Startup Series: Helio
Today's guest is Eric Reinhardt, CEO and co-founder of Helio, which makes it simple for customers to transition off fossil fuels and fully electrify their homes.
The home electrification process in most of the U.S. is not a seamless experience. Homeowners approach electrification with different needs. Some have to upgrade broken equipment, whereas others opt for a total rehab. But having to piece together a variety of seemingly related projects requires working with multiple contractors, contracts, and challenges that could limit widespread adoption. Helio is making a bet that there is a growing segment of homeowners who are motivated to electrify the whole stack of their homes, from rooftop solar and HVAC to water heaters, EV chargers, and more. The company aims to provide customers with a roadmap for achieving that while also doing the actual installation work.
Given all of the tax credits and rebates coming online for home electrification as part of the Inflation Reduction Act and other local programs, more homeowners will likely be looking at this problem. And with a third of emissions coming from residential buildings, Helio’s solution could make a significant dent in their goal of electrifying millions of homes. Their roadmap solution educates homeowners and helps them plan for the amount of power they’ll need as they pursue home improvement projects.
In this episode, Eric and Cody have a great chat about his background as well as his co-founders, what he's learned from customer interest thus far, how they can provide home estimates at scale, and how he sees Helio growing in the future. We're honored that our venture fund at MCJ Collective is an investor in Helio, and I hope you enjoy the conversation.
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*You can also reach us via email at info@mcjcollective.com, where we encourage you to share your feedback on episodes and suggestions for future topics or guests.
Episode recorded on October 7, 2022.
In this episode, we cover:
[3:39] Eric's background at Sunrun and personal electrification journey
[7:08] How he met Helio's co-founders and started the company
[9:56] The home electrification process today and Helio's net zero roadmap solution
[13:56] Need for customer education
[16:41] The risk for contractors to take on new technology like heat pumps
[19:41] Helio's estimating process and accurate design
[23:22] An overview of ducted vs ductless or mini split systems
[28:21] Helio's customer experience and how they manage handoffs with contractors
[31:57] Financing projects and Helio's vision of moving to a subscription model
[35:02] Role of insulation and sealing
[40:54] Job opportunities at Helio and how to apply
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Jason Jacobs (00:01):
Hello everyone, this is Jason Jacobs.
Cody Simms (00:04):
And I'm Cody Simms
Jason Jacobs (00:05):
And welcome to My Climate Journey. This show is a growing body of knowledge focused on climate change and potential solutions.
Cody Simms (00:15):
In this podcast, we traverse disciplines, industries, and opinions to better understand and make sense of the formidable problem of climate change and all the ways people like you and I can help.
Jason Jacobs (00:26):
We appreciate you tuning in, sharing this episode, and if you feel like it, leaving us a review to help more people find out about us so they can figure out where they fit in addressing the problem of climate change.
Cody Simms (00:40):
Today's guest is Eric Reinhardt, CEO and co-founder of Helio, which makes it simple for customers to transition off of fossil fuels and fully electrify their homes. Helio's making a bet that there's a growing segment of homeowners who are motivated to electrify the whole stack of their homes, from rooftop solar to HVAC to water heater to EV charger and more. Helio aims to provide them with a roadmap for achieving that while also doing the actual installation work for them. I personally have gone through the home electrification process over the last few years, but I didn't have Helio charting the way. I first did rooftop solar, then a heat pump water heater out of necessity when my water heater died. Then heat pump HVAC. I still have a few things left to do, including our gas stove top and a few appliances, and we haven't added an EV to our home yet.
(01:27):
And I clearly did all this backwards. I honestly have no idea if the solar panels we installed at the start of the process are the right size for our current energy to load now that we've got other major electrical appliances. And I wasn't even thinking about major home electrification when I did our solar panel project, nor do I know if our current panel would be able to power a future EV or cooking range.
(01:48):
Now, I'm an early adopter here, but with all the tax credits and rebates coming online for home electrification as part of the Inflation Reduction Act and as part of local programs, I'm guessing that more and more people are going to be looking at this problem. Helio will need to get great at taking a customer interested in one piece of the puzzle like me when our gas hot water heater died and I needed a new water heater right away and helping them solve their short term pain while also providing a roadmap for the bigger picture of whole home electrification.
(02:22):
Eric and I have a great chat about the backgrounds that he and his co-founder bring to the problem, what he's learned from customer interest thus far, how they can provide home estimates at scale, and how he sees the business growing. We're honored that our venture fund at M J Collective is an investor in Helio, and I hope you enjoy the conversation that Eric and I have about the business he's building. Eric, welcome to the show.
Eric Reinhardt (02:42):
Hi, Cody. Thanks for having me.
Cody Simms (02:44):
So people who've listened to a few of these with me on anything to do with home electrification, know that I'm kind of a nerd about this stuff and that I've actually done a decent amount of work on my own home in this way, but Helio wasn't around when I did my own work. So yeah.
Eric Reinhardt (02:57):
I'm sorry about that.
Cody Simms (02:59):
So I've been obviously following your journey from close to the beginning, MCJ Collective, we're investors in Helio, so we're obviously excited about what you're doing. But what I want to do is just start at the top. You've been working in this space for a long time. Your co-founders have been working in this space for a long time. You're not some outsiders coming in to disrupt it with sort of crazy new shenanigan ideas like you see how it needs to change. Maybe walk us through your background at Sunrun and other experiences you have in the space as well as those of your teammates and how you ultimately came to focus on the business that is Helio.
Eric Reinhardt (03:39):
Yeah, so I spent seven plus years at Sunrun leading their software product management function, and I got to see Sunrun go from 200 people to I think 5,000 people when I left. So I got to experience building a platform to one, scale the company, but also enable the customer experience. For me, my personal electrification journey came from talking to customers, speaking to customers at Sunrun, talking about what their experience was like. Something that kept coming up was just how good it felt to run their life off the sun. And that's something Sunrun leaned into in terms of marketing. And I understand that feeling, having that feeling that your house is running off of clean energy. But I started to get customers coming back to us asking, "Hey, how can I keep going? I want to complete that journey to really run my life off the sun. How do I get rid of fossil fuels, how to heat and cool my home with electricity?"
(04:38):
That sent me down a personal path of trying to understand, is this a thing? Where's this going? And I became convinced that just like electric vehicles, that homes are going to become electric. That's where this is going. It's an inevitable transition. I'm a product person. So I started to lean into, okay, what's that experience like to go electric? How do you actually get from where you are today to a fully net zero healthy electric home? I interviewed 20 or 30 people who electrified their home and got similar stories. They had to manage five plus contractors. No one wants to manage one. And that design was super opaque and difficult. All these products were installing in your home interact with each other.
Cody Simms (05:23):
When you say that they were electrifying their home, you don't mean, Oh, they did solar. Oh, they did a heat pump. You mean their goal was to remove fossil fuels from their home? So they were exactly looking to do a whole home electrification.
Eric Reinhardt (05:35):
They were looking to go all the way, and the effort they put in to get there was amazing. I mean, I saw some 10 tab spreadsheets trying to design the right system for their home. I think you, Cody. May have experienced that trying to just understand, am I sizing things correctly? What is my heating load? Do I have a big enough solar system to power this all? That's really where peaked my curiosity of that, hey, maybe this is something I can solve.
Cody Simms (06:02):
You give me way too much credit. I approached each of the projects totally independently of each other, which is why I wish that Helio had been around when I did the work. So anyway, we'll get into what you're doing to help with that problem. But no, you give me way too much credit.
Eric Reinhardt (06:17):
I think you gave me a spreadsheet that was pretty complicated. Well, at least we can say that, right? No, and that's really where I felt as a product person, I could take the friction out of this experience. I think that's a key point about climate tech is that there's a great technologies, there's things that work today, but that the experience isn't there. And that's really what I wanted to bring to this is to make it easy. What's the one click experience to electrify your home? And that's really what I brought to this.
Cody Simms (06:47):
Then how did you meet your co-founders? And they'd been working in this space too, so maybe walk through their experience, though they came at it from a more, hands on is not the right word, but they were building stuff. They were much more hands on in the home.
Eric Reinhardt (07:00):
Much more hands on.
Cody Simms (07:01):
Whereas you were building system level change. So I'm curious to hear how you met Clay and Bill and what that journey has looked like.
Eric Reinhardt (07:08):
And that came from looking honestly at my background is about strategy and software and customer experience. I had no idea how to actually electrify a home or size a heat pump properly or do a heating and cooling load for a house. Also, I think one of the reasons a company like ours hasn't existed yet is because people are terrified of the complexity of the residential space. Each home is different. How do you handle that? So I felt I really needed to figure that out. And luckily we have a really good resource here in Colorado called RMI. And I called RMI who had written many interesting articles about electrification, started interacting with them and they connected me with Clay Dusel, who had actually tried to start an electrification company on his own in Boulder and had electrified a few homes, but didn't have the full package to keep that business going and probably was a little early.
(08:03):
So there was an early attempt to try to figure this out. So we got together and started talking, got very excited about combining our expertise in. Then the third leg of the stool, so to speak, is Bill Lucas Brown, who is a building scientist. So he has extensive experience in how to model homes, how to figure out the right load for each home, how insulation affects a home, how air ceiling affects a home, how opening your window affects your home. Those kind of details that we were missing he brought. And so together we felt like we had the right expertise at the table. Me with software, Clay, with home improvement experience, and Bill with building science and together we've brought that into a full experience for a customer so that we can provide a platform that electrifies their home.
Cody Simms (08:52):
Obviously the Holy Grail customer for you is someone who's already made the decision that I want to go all in on electrification. That's not how most products are sold to consumers today as I understand it. And most people make these major home purchases, I would say out of necessity, not out of luxury. Their water heater dies or their HVAC is all of a sudden they're getting told that there's carbon monoxide coming out of it and they got to deal with it. Or they have a rat infestation in their attic, so they need to reinsulate their attic. That's how I understand it. There are a few of us climate nerds out there who are saying, I want to get rid of fossil fuels in my house. But that's increasingly growing, but still probably a sweet spot customer for you. What does today's process at the individual component part level of electrification look like today? Whether it's solar, whether it's heat pump, HVAC or just HVAC in general, whether it's water heaters, whether it's insulation and ceiling, what do those sales processes look like as point solutions right now?
Eric Reinhardt (09:56):
Well I think that was an assumption going in is are we going to do one thing at a time for customers? Is that how we find them? Do we find customers at the moment that something breaks? I think that's something that has made people... It's been a challenge in the space as people have thought of it in that way and thought, how can you build a business where you're just happened to be there the second something breaks? That's really the HVAC industry is built off that emergency phone call. A lot of HVAC companies start with the letter A, right? People are looking in the yellow pages and saying, "Something's just broke, please come over." So we thought we'd challenged that assumption. And what we do is, our product, is we offer a full net zero roadmap. So we do get customers calling us saying, "My house is uncomfortable, I don't know what to do, I just want it to be more comfortable to live in."
(10:50):
Or they call us saying, "My hot water heater just broke." Or they call us saying, "I'm really interested in solar." Or this is happening more frequently now is, "I just bought an EV and I need to wire my garage for an EV charger." So whatever they may be interested in, we provide them a net zero roadmap. There's a couple reasons we do that. One is we have to design all these things together to make the optimal roadmap for the customer. So if we design their hot water heater as a standalone solution, we may then be unaware of where their main panel load is and then might not understand exactly how we need to address that home holistically to enable solar in the future. So we approached it from a holistic way and we've been pleasantly surprised that more than half our customers are just blown away. They didn't think this existed. They get very excited that there's a path to net zero. And we've seen, like I said, over half say, "Let's just do this. I want to get off fossil fuels. I love this idea. I love the idea of having a more comfortable healthy home." And if the patient's on the table, let's just do all the surgery at once.
(12:03):
Then about the other half, our point solutions where they come to us saying, "I just need a hot water heater right now." And we give them the net zero roadmap, we replace the hot water heater. Then the beauty of that is they have a plan. So when they're ready for the next step, they just call us up. We don't really need to do any further work other than scheduling whatever they're ready for next and we come in and fix it or adjust it.
(12:27):
So that's been working really well, and I think there's a tendency in the clean tech space, and I think this comes from utility perspective, that everything is about savings. How much is the customer saving? That's something I learned at Sunrun is that we leaned into savings heavily in the beginning and that wasn't necessarily the number one reason a customer was deciding to go solar.
(12:53):
Also, these things aren't generating massive savings for everybody. Saving 40 bucks a year isn't the main driver while someone wants to do this. And this is your home, this is where you live, this is where you spend 90% of your time, especially post Covid. And people want to invest in where they live. So it's not all about, "How much am I going to save?" You're investing in a home that's healthier. You're investing in a home that's better for the environment, you're investing in a home that's more efficient and you're investing in a home that's more comfortable. That decision isn't necessarily about the dollars and cents of, "Am I saving 40 or 50 bucks a year?" Right?
Cody Simms (13:32):
Though I assume people are finding you already are motivated in electrification in some way shape or form. Or are you getting calls from people who are needing help deciding between, "Should I do a heat pump or should I just install a new gas furnace?" I'm curious how much education is still involved in the kinds of folks that are finding their way to you today.
Eric Reinhardt (13:56):
I think when we first started, we were tapping into this latent demand where there's a bunch of clean tech nerds, let's call them these engineering types, who had been searching for this solution for a couple years, had probably spoken to 10 HVAC professionals and felt completely frustrated and turned off and unsure if there was someone who could actually do this for them. So I think probably the first 30, 40 customers were just people just who were already looking for this and called us up and said, "Wow, you exist. I've been waiting for this." We're now getting into, I think especially with rebates, activating the market. We started here in Colorado in Denver, had some pretty attractive rebates and that really pushed us out of these early adopters into people who are less educated on this. So we see ourselves as the guides, as the educators.
(14:47):
We're here to show you what's possible. I think there's a lot of people who assume you can't do it. When we walk into a home, people are assuming, "Hey, I'll have neat gas still, right?" That's a common question we get. And the answer is no. I mean, we've done over 90 plus homes here in Denver and we've probably done backup on only a couple, on only a handful. Those are very unique, probably massive homes and otherwise we can get there with heat pumps. Part of what we do is being very precise about our design so that we ourselves have full confidence that that home is going to be comfortable year round, but also so we can explain that to a customer and take away the fear. I mean it's sort of range anxiety with EVs, right? We are taking away the anxiety that you're going to wake up on December 30th with a cold home, and we're confident you aren't. And we help people understand that.
Cody Simms (15:42):
I'm wondering how particularly as the federal rebates start to kick in through the Inflation Reduction Acts around a lot of these areas, the extension of solar tax credits, the massive increase in credits for heat pump installation, et cetera. How much will existing technicians lean more into these solutions in their own swim lanes? So I did solar first, but then the first electric appliance I bought was my water heater because my water heater actually died. And I remember I called five plumbers, and they were actively selling against electric. They were saying electric doesn't work. You want gas. I'll get a gas tankless heater out there for you tomorrow, or this afternoon even. And we didn't have hot water in the house. It was pretty urgent to get it in. I have to imagine that we'll start to change. But what most likely aren't going to be able to do is again, to give you that holistic view of how all these systems talk to each other in terms of energy load. Is that correct?
Eric Reinhardt (16:41):
Yeah, and if you put yourself in the shoes of contractors, they're often small, smaller shops. I think 70% of the trades is mom and pop shops that are five to 10 people. For them to take on new technology is incredibly risky. Imagine you're very skilled at installing a gas water heater or a gas furnace, you understand the reliability of that equipment, you understand your capability with it, the idea of trying to install something else and having people call and be unhappy or call with issues, that's something that's really challenging for them.
(17:20):
So really if you put yourself in their shoes, they really have very little motivation to adopt anything new. That's why people get frustrated because they're asking for heat pumps and the trades are saying, "Just do a furnace, it works great. I can put this thing in. It'll last 20 years. You should do that." And I'm not saying they're, they're not acting, not necessarily in their best interest, they're just acting with, "Hey, you want something reliable to keep your home warm? I have that. Let's do that." Right? And I think that's why we need to exist because the beauty of a furnace is that it's so powerful. So you do not need to be accurate with your heating and cooling load. Most furnaces are oversized, that's why they are so loud and they pump tons of heat in.
Cody Simms (18:07):
Ours was way oversized. We almost halved the capacity when we moved to a heat pump in terms of the unit that we have in our home now.
Eric Reinhardt (18:15):
And that's a super common story and that's why HVAC professionals do it. They know you're not going to call them in the middle of winter because that furnace can handle you leaving your windows open and your doors open probably, right? With a heat pump, it's much more precise. We do not have the power of just burning a ton of gas to make up for your heating load. We have to be precise with the equipment and that takes more technology, that takes more effort and that takes more risk. And we're taking that on because we feel we have that sophistication to design correctly. Then we're using contractors behind us to do the work because they're skilled at the work, but we're taking the risk on for them and we're taking that added burden of dealing with customers and selling these type of products off their plate so they can do what they're best at, which is installing and commissioning this equipment.
Cody Simms (19:06):
That's a good transition. Let's talk about what the estimating process looks like for you guys. You're a product person. You came from Sunrun. I presume it doesn't scale to have people showing up in every home that wants to consider this work to do an attic crawl and do all the stuff you need to do to determine what needs to go into a home. So how are you extremely accurate, as you just said you were, but also able to scale this into more than just a Denver metro area, small business electrification company?
Eric Reinhardt (19:41):
And that's where technology comes in. What we can do is we can take an address and we can pull in publicly available data about that home. So think of square footage, how many stories, how that home is oriented, what kind of space that home has for solar. We can even look at permit data and understand the historical permits been pulled around that home. We can also look up what that existing equipment is. Is it a central ducted system? Is it gas furnace, et cetera. So we can actually learn a ton about the home and we can plug that into our energy model and build out a pretty accurate estimate of what their heating and cooling load is. From there, and this is where it gets similar to solar, right? Solar can use remote satellite data to design remotely and give a homeowner a really good idea of the design and the return ongoing solar before they come visit the house.
(20:37):
So we can do the same. It's a little more complicated for us because we're designing everything, but we're coming back to the customer to say, "This is what we think you're heating and cooling load, this is what we think your electrical load is today. This is what your electrical load will be tomorrow. This is generally how we could size everything in the cost." And so we're giving them that experience right away so that they can understand what their roadmap looks like, what their payment might look like, and what the value of doing this looks like.
(21:07):
That way we get to one, make sure they're interested and qualify them, but also make sure that they're bought in and it's worth it for us to visit the home. We do do a home assessment on every home. That's really to true up our energy model, but also just to make sure, where's equipment going to go? Can it fit? Are we going to have to take a door off? Are there going to be scope of work items we didn't see remotely? And that will then allow us to just come back to the customer with a final proposal that takes into account any complexity we may have uncovered in the home, and then we're ready to go.
Cody Simms (21:41):
Yeah, I mean for me it was little things that were annoying because of how code or permitting had changed. We were reinstalling as part of our work and had to change the light boxes in our home because the light boxes we had were no longer up to code as an example. That wasn't cheap. That was a few thousand bucks. So I'm sure you run into little things like that once you're actually inside the home that you find.
Eric Reinhardt (22:05):
Yeah, exactly. And sometimes it's something as challenging as we have no path to get this equipment from your front door into your mechanical room. So we have to change our assumptions. Or the complexity of, "Hey, we're putting a condensing unit outside, how do you find a path from there into your mechanical room?" That can be challenging. And that's what we're working on as well, is figuring out heuristics for understanding that complexity quickly and finding the right solutions and standardizing those solutions. Because yes, every house is different, but these challenges aren't necessarily different. So we're trying to figure out through software how to categorize those and how to design for those so that we can scale that decision making.
Cody Simms (22:46):
It seems like, at least to me, one of the big variables on cost, you can kind of understand general electrical load, if they're going to do solar, generally how much they're going to need. If you have data on their existing panel, is it the right size? But the big cost factor to me is, I think on the heat pump side, is ducted versus ductless. And if ducted, does the duct work. They have work like that to me is an order of magnitude cost difference. How do you factor that? Maybe actually explain ducted versus ductless [inaudible 00:23:19] who aren't as deeply nerded out about this as you and I are?
Eric Reinhardt (23:22):
Yes. Thanks for reminding me. So I think let's start with the easiest one, which is a ducted system. So this is the most likely system homes have, which is you have a furnace in your mechanical room that burns natural gas to heat up air that gets pushed through the air handler in your furnace into ducts that take it to the rest of your home. That's the most straightforward replacement for us. We're adding a condensing unit outside to gather the either hot air or cool air to bring it into the mechanical room where we replace your furnace with a air handler that then pushes that air throughout your house through the ducts. So you can imagine that scenario, it's pretty straightforward. You're putting something outside and you're swapping out the furnace and then you're utilizing the existing ducts. Sometimes you encounter homes where they have a boiler that's heating up radiators in homes or they have electric baseboard or they have radiant floor heating where there are no ducts.
(24:20):
In that scenario, we can't utilize it in existing duct system. So we do what we call ductless, or if you understand the products that are sold, they're are often called mini splits. So we then put those throughout the house, and each unit then resides in a room. It's either mounted on a wall or in a ceiling or sometimes on the floor, and that acts as its own air handler. It gets routed from there through your house to the condensing unit outside, and therefore you then get individual room control of your heating and cooling. It is more expensive because each head costs money. So that is more expensive than essentially ducted system, but you get zone control. So oftentimes people are attracted to that solution because it may solve a comfort issue that has really bothered them in their home and that allows us to give us that precision throughout the home so that we can dial up and down rooms as needed for the house.
Cody Simms (25:19):
Great. So helpful explanation. Now when you're pricing a project, I assume a lot of customers, some have done their homework, but a lot of them don't even know this distinction yet. That'll change over time. But how are you helping them understand that when you're giving them a price scope?
Eric Reinhardt (25:37):
Yeah, and that's part of why we can build the model up front is because we usually understand if they have a centrally deducted or a ductless system in their home. So in that initial phone call, we are planting the seed about what the solution is going to look like and getting them prepared that, hey, if you're dealing with a boiler radiant heat system, that we're going to come in and probably do mini splits. That way we're also setting expectations about that additional pricing that's involved there. Then in the home when we do our home assessment, we're then visually showing with augmented reality to the customer, "Hey, this head is going to sit here, does that look right? Are you okay with that?" Right. So we're getting buy in on the aesthetics because that's super important to people. And also buy in whether they want it, like I said, in the ceiling or whether they're okay with it on the wall. Sometimes we can't do the ceiling because of the way the rafters are set, but we were able to make those decisions with them in the home pretty quickly.
Cody Simms (26:33):
We're going to take a short break right now so our partner Yin can share more about the MCJ membership option.
Yin Lu (26:40):
Hey folks, Yin here, a partner at MCJ Collective. Want to take a quick minute to tell you about our MCJ membership community, which was born out of a collective thirst for peer-to-peer learning and doing that goes beyond just listening to the podcast. We started in 2019, and have since then grown to 2000 members globally. Each week we're inspired by people who join with different backgrounds and perspectives. And while those perspectives are different, what we all share in common is a deep curiosity to learn and bias to action around ways to accelerate solutions to climate change.
(27:09):
Some awesome initiatives have come out of the community. A number of founding teams have met. Nonprofits have been established, A bunch of hiring has been done. Many early stage investments have been made as well as ongoing events and programming like monthly women in climate meetups, idea jam sessions for early stage founders, climate book club, art workshops and more. So whether you've been in climate for a while or just embarking on your journey, having a community to support you is important. If you want to learn more, head over to mcjcollective.com and then click on the members tab at the top. Thanks and enjoy the rest of the show.
Cody Simms (27:42):
All right, back to the show. And then you mentioned how you work with the contractors who do the actual work. Where does Helio's team begin and end in terms of the central team that's building out the software that can do some of this initial sort of remote assessment versus the people who are walking in your front door and closing the sale with you versus the people who are actually doing the installation work in the home and ultimately responsible for the quality of the work and it getting properly permitted by local permitting agencies? Where do the handoffs exist for you and how do you manage quality across those handoffs?
Eric Reinhardt (28:21):
Those are difficult questions, Cody. No, so I mean what's really important to us is that we own the customer experience. So we are responsible for the design. We are responsible for the scope of work. We are responsible for ordering the equipment and permitting. So all of that we want to own because we don't want that to be different on every project. We then are bringing in our contractors and we are prepping them ahead of time. We're defining the project in a language they can understand and the visuals they need so they know what they're going to be doing. These guys skilled, they know what they're doing, they know how to install this stuff. So we're trusting that they're able to do this at the level we need. When they get to the home, we do a walkthrough with them. Essentially we play quarterback with all the contractors so that everyone understands how to work together.
(29:13):
You can imagine that if the electrician needs to drill holes to run lines and the HVAC professional needs to drill holes and runs line sets, that we need to coordinate that interaction so that they're not butting heads on the job. So that's really what we're doing is we're defining what happens, we're defining when it happens and with what equipment, and then we are coordinating that install on site. In that way we can ensure that it's a great customer experience and then ensure that the contractors work together to deliver good work. And then of course at the end, they have to meet our standards. They have to hit the checklist to make sure they've done things in the way we wanted them to, and that it's done to the standard that is needed for the customer.
Cody Simms (29:55):
Then this is expensive work. I don't know what the average project size is here, but I'm assuming you're talking $20,000 or more, significantly more if you're also doing solar. How are people paying for this, and what is your involvement in that other than saying, "Hey, here's how much this is going to cost you,"?
Eric Reinhardt (30:12):
Right. I mean they pay us and we define the contract. They sign the contract and they pay us and then we coordinate the contractors behind us. And you're right, it is expensive. But Teslas are expensive too. People are willing to put down significant money for this. Also, we make people aware they're going to have an inevitable change that's going to happen in their home. Your furnace is not going to last forever. Your hot water heater is not going to last forever. Many people haven't thought about the age of their equipment before they speak to us. So we're often coming in the home and saying, "Your hot water heater is 18 years old. We're not saying it's going to die tomorrow. We don't want to scare you. But it is reaching its end of life. You would eventually have to replace this." So that should be thought of when you evaluate these costs.
(30:59):
Also you're investing in your home. Like I said, it's just like redoing your kitchen or repainting your house. You're making it a better house that is more valuable. If an all electric home that looked the exact same as an all gas home or side by side, people would pay more for the all electric home. It's healthier. It's better for the environment, it's more efficient. It's all those things, and so you're investing in your home. And I think people understand that. Now that they're spending so much time, especially with Covid working from home, they're hearing that furnace blast. I can't tell you how many times we've gone to a home and someone's opened a door and said, "Oh, we don't go into this room, it's freezing." And we're basically giving that room back to someone. So I think there's a lot more value in what they're paying than people realize once we kind of paint that picture for them.
Cody Simms (31:50):
How are most people financing the work today? Do you have a sense of what that looks like and is that an area that Helio wants to get into?
Eric Reinhardt (31:57):
Yeah, so I think so far we've been lucky that our early adopters either tend to have money or a lot of people have equity in their home. Their home values have skyrocketed, so that's allowed them to take on home improvement projects. We also have a couple credit unions here in Colorado that have great financing options. So we're probably financing 10% of our customers right now. But our vision really is to move into a subscription model. I think that's the way we get to scale here. And like I said, our goal is to make this one click. And to do that, we need to make the payments super easy.
(32:32):
So our goal instead of offering, "Hey, pay 50% upfront, pay 50% at completion," that we take a look at your energy bill and we say, "What if your energy bill stayed the same but you paid us and your whole home was electric? Would you be open to that?" And you can imagine the sales process being so much easier, the ability for people to pay that's so much easier. We then take care of their home. We can manage and orchestrate the energy in their home so that they interact with their utility and take advantage of time of use, take advantage of demand response so that their home is being optimized on a daily basis and they're paying that same monthly fee that you inevitably pay to the utility for the rest of your life anyway. Right?
Cody Simms (33:14):
Today you're in Colorado, you have I think, ambitions to be a national brand in terms of doing this. What does that look like for Helio?
Eric Reinhardt (33:23):
Yeah, we absolutely want to move outside of Colorado. What's great is that Colorado's a challenging market and that is very hot and very cold here. So we have to be really good about our design, about our equipment, about our process. So I think it's been advantageous for us to start here and refine those, get our technology right, get our process right, and then use that to go to other states. California I think is a great market. There's 13 million homes. It's much more temperate climate. It's all those things. So each region of the US will be challenging in different ways, but there are more attractive markets out there for us. There's a hundred million homes in the US that would benefit from electrification. And we are building a platform so that we can go after all those homes. Our goal as a company is to make a massive impact on climate change. A third of emissions come from residential buildings and we want to build a platform that makes it easy for all those a hundred million homes to electrify and make a significant dent. How many fossil fuels, how many tons of fossil fuels are burned every day?
Cody Simms (34:29):
Eric, two things that we actually haven't talked about, which are on the almost polar opposite side of the technology spectrum, but that I think are important pieces of the home electrification journey. One is sealing and insulation, which is as low tech as you can get, and I think often gets left out of the conversation. And the other is battery storage, which is about as high tech as you can get and haven't heard you talk about battery and what the attachment rates of battery look like in projects that you're doing these days. Definitely want you to touch on both of those just to make sure we've covered the bases here.
Eric Reinhardt (35:02):
Right. No, insulation, air ceiling is super important for a couple reasons. One is it's the solution to your comfort issues. Oftentimes people don't understand why their basement's colder or why the room on top of their house is so hot. That oftentimes has to do with the way their house has been insulated and how it well sealed it is. And just a little education is that in the past, people thought that it was good that your house breathed. So if you go into your basement, you may see a window down there, a little square cut out so that air can come in and out. Or if you go into your attic, you may see similar things and that's what people thought was good.
(35:42):
However, that completely negates a lot of the insulation in your home. It's basically like having a window open. So we've seen people who have spent thousands and dollars on R60 in their attic and they still have that little window out there. And that's again, negating the return on investment of that. So what we're doing is just taking care of low hanging fruit. We're giving direction on what should be sealed and why, and then we're putting insulation in the attic and insulation in the basement where appropriate.
(36:12):
Oftentimes that has a 20 or 30% impact on your energy usage and it's pretty consistent. You can hang your hat on that. And that helps with the comfort issues, that helps with efficiency. Then also, as I mentioned before, we're taking out that furnace that can just burn a ton of natural gas to keep up and we're putting in a much smaller heat pump unit. So being able to reduce your energy loads, your heating and cooling loads so that we can put in smaller, more efficient equipment is the right move long term. So that's how we approach it.
(36:45):
We're also, with our software, able to make the right trade off for a customer. Sometimes it takes a ton of investment on the insulation side to make a dent on your heating load and we'll make that decision for you that, hey, maybe we could just go up a size on your heat pump and we can take care of it that way, or we make the right decision is to insulate and air seal more here so that we can drop down to a more efficient unit. So that's super important.
(37:08):
On the battery side, Colorado isn't as strong of a battery market as California. Batteries are really useful for backup during a power outage and we have customers who do that. I think our battery attachment rate is probably pretty low and we're probably more like 5% of our customers have added a battery. I think if we were in California that would be much higher, probably more on the 30 to 40%.
(37:32):
But also I think technology is changing and I think there's a lot of really cool products out there we're really excited about. Vehicle to home is super exciting and something we will definitely install when it's a reality. But the idea that you have your EV in your garage and your solar on your roof is powering your EV, and then when you have a power outage, your EV then powers your house. I think that's something that people get intrinsically and understand that that would be really exciting as a solution for their home and something we will install once we feel that product is ready.
Cody Simms (38:05):
Great. Yeah, thanks for going into that. And then tell me what's next for you all you, you've raised an initial round of funding that again we were happy to be part of. Feel free to share whatever you want to about that and then what's the next step in growing the business for you guys?
Eric Reinhardt (38:20):
Yeah, absolutely. So we're using most of the money that you know and others gave us, which we really appreciate to invest in technology.
Cody Simms (38:27):
I want to be clear, we invested it. We didn't give it to you.
Eric Reinhardt (38:30):
True. Thank you for clarifying. We're disciplined stewards [inaudible 00:38:35] phrased. We believe in technology. This is what needs to happen for us to scale and for us to enable more customers to go all electric is we're investing in the technology to make the customer experience 10 times better. We're investing in technology to make the trade partner experience 10 times better and we're investing in technology to make the home orchestration and utility experience 10 times better.
(38:59):
We're looking at this end to end because we have to. And if we can solve it end to end, then we really have an experience that doesn't exist today. And I think we have the opportunity to connect those dots between the homeowner, the trade partner, and the utility in ways that haven't been done before to provide a customer experience, like I said, that doesn't exist. So we're building that platform, that's what we're focused on. Our milestones are around that technology. We're also trying to get to the point here in Colorado where we're the go-to regional player for Colorado. We have that brand recognition, we have that process. We have the people in place and we have that playbook to then extend to other states. So I think probably next spring or next summer, we're going out for an additional round that will be built around the next step for technology, but also the next states we're going to expand to.
Cody Simms (39:51):
And for folks listening who are in Colorado and interested in electrification, what should they do? And then separately, if you want to share what kind of roles you're looking to fill on the team in terms of people who are interested in advancing their career toward home electrification as their way to engage on climate change.
Eric Reinhardt (40:11):
If you're in Colorado, please go to heliohome.io. That's our website. Or you can just type in Helio or Helio Home into Google. We have a very simple signup form on our website and we'll give you a call. We'll get you an initial energy model of your home and then we'll schedule a home assessment. So like I said, we're very consultative. We're here to be your educational resources as you go through this. Even if you just want to ask questions or you're just interested in an EV charger or one of those things, we can help you and we can provide the right solution for you. So feel free to go to our website and we'll take care of you. On the talent end, we are always looking for new talent. So even if we don't have something posted on our website, I encourage people to reach out because things will change daily.
(40:58):
Right now we're looking for developers both front end and back end. So if you're excited about what we're doing and how we're trying to change the space, please do apply. We're also looking for home assessors and designers to visit the homes and help us design the right solutions. And we're always looking for product people and design people. Design and the customer experience are super important to what we're doing. So we're always looking for talent on those ends. But like I said, we're changing fast, we're growing fast. So if you don't see something that fits your skillset, don't hesitate to reach out because it might change quickly.
Cody Simms (41:34):
The fact that you're hiring for home assessors and home designers I think is super awesome because it shows that as the climate economy continues to grow, there are ways for people who have had more traditional jobs to get into the startup tech ecosystem in a way that is hopefully value accretive for lots of people.
Eric Reinhardt (41:55):
Absolutely. And on the same end, if you're a trade partner, if you're an HVAC professional, a plumber, electrician, solar installer in the Colorado area and you're excited about what we're doing, please also reach out. We have a trade partner page on our website and we're always trying to expand our network. And like I said, we're trying to make this easy for the trade partners. So if you're looking to grow your business, I think we can help you.
Cody Simms (42:20):
Eric, thank you so much. Anything I should have asked that I didn't ask?
Eric Reinhardt (42:23):
I'll just end by saying that, like I said, this is an inevitable transition and that this is possible today. I think people keep thinking with climate that, hey, eventually the technology will be there. Eventually this will be right for my home. And the truth is, it's right now. The technology is ready. We have an experience for you, we can electrify your home, we can get you off fossil fuels. I think time's running out, it's time to do this and it's a one time change. I think this is also super impactful people think about is that you're making a one time change to your home that takes care of 10 to 15 tons of carbon a year for the rest of that home's existence. And there's probably nothing else you can do as an individual that'll have such a big impact on climate change is making that choice with your home.
Cody Simms (43:11):
Awesome. Thank you, Eric.
Eric Reinhardt (43:12):
Yeah, thank you for having me. It was a pleasure. Thanks, Cody.
Cody Simms (43:16):
Thanks again for joining us on my Climate Journey podcast. At CJ Collective, we're all about powering collective innovation for climate solutions by breaking down silos and unleashing problem solving capacity. To do this, we focus on three main pillars, content like this podcast and our weekly newsletter, capital to fund companies that are working to address climate change and our member community to bring people together as Yin described earlier.
Jason Jacobs (43:41):
If you'd like to learn more about MCJ Collective, visit us at www.MCJcollective.com. And if you have guest suggestions, feel free to let us know on Twitter @MCJpod.
Cody Simms (43:56):
Thanks, and see you next episode.
