Upgrading your home's insulation and HVAC with no upfront cost

Read time: 6 minutes

Hi all!

Welcome to issue #5 of Future Powered, where we showcase innovative products and services to make your home smarter and more energy efficient. We cover everything from smart appliances and devices to solar panels, heating, EV chargers and more.

Let’s dive in.

The Problem - Home comfort and energy waste

Living in an old house often means dealing with inefficient air conditioners, poor insulation, and discomfort throughout the seasons. You find yourself bundled up in blankets during winter and sweating inside your own home during summer.

With home insulation costing around $1.50 per square foot and average HVAC at $5000, improving the comfort of your house is out of reach for most people. And to make matters worse, finding qualified contractors to do the work can be a challenge.

To compensate, you end up cranking up the air conditioner and heating system. But that comes at a price. heating and air conditioning alone account for 51% of residential energy consumption, contributing to roughly 20% of greenhouse gas emissions in the U.S.

That’s a lot.

The Solution

Sealed is a climate tech company that wants to eliminate energy waste from homes and electrify all houses.

They design, manage and finance projects to improve the comfort and efficiency of your home.

They offer two plans:

• Comfort plan: This plan tackles air sealing and insulation, with the goal of making your house cooler in the summer and warmer in winter. It involves closing gaps and cracks throughout the house, upgrading insulation, installating smart thermostats and LED lighting;

• Climate control plan: This plan focuses on making your HVAC up-to-date. It includes installation and setup of a new heat pump, smart thermostat and hot water heater.

For the installation, Sealed uses off-the-shelf equipment and connects its customers to a network of contractors, who reduce energy waste based on the chosen plan.

The Business Model

Normally, doing all of these would be too expensive and unatainable.

Here's the game-changer: Sealed takes care of everything with no upfront cost for the customers. Homeowners are billed monthly based on the energy they save. This means that that Sealed only gets paid if they successfully reduce your energy expenses.

How is Sealed able to afford this model

There are two drivers to finance this type of business model:

1. A lot of funding - covering installation and hardware costs is extremely expensive, which is why Sealed needs a lot of financial infrastructure to back this operation. As a result, last year they raised $45.5 million, with the total capital raised to date totaling $62.5 million.

2. A lot of data - they need to predict as acurately as possible the future energy usage of the home to evaluate its potential. This is why they need so much information in the beginning of the process, and why they recently bought a sensor startup, to have a deep level of data from customers.

The technology behind Sealed

Sealed begins the process by assessing your home's energy profile, analyzing structural details, energy usage patterns, and potential energy waste.

They then leverage their machine learning algorithms to predict your home’s future energy usage and determine its potential for reducing the energy consumption.

This also means that this prediction can be flawed and, in some cases, they might even lose money on a contract. However, this is balanced out in a portfolio of homes.

Final remarks

Sealed is solving the most important pains related with residential heating and cool.

On one hand, it’s solving the problem with installers and getting the products from different manufacturers. With their approach of taking care of getting and installing the equipment using qualified contracts, it’s a no-hassle approach for the houseowners.

On the other hand, it’s solving the problem of cost. And it’s solving it in a clever way with skin in the game, where they get a share of the energy savings. As such, the client only has to pay them something if they are able to actually save energy. If some months of the year you’re not saving energy then they won’t receive money.

This is what the kind of innovation we need - addressing customer problems at their core using differentiate business models.

That’s all for today.

Thanks for being a part of Future Powered!

I’d love to know which products you want to share. Don’t hesitate to reply to this email and let me know. I’ll give you a shoutout when I publish it.

Until next time!

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