughs) are ones where youspend a lot of money on heating but you also have an air conditioning need because the system does both things. But certainly in the U.S, I do think that theheating dominant use case will be the one that drivesto your thermal adoption.- I mean, and that’s agood very large percentage of the country, right?- Yeah. – Like I’m down here atthe southern Western end, a very kind of in a different world, but yeah, that makes a lot of sense. So let’s talk about the company,because I think you guys, like I’m interested in hearing how you kind of came to this path, right? I’m always fascinated tolearn the motivations, what led to it, I know thisisn’t how I built this, but I’m curious just like,(Kathy laughs) and I know you guys gotsome investment recently and congratulations, but just like, like what led you downthis road to do this? Is it a climate change kind of thing, or is it a you had afurnace you hate it as a kid or something like that? Like really ’cause likewhat’s the origin story here? – Yeah, of course. I think for those of uswho are environmentalists and panic every time wehear about the latest, like giant iceberg melting or notice that yet again wehave the hottest year on record, it can seem like a veryintractable problem, because you don’t want to pitthe needs of the world economy against the needs of the environment.It’s a very hard. (laughs) It’s a hard way of looking at the problem. And I think that the thingthat I found so exceptional about the opportunityto transition heating to heat pumps is that economically it’s in thehomeowner’s best interest, right? Like people are saving moneyby switching from heating fuels that they do not like using to renewable electrified heating, and that is, it just struck me, like this is a problemwhere all of the interests should be aligned. We just have some work todo to get the technology and the process to apoint where this product is actually ready for the mainstream, but like creating technologyand creating business models and processes, likethose are doable things, and the scale of whatcould be accomplished if we do them is so vast. So again, there are hundredsof millions of buildings that are burning fossil fuels and, unlike electric vehiclesand renewable electricity, I don’t think there’requite as many companies, or people really focusedon tackling this problem.- Yeah, good point.- So it just seems like this is a problem space that really needs moretalented people looking into it and needs more R&D and more(laughs) creative thinking, and if we can figure it out, it will just make such a big difference, not only to saving peoplebillions of dollars, but also cleaning upall of those emissions. – Yeah, I mean, but how did you, how did you think of this idea? Like what brought yousaid, hmm, heat pumps? You said you lived in Californiafor the past 12 years, so I don’t imagine it was fromyour time out here, right? – Yeah, it certainly wasn’t inspired by living in California.- Yeah, like what sparked thisspecific idea of heat pumps? – Well, I had this job that was a perfect job forstumbling upon an idea like this, because my job was I worked as, what was called a rapidevaluator within Google X, and my mission was to find new ideas for X to pursue that couldturn into big businesses that would make a really big impact.And I focused in that capacity on energy, ’cause that’s what I’m interested in and that’s the problem scapethat really calls to me and I’m sure, that’s true ofa lot of your viewers as well. – Yeah, 100%.- Yeah, so in that job, I got this email one dayfrom a software engineer who was based in New York. At that time I was sittingin Mountain View, California, and he just laid out this case for why geothermal heat pumps were the number-one opportunity to make a transformational difference in how we use energy as a society. It was a very bold claim,it was a very long email and (laughs) most of the time, so because it was myjob to really like learn and understand these opportunities, I decided, you know I don’t know that much about geothermal heat pumps, I’ll dig into this andlike really understand the points that he’s making.- Yes, so that’s probably likehis best email he ever sent. (both laughing)Right. Like what other kind of thingswere people emailing you? Was this a, I’m veryintrigued now of like, I know reporters get tons of things, the random stuff, peoplewant to push their story, but like what other kindof things were people, like ideas were out there? – A lot of people emailedX about wanting funding for their idea or proposalsof various things we could do but so often, so often, you like scratch the surface and for whatever reason, that’s clear that it’snot exactly the right fit. And I totally expected thatto happen with this email. You know what I mean?- Right. – Just like the common experience, but the unique thing about it was the more I learned, the moreit really dragged me in. – Well, in your point about, so the point you made about the economics and everything kind of aligning is something I’ve beensaying for a long time with electric vehicles, right, where I focus a lot of myenergy, pun intended, I guess, but is that when an electricvehicle is clearly better like objectively in every way, people will stop rejecting them for whatever kind of biasesthey may hold, right? But if you’re trying to justplay on people’s psychology of being altruistic or something, that to me it never seemedlike a feasible business model.(laughs) All right. Like you had to show me in concrete terms how this would be better for me. And it sounds like that also kind of is what drew you to thisbusiness or this industry. – It is. And I look to Tesla as such a role model of a company for what needs to be done here, because before they showed us that you could make an electric car intothe most desirable car, that’s just not how peoplethought about electric cars at all, and now allthe major car companies are making electric cars. I think, I mean, the category of furnaces and air conditioners is one that there isn’t apleasant consumer experience. There hasn’t been a lotof attention paid to that, to making that product asamazing to use as it can be. I think Nest also showed us a little bit about what can happen when you take a neglected element (both laughing)of the home system and really put design andattention to the user experience and I think we’ll do that for heating and cooling equipment, and in the process, electrify it.Yeah, so that is certainly the vision. – So you get the email,you write them back and then you end up leaving Google, the venture part of it, right? You were at Google X. Google X, which part was that? Was this the moonshot division? – Yeah.- Okay. – It’s the moonshot division so the more we dug intogeothermal heat pumps, the more intriguing it became, and I ended up hiring James to Google X, who’s now Dandelion’s co-founder and CTO, because he had actuallysold a company to Solar City in the past and then workedfor five years at Solar City in their energy efficiency division. So he had first-hand participatedin part of that journey of taking solar panels fromthis niche expensive product to have the mainstreamproduct that it is today. And then, together withX, in evaluating the idea, it just became clear thatunlike a lot of the ideas that X pursues, the self-driving car being the most famous one,- With Waymo, or.- With Waymo, yeah, exactly. – Well, and there’s somany, like we could go off in so many tangents hereabout the Google X projects, but yeah, keep going (laughs). This one seemed more real. – Well, unlike that, sosome of the X projects that I think are actuallyvery well-suited for X, require a tremendous amountof upfront R&D investment in order to see a giant payoff. And I think Waymo is actuallya really good example of that. This wasn’t that at all, right, like Dandelion, thestyle of the challenge, it just lent itself togoing to market much sooner and running it more like a startup, and so that’s why we’ve made the decision, let’s go to market much soonerand run this like a startup and got their blessing to spinit out and take that path.- That’s awesome. So you saw something thatthe economics made sense and it was kind of aligning with your environmentalist kind of view, or the the energy space and with what you see as abig problem in the world, but I think, most importantlyyou saw that it was possible, it wasn’t something thatwas like a moonshot idea, it wasn’t a let’s builda self-driving car, it’s like yeah, okay, give us15 years and a couple billion, and we can maybe do it, right? This was like a give us, I don’t know a couplemillion or whatever it costs, and let’s go to market. So how far along are you now? I mean, how many customers do you have, or where are you at inthat kind of process of actually delivering these things? Are you still kind ofin research phase or? – No, yeah.We launched our Dandelion air heat pump, which we created specificallyto be filled with sensors, so it it monitorsperformance in real-time, can do diagnostics and providemore intelligence, I suppose, than most heating cooling systems offer and more transparency to the homeowner about how it’s performing. We launched that in June of 2018 and our market right now is upstate New York. So we’ve made the very conscious decision to start with a circumscribed geography to limit the complexity ofbalancing a lot of different like regulatory regimes, utilities and all the different things we’d have to, well, eventually take on.And one of the nicethings about this product is that there are so manyhomes that need heating that limiting yourself geographically actually does not limit your market in any way that couldslower growth at this point. So we’ve been focused on sellingsystems in upstate New York for the past, I guessalmost nine months now. – Wow, awesome. So people actually havethis in their home, they’re actually benefiting from this? So, since you guys areex-Google, and stuff like that, I love that you mentioned the sensors because I used to work at Facebook and we had a similarkind of central tenant and I’m sure, Google, as well, of like the concept of the value of data and so I love that you guys have all this. Are users of Dandelionable to see that data and interact with it in any way or, ’cause like one of the thingswith Nest, for example, it’s fantastic to just get these reports, how much energy you use,it’s like a simple bar chart, but it’s something you never had before.So I think it’s really cool. Is that a path you’re going? Does that already exist or? – That’s absolutely our path. So today, we prioritized justlike launching that product and formatting the data and starting to get insights from it. We do send the reports to thecustomers that ask for them, but we’re in the process of building out a much more beautiful and somecustomer-friendly interface, so that everyone can trackhow their system is performing and how much energy they’re using and how much they’re saving. – Yeah, that’s fantastic. ‘Cause I think it’s probablysomething like your furnace never gave you a report, right? You just have that fuel oil bill once you’re howeveroften they have to come.- And you know, not only that, but it turns out that overhalf of air conditioners are installed incorrectly, so – Yeah, mine.(both laughing). – Usually, somethinglike the refrigerant line isn’t build the properamount or like something and that causes them to underperform. But because we have nomonitoring, no one can see it, and so like the homeowneris basically helpless with actually doing anything about this. I think it’s probably extremely prevalent among heating systems as well. So we’re also just passionate about bringing more transparency to the heating and cooling industry. – Yeah. No, I love that because Nestseems like a very good parallel where, besides us dads out there, the thermostat was prettyneglected part of the household, and now it’s, I mean, I don’tknow it’s just like I love, I mean, Nest did a great job, I feel, of creating a whole product line that integrates really kindof seamlessly into their apps.So I imagine you’ve guys,obviously Google owns Nest and I think they still do, but like there’s probablya lot of that same thinking with your product line, I imagine, right? Like you’re gonnaintegrate with other apps or other services, things like that. – Yeah, and you canimagine that in the future we’ll be able to doreally interesting things. So, just to give a quick example, peak air conditioning loads, they impact the way thegrid is built, right? Like the grid is designedfor that hot summer day. If Dandelion controls alot of the cooling systems that are in use, we can actually make the systemperform more intelligently. So the homeowner doesn’thave to do anything or suffer any discomfort, likethey can set the temperature as they normally would butour system can anticipate, okay, it looks likeit’s gonna be a hot day and the peak load might behigh so let’s sort of pre-cool this part of our system, or we can start to rid them of that work to really alleviate thatpressure on the grid.And this isn’t somethingthat we have today, and it wouldn’t make sensefor us to have it staked, we don’t have enough systems out there for it to make a difference, but we’re designing the systems so that that future is possible and that we can start to operatethese systems as a network that just has positive effectsto the grid as a whole. – So is there an actualsoftware package for the system and you’re able to update that in either wired- That’s right.- Or over-the-air, or something? Wow. Yeah.- Yeah, that’s right. So all the systems are connectedwith a cellular link today, we’re actually about tolaunch Wi-Fi any day now so we’ll have about twomethods of connection where we can update the software, similar to like many company, Tesla does the same thing with their cars. – I woke up this morning andmy car had 5% more range on it than it did yesterday.- Exactly, exactly. – Magic, magic. It is pure magic.(both laughing) So I could see that makesa lot of sense right, and so I’m such a data geek, but it goes back to thatright, like let’s fast forward and you have, I don’t knowthree million households or something using Dandelion, the amount of data you would have would be incredibly valuable to understanding the peakdemand of the grid, right? And so you could probably even partner with local energy companies, not to like give them that data, but to say, like hey look,like let’s work together and make sure thatbecause we have the data on all the households,and what they’re doing.If you give us a sense of like what is happening on your end, we could probably make this more efficient or something, right?- Exactly. – It’s probably lots ofopportunities there to help, I guess, on both sides, the customer and theinfrastructure system. – Right, and in the Northeastagain, about 80-plus percent of the energy used in thehouse, it goes towards heating. So it’s this giant segment ofhow homes are using energy, and so the fact that, like this one, the heat pump is responsiblefor managing that energy, is it really that concentration gives us a lot of opportunitywhen it comes to, for example, smart pricing of technology or, there are lots of opportunitiesto like reward homeowners, for having a system thatactually benefits the grid and not just the homeowner.- Yeah, it a bit reminds me ofhow auto-insurance companies are giving people these little things to plug into their car, to prove that they’re like safe drivers, and by doing so, they get adiscount on their insurance, right? Like I could see a parallel there where you’re like oh well, now that you’re connected with this, we can have kind of a two-way relationship and because of that, it’ll save all of usmoney kind of a thing. – Yeah, and that’ excitingthings we’re seeing is that that’s already started to happen even at this very earlyphase of geothermal.Utilities in New York have already started offeringincentives to homeowners that geothermal systems, because even without anyintelligent communication between systems or anyof that sophistication, the mere act of switching fromtraditional fossil system, to a heat pump is sobeneficial to the grid that the utilities arealready giving rebates and incentives to make it happen. So I think there’s just like an incredible amount of potential there. – That’s amazing. Now, have you looked to partner with, I mean, I guess I’ll just say Tesla, because they’re the only onesI know making home batteries, but I know there are others out there, but have you looked to partner with them because it seems like there would be a reallygood type of setup, right, you have a power walls,maybe two or three, however many you needand you have Dandelion, and so, solar doesn’t always work when the sun’s not out in thewinter, those kind of times, but you have this battery system, so you’re reducing load on the grid and, let’s say there’s apower outage or something, your system totally sustainable, right? I mean, have you looked at partnerships.I mean, I don’t know if you, I don’t know how that would work or if it would just be like,yeah, go ahead and buy them. (both laughing) – I think that is absolutelythe way that things will had. So exactly as you said, if you have a sole solar on your roof, you’re powering your battery, you’re using it to power your heat pump, and your electric car,let’s say like your home, is completely electrified and you’re making a good portion of that electricity yourself, at this stage we haven’tyet partnered with Tesla or any other company with batteries, but we do see that a lotof our customers have solar and we do see that a lot of our customers are interested in electrification. So it’s a natural fit.- Yeah, exactly. I mean, even if you’re notmaking money on the deal, just offering it like hey,let’s get you your heat pump and your geothermal stuff andwe’ll install some batteries at the same time.If it makes sense to do those things, you know sometimes it’s like if you’re gonna redo the floors you may have as well redothis other part of the house or something, right? So I’m curious to see how that goes ’cause yeah, to me that’sjust a perfect fit, especially ’cause thenI mean for energy needs, you’re pretty good,right, other than I guess, if it snows and thesolar panels are covered. Maybe you have heated solarpanels that melt away the snow, I don’t know, it’s sucha foreign concept to me, but I love that idea and Ilove what you guys are doing.So, what’s next on the horizon, what do you have guys have coming up that you want people to know about, or is it all behind closed doors? It’s Google X still.(both laughing) – No, I’d be happy to talk about that. So we’ve just raised our Series A round and one of the things thatwe’re really excited about doing is just taking our drilling technology from the world of R&D,where it’s been living, into operations. So we have this smallerrig that’s less messy, that’s faster, we wanna start using that to install all of our systemsfor homeowners in New York.And that’s really one ofour main focuses this year is rolling that out. So we’re really excited about that. We also, currently, ourfirst heat pump product is specifically for homes with ductwork, so people with forced air heating today, but a lot of people in New York and throughout the Northeast, use other types of heatdistribution systems, – Radiators in the ground.- Radiators, exactly. And so we’re starting towork on the very early stages of developing our next product, to just be able to accommodate more homes than we’re able to serve today. And then lastly, there’sjust a lot of work that we’re focused on tocontinuously improve our offerings. So a simple example is, while there’s been decades of effort put into the different financing options that are available for peoplewho want to go with solar, geothermal is in the very early innings, so we offer a loan that works really well, but we want to be ableto offer more options and give people more opportunities to pay in a way that works well for them.So there’s a lot of projects like that which we’re taking on to just always be making theproduct offering less expensive and easier for homeowners. – Yeah, it must feel good too right, because when you look at all this, the numbers all add up,they all make sense, and then, on top of it,it’s one of those things that it’s benefiting the planet and also in some ways, thedecentralization of these things, taking that load off the grid, I mean, just just all-around good stuff. And do you feel, like I know I was at the boring companyevent launch party a while ago and just hearing these guys talk about it, the engineers from SpaceX that are now working on boring tunnels, they’re just looking at it going like nobody’s done anythingin this space for 100 years.Does it kind of feel thatway on your side too, or coming from Google and Silicon Valley, it’s like hey, why didn’tanyone do this already? – It absolutely feels that way, and I love the way you put it. One of the most expensive parts of installing geothermal today is sticking a hole in your yard, and why is it so expensiveto put a hole in your yard? I think one of the reasons is like what no one hasinnovated on that problem in a very, very long time,and so it’s exciting for me, because it suggests thata little bit of resource applied to that problem might yield very interesting and very fast progress. – Right, it’s the Pareto principle, right? Like there’s this 20%here that you can tackle, which will yield 80% of those results, and people haven’t tackled it. They haven’t actually went after it right, they’ve just said hey, thisis how it’s always worked, let’s just stick with that. Now, to be fair, there probably are companiesout there working on this, but from just my outsider perspective, it seems like a veryripe area of disruption.You know what I mean, it sounds like something that’s.- And of the things we have going for us is that there have been trillionsof dollars put into R&D, for fracking and other types of— The bigger, yeah. – And so one of ourapproaches is really borrowing from those sort of adjacentbut very different sectors. So, like the average pieceof drilling equipment for some of those applications is the size of a city block, right, and we have something tiny that can go in the customers’ yard, but conceptually, someof the breakthroughs that have happened overthere are equally applicable to our use case. And it’s just a matter of translating them in the way that makes sense for the problem that we’re tackling. So it’s nice to be able to rideoff of the tailwinds of that of that dramatic technology expansion. – I do wonder too, ifthere’s something about that, why it’s actuallyexpensive and difficult now is because it wasn’t designedwith that intent at all, right?- Yeah.- Like, oh, we know how to drill a hole, but it’s usually in an oil field where we have this giant system. To do it in your house is like oh man, how are we gonna fit this in there versus kind of the Teslafirst principles approach of like okay, so what we’re trying to do, let’s just break it downto the simplest form and figure out how to achieve it, ignoring how people havebeen doing it for a while and then look at other areasto glean learnings from that seems like.- Yeah, you’re definitely right. And the technology that’s used in the past for geothermal wells iswater-well technology. So people are essentially usingwater-well digging equipment to put in a geothermalloop but, as you said, that’s not gonna be the best way to do it.It’s just like the onlyway that people have had. – Yeah, well that’s fantastic. I am really excited for you Kathy, and I wish you guys all the best and where can people find more info, just That’s the best place. – Fantastic, and next timewe’ll have a new office setup, I understand, there’s someconstruction going on there. So maybe, when I’m out in NewYork, I’ll come have a tour. Are you guys in Manhattan itself? – We are yeah, we’re rightnext to Grand Central Station.- Oh yeah, perfect, cool. I do come out there once ayear at least, sometimes twice, but I end up in Brooklyn and it’s always like, Iwant to go to Manhattan, but it’s difficult to get there and back but I’ll let you know next time I’m out ’cause I’d love to come see and just hang with youguys for a little bit. – Yeah, it’d be great to host you. – Cool, all right well,hey thanks for joining me.Everyone check out and let me know what you guys think. If you have other questions, leave them in the comments down below. I will do my best to pointyou to the resources I have, and maybe we could convinceKathy or someone on her team to chime in some commentsand answers there if you have somequestions, so thanks again. – Thank you, great to be with you. – Yeah.(upbeat music) Hey, thanks for watching the video. If you like data, want to learn more, maybe even make a career out of it, I have a free course to help you kickstart yourdata professional career, it’s a part of the FTD Academy, the Free The Data Academyand it’s free to you.You can go check it out, learn more and sign up at (upbeat music).

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