One of our core investment theses is that we urgently need solutions that move our built environment forward on the path to sustainability. A sustainable built environment is one that will never exhaust the resources required to create, maintain, or improve it. We believe that electrification is both an essential and the inevitable means of accomplishing this outcome. That’s why we’re excited to share our recent investment in Elephant Energy.
The Elephant Energy team.
We are in the midst of a climate crisis, and 87% of climate-altering US carbon emissions are from energy usage. Here in the US, we have a national goal of a clean grid by 2035 and a net zero economy by 2050. To accomplish these goals quickly enough to limit global warming to a critical 1.5 degrees Celsius, we must address the demand side of energy. That means that we need to accomplish a complete retirement of all machines employed where we live, learn, work, and play that run on fossil fuels over the next decade, and replace each with an electric counterpart.
Luckily, we can make enormous strides toward accomplishing this goal right in our own homes through the “kitchen table decisions” we all make everyday. With 121 million households in the US alone producing 42% of energy emissions, replacing existing fossil fuel burning machines—like furnaces, ovens and stoves, water heaters, and personal vehicles—with electric counterparts guarantees massive reductions.
The residential electrification impact on our planet is massive, but the benefits don’t end with this most critical value proposition. Households that electrify will also save on energy cost and have the health benefits of cleaner indoor air.
A spike in home gas heating prices coincides with unprecedented new financial incentives for modern home systems from the Inflation Reduction Act (IRA). Beginning in January, the IRA will allow homeowners to deduct up to $2,000 from their taxes for electric upgrades. This will make it more affordable than ever to replace old furnaces, water heaters, and gas stoves with efficient electric heat pumps, heat pump water heaters, induction stoves, and more. Even more, these federal incentives will exist on top of locally available rebates.
Despite the tailwinds, electrifying the entirety of US households is not without its challenges. Even the most determined early adopters have found it challenging to navigate the complex and opaque journey to full electrification. First off, while electrifying our household machines unlocks future energy and cost savings, at the moment of purchase the initial replacement is often more expensive than its fossil fuel counterpart. Until demand dictates that manufacturers produce more electric machines than fossil fuel ones, this will continue to be the case of the existing supply. Secondly, even when cost isn’t a key factor in a household’s purchase decision, understanding how to prioritize electrification projects and select the ideal products and service providers is daunting and confusing. To make the process even more challenging, while we are happy to see both federal and local incentives being put into place, attempting to take advantage of them can be equally overwhelming.
Households may try to find a contractor to help them navigate the journey. But, as is the case with our determined early residential adopters, even the most qualified service providers face the same complications. It’s often far worse. See this interaction when BVIN member, smart buildings guru, and Colorado resident James Dice endeavored to chart his own electrification course:
As James closes, “Has anyone else had this experience? What to do?” If an expert in building tech can’t navigate his own home electrification journey, how do we expect the average, busy homeowner to do so?
Elephant Energy offers the solution. Founded by Joshua Lake & David “DR” Richardson in April 2021, Elephant Energy provides homeowners and contractors with the resources to diagnose, convert, install, and service modern electrical systems, including heat pumps, hybrid heat pump water heaters, induction stoves, and electric vehicle chargers. While the team is initially focusing on enabling home electrification in Colorado, including the Greater Denver/Boulder area, Elephant Energy plans to soon expand its offering to other geographies.
Until Elephant Energy, there hasn’t been a dedicated, trustworthy “one-stop shop” to enable residential electrification projects, let alone one in service to both households and contractors. The platform helps homeowners get clean, safe, and affordable technologies for their homes and vehicles. Additionally, Elephant Energy designs systems and procures equipment, using building science and total cost of ownership (inclusive of rebates, tax credits, etc) to ensure they are getting the most comfortable, best value for their home. And, through the platform, Elephant Energy connects homeowners to the community of vetted, reliable contractors who know how to get the job done right. The platform offers significant value to these contractors, as well. Elephant Energy sources qualified leads for businesses and does the heavy lift of upfront data collection and vetting of the homeowner. With this vetting and the upfront design and procurement, the platform provides contractors with more reliable work, less paperwork, and less risk.The end result doesn’t just support a seamless process that’s beneficial for both homeowners and contractors—it enables the more accessible, more widespread home electrification transitions that our climate so desperately needs.
When we met DR and Josh, we quickly realized that these two super smart founders were dedicated to creating a more sustainable built word. They’ve both got bonafides in building and investing in climate positive businesses and have truly dedicated their careers to manifesting a more sustainable built world. Josh has spent his career building climate-tech companies across solar energy, electric vehicles, and autonomous vehicles, while DR invested in electrification and sustainability focused companies at Vision Ridge Partners and serves on the Board of the Council for the New Energy Economics. Their passion and experience make them uniquely qualified to crack the code of home electrification, and we’re excited to see them do so.
For all of these reasons, we are thrilled to lead Elephant Energy’s Seed Round, with participation from Daniel Gulati of Treble Ventures. You can read more from Elephant here, and you can begin your own electrification journey here.