Our investment in Electric Air: Tesla for Heat Pumps
Electric Air building a residential heat pump system. It promises to be an all-electric replacement for your home's furnace and air conditioning.
Note: Attack Capital is an investor in Electric Air through our Demo Day Fund.
TL;DR: If you only have a couple of minutes.
Space heating is 50% of the average homeowner’s energy consumption and makes up 10% of overall US energy use.
Although heat pumps use energy (electricity), they are much more efficient than natural gas furnace heat pumps, using ~1 kilowatt of energy to get around 2.5 -3 Kilowatt of heating.
In 2021 heat pump sales increased by more than 13% globally. In the European Union, sales grew by around 35% year-on-year, similarly in the United States (up 15%), Japan (up 13%), and China (up 13%).
The United States also recognized the importance of heat pump adoption, the recently passed Inflation Reduction Act contains $4.3B in heat pump rebates for low and middle-income families and a $2000 tax credit that applies to everyone.
I wanted to approach home heating and cooling from a product design approach, improve the end-to-end experience for homeowners and make a product that was compelling beyond its climate motivations
Chris Mui, Founder of Electric Air
When Chris Mui, the founder of Electric Air, told his story on Hacker News, the forum couldn’t stop talking about it, the story quickly reached the #1 spot, and it had 779 comments in a single day. If he weren’t already getting investors' interest from left and right, this would do the job.
Electric Air is a company in Y Combinator’s W23 batch which is building a residential heat pump system. Electric Air promises to be an all-electric replacement for your home's furnace and air conditioning.
The company promises (i) more centrally ducted installs, (ii) manage your indoor air quality, and (iii) save you money on monthly bills. To remove any roadblocks in between, they streamline purchase, finance, and installation by selling directly to homeowners.
EFFICIENT HEAT PUMPS - A NEED OF THE HOUR
Space heating is 50% of the average homeowner’s energy consumption and makes up 10% of overall US energy use. Although heat pumps use energy, they are much more efficient, using ~1 kilowatt of energy to get around 2.5 -3 Kilowatt of heating. In the case of coal or other fossil fuel, the number is close to 1 kilowatt to generate ~1 kilowatt of heating power.
Other energy systems like coal and natural gas furnaces heat their surroundings by burning fuel. But heat pumps simply take already existing energy molecules from their surroundings and move them around. If you want to heat your room, heat pumps will move heat from outside your building to inside by using very little energy.
NUTS AND BOLTS OF HEAT PUMPS
Heat pumps use refrigerant and a compressor to move energy against a temperature gradient. The low-pressure refrigerant in the outdoor heat exchanger is colder than the outdoor air, so it has to absorb energy.
After the compressor, the refrigerant in the indoor heat exchanger is hotter than the indoor air, and energy flows into your home. This happens in a continuous cycle. Heat pumps can easily be converted into air conditioners according to the need because they have a reversing valve that allows the flow of refrigerant to be flipped.
CAUGHT IN A TAILWIND
Heat pumps are increasingly recognized as a critical technology for heat decarbonization, receiving increasing policy support in several countries over the last few years. The United States also recognized the importance of heat pump adoption, the recently passed Inflation Reduction Act contains $4.3B in heat pump rebates for low and middle-income families and a $2000 tax credit that applies to everyone.
Even though Electric Air is currently focused on the US, the global outlook is also extremely positive. In 2021 heat pump sales increased by more than 13% globally. In the European Union, of which the largest markets are France, Italy, and Germany, sales grew by around 35% year-on-year, exceeding 2.2 million units. The next most dynamic markets were the United States (up 15%), Japan (up 13%), and China (up 13% for air-source heat pumps).
THE RIGHT MAN FOR THE JOB
Chris comes with almost a decade-long experience in thermal energy. He has worked with some of the finest companies that are top of their engineering and industrial design game - experiences that would come in handy while building Electric Air. He has worked for companies like Tesla, where he worked on Model 3 and Semi Truck, Zoox (Amazon’s autonomous car division), and Plenty (A Vertical farming startup backed by SoftBank Vision Fund).
Chris has also worked with Space System Loral (SS/L) straight out of college as a Mechanical Systems Engineer and moved up to Thermal R&D Engineer. He holds an undergraduate degree in Mechanical Engineering and a Master's degree in Aerospace Engineering both from Cornell.
FULL STACK MODEL
Electric Air aims to reduce emissions by replacing one of the biggest emission sources - residential heating and cooling, but there are other arguments for its existence. In his words, integrating thermostats, heat pump equipment, and air quality systems is terrible. He wants to approach the current problems from a product design approach to improve the homeowner experience. Currently, the products also don’t work well together, and the best thermostats are not fully compatible with inverter-driven heat pumps.
Electric Air’s thermostat algorithm also combines demand response with weather and time-of-use rate plans to reduce monthly utility bills through pre-cooling and preheating. Unlike the product of its competitors, the thermostat will be able to run the heat pump in variable speed mode. They will also come with PM2.5 and CO2 sensors and an air quality module on the air handler that controls HEPA filtration, fresh air intake, and modification of the home’s humidity. Moving one step further, Chris is also focusing on improving the process of getting a heat pump - finding a trustworthy contractor, sorting out financing, and wading through rebates.
With Electric Air, Chris is aiming to re-design the whole system for the better, Electric Air would provide the building with a thermostat as well as heat pump equipment (air handler and condenser) and a contractor web app - making Electric Air first company taking a full-stack approach residential heating and cooling. But with more power comes more responsibility, and going by Chris's incredible pedigree and decade-long experience, you can’t get a better person to do this job.
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