Why We Invested in Zero Homes
By Arrun Kapoor and Josef (Joey) Barrick
Home electrification is crucial in reducing carbon emissions. In particular, heat pumps are the single most impactful upgrade a homeowner can make to reduce their carbon footprint. Residential buildings account for 12.5% of all emissions globally, and heat pumps lower household annual energy emissions on average by 36% to 64% — or 2.5 to 4.4 metric tons of CO2 equivalent per year per housing unit.
Instead of producing heat by burning gas or other fossil fuels, heat pumps use electricity to move heat and keep homes comfortable: warm in the winter, cool in the summer. Heat pumps improve indoor air quality and lower energy bills, but many homeowners struggle to overcome the financial and logistical barriers to installing the systems. This challenge is compounded for low- and middle-income homeowners: academic research frequently finds that disadvantaged communities face a higher environmental burden, yet they lack the means to upgrade their homes and reduce pollution.
Zero Homes is a Colorado-based company, founded by Grant Gunnison, that eliminates those barriers via a digital-first home upgrade platform for heat pumps and home electrification. SJF is excited to share that we participated in a $16.8 million Series A funding round for Zero Homes, which uses homeowners’ smartphones and a precision design platform to generate a full digital model of a home and facilitate the entire renovation process.
Electrifying homes for sustainable living
Decarbonizing the U.S. residential building stock will require a significant acceleration of home energy upgrades. Scaling adoption of sustainable technology will require us to slash high upfront costs and remove complicated planning processes.
Gunnison, an MIT-trained engineer with experience managing his family’s general contractor business, left a career in satellite communications and remote imaging at NASA to launch Zero Homes in 2021. The company has developed a mobile-based assessment tool that enables homeowners to scope the appropriate home upgrade project with a high degree of accuracy, removing the need for time-consuming contractor site visits and dramatically reducing design costs.
As we’ve explored various pathways for home electrification, we found heat pumps to be the most attractive across a number of verticals: they are a direct replacement for existing hardware in the home; there is an established incentive program that is well-adopted across the HVAC industry; there are longstanding trends of heat pump adoption over traditional HVAC; and utilities are increasingly promoting heat pump adoption as a way to decarbonize while building flexible load growth, allowing them to be more responsive ahead of and during peak energy loads.
Among heat pump-oriented solutions, Zero Homes’ solution is unique in that it is the only one to have received approvals from both the Department of Energy (DOE) for its data capture capabilities relative to a manual home energy audit and the Air Conditioning Contractors of America (ACCA) for the first ever Manual J calculator — a critical, highly complex requirement in sizing HVAC systems — on a smartphone.
Expanding access to home improvements
Zero Homes is closely aligned with SJF’s Clean Energy and Electrificationobjective: “Accelerate the Transition to Clean Energy: Innovate and scale solutions that remove bottlenecks to speed up the energy transition.” The company’s low-friction approach to home electrification gives homeowners an easy path to electrify their in-home heating and cooling as well as a platform for future home upgrades.
The company is positioning its solution to be widely available to homeowners, regardless of income. For example, the company’s partnership with the Chicago Department of Housing’s Green Homes Chicago program delivers electrification upgrades for low and moderate income households at no cost to the homeowners. This housing strategy is particularly impactful because it includes full-home upgrades of energy-intensive homes. Heat pumps deliver positive health benefits to homeowners by removing the pollution of natural gas. By installing more heat pumps in low- and middle-income communities, Zero Homes is making them both less polluted and more comfortable for residents.
Supporting small business owners
For SJF, Zero Homes is a strong example of a company that fits our cross-sector investment thesis. While it may not look like it at first glance, Zero Homes goes beyond clean energy and electrification to also deliver measurable impact in our workforce focus area. Gunnison is motivated to help small contractor businesses create quality jobs. Zero Homes knows many contractors prefer working in the field to doing in-office tasks. Zero Homes handles the back-office logistics of scoping and pricing jobs and sourcing equipment so contractors can focus on their hands-on upgrades.
That support will be crucial for the future of an industry facing workforce challenges. Contracting businesses are some of the most common small businesses in the American workforce, but their longevity is difficult to maintain across multiple generations. Many American contractors and small business owners are aging; as Zero Homes expands its support for contractors and homeowners, it will allow a shrinking workforce to increase productivity. Zero Homes empowers homeowners and contractors to complete electrification upgrades quickly. The company has the potential to deliver massive carbon reductions while expanding access to home improvements that would otherwise be prohibitively expensive to low income households. SJF is excited to support Zero Homes in bringing positive health benefits and lower energy bills to homes across the country.
For more on how Zero Homes is making it easy for homeowners to go all-electric, read the company’s Series A announcement and Axios’s coverage of the funding round.
