The startup cleaning up homes’ carbon footprint with a unique business model – Protocol

Home Insulation Services Weightlifting

Shiny silver panels hug the walls of Andy Frank’s attic; they vaguely remind me of a child’s robot Halloween costume. A sticky-looking foam lines both the gaps in the attic’s floorboards and the roof, plugging up holes where squirrels could have once taken shelter.

The space is positively sweat-inducing, even for the mere minute I have my head poking above the trapdoor.

I duck my head out and let the door close, so that I’m fully back on the second floor of the Connecticut home. The sweaty June feeling evaporates instantly on the pleasant — even cool! — landing. Frank assures me this was not always the case: Hot summers and cold winters used to be a fact of life in certain rooms, even with his HVAC system running at maximum power. This is his home post-Sealed.

Frank is the president and co-founder of the home decarbonization company, which he launched in 2012 alongside CEO and co-founder Lauren Salz. While Sealed is a decade old, it has found its footing in recent years. The pandemic, in particular, gave rise to a set of circumstances that Sealed was inadvertently positioned to address. As Salz put it, the pandemic “just brought forward the future in a lot of different ways.”

When it comes to home electrification, that future can’t come soon enough. Residential energy use accounts for roughly 20% of the greenhouse gas emissions in the U.S. There are about 80 million owner-occupied homes in the U.S., most of which have not been weatherized. That means they leak heat in the winter and cold air in the summer. Stopping this waste at the source has the potential to be a huge opportunity for decarbonization and making people’s lives more comfortable. It’s also daunting; no two homes are alike, creating a near-infinite suite of solutions.

Spray foam lines the home’s joists in Andy Frank’s basement.Photo: Lisa Martine Jenkins/Protocol

But Sealed is doing the improbable: convincing homeowners to take a long, hard look at their oft-ignored HVAC systems and insulation in order to save both energy and money.

The company’s central premise is that it will cut a home’s energy bill through a combination of installing insulation, a heat pump and other upgrades like air sealing (the sticky-looking foam in Frank’s attic, for example) and LED bulbs. If those upgrades fail to save energy, Sealed will eat the cost of retrofits. Assuming they do, the price of the upgrades are amortized over time, a setup that Sealed customer Michael Latchmansingh said is “fantastic.”

After purchasing his Eastchester, New York, home in 2019, Latchmansingh and his family endured a chilly winter that made it clear his upstairs rooms weren’t sufficiently insulated. At the recommendation of his dad, he reached out to Sealed about an upgrade.

The Sealed process, crucially, starts with an analysis of a home’s energy use, both current and future. It combines information like a home’s age, location, layout and energy usage history with data from third-party sources like Zillow and Google Maps to present its customers with personalized proposals on how to save energy.

These first steps are all done remotely; then, the company partners with local installers that have been vetted and trained in energy efficiency to come do the physical work. Sealed currently operates in the Northeast, which is an ideal location for its services given the warm-to-hot summers and cold winters. But it has expanded to Chicago — another place with extreme seasons — thanks to a recent $29.5 million funding round.

“We need to make sure that the installation happens in a quality way, because the truth of the matter is, in most cases, the quality of the installation actually matters more than the equipment itself,” said Frank, noting that the market for home efficiency-specific contractors is growing from a relatively small base.

Some customers (like Latchmansingh) elect to upgrade just their insulation or invest in air sealing, whereas others elect to go whole-hog and overhaul everything. Frank’s first home, purchased in 2020’s pandemic rush, serves as a laboratory of sorts for the Sealed process.

There are marks where the boiler once stood in the basement, next to the new heat pump hot water heater. Photo: Lisa Martine Jenkins/Protocol

For Frank, the upgrades couldn’t come soon enough. After a winter in which he and his wife went to sleep wrapped in sweaters and avoided their primary bathroom — it sits over a drafty garage, which made it tundra-like — Frank installed eight heat pumps across his home’s three levels. One of these heat pumps whispers contentedly behind his desk, right above a framed vintage heat pump advertisement. (Yes, he really likes heat pumps that much.)

The house is now reliably comfortable in the sticky New England summer. (How it handles the winter remains to be seen, since the upgrades are fairly recent.) Signs of the old HVAC system can be found throughout the home: There are marks where the boiler once stood in the basement and on certain walls where ducts have been removed. The mammoth air conditioner that once cooled Frank’s house now sits in the garage, waiting to be carted away. The kitchen still has a gas range for cooking, though an induction stove is on the way, meaning Frank will be able to cap his gas main in short order.

It’s homes like Frank’s that form a major part of the electrification challenge: older, with heating systems that rely on fossil fuels. Most homeowners don’t think about their HVAC systems until they need to be replaced, which happens roughly once a decade. It’s a timeline that is slower than addressing climate change demands, said Panama Bartholomy, executive director of the Building Decarbonization Coalition.

“Existing buildings are the real challenge” when it comes to moving away from the use of methane gas in the home, Bartholomy said. While there has been a surge of cities banning gas hookups, those bans have only focused on new buildings.

“We need to be putting in place structures in order to be able to really get contractors and building owners to start making these transitions,” Bartholomy added.

Even if more legislation that favors electrified appliances over gas ones and promotes weatherization is a ways off, the fact that companies like Sealed are finding success is a sign of at least some progress. Heat pumps in particular have proven to be a sleeper hit, with sales hitting an all-time high in the last two years, per the Building Decarbonization Coalition’s manufacturing members, Bartholomy said.

This is a trend that both Bartholomy and Salz attribute to the pandemic. As people spend most of their time in their homes, investing in comfort has become a priority. That means not just a more nappable couch, but also heating, cooling and general home efficiency. Interest has also coincided with rising concerns about how piping methane gas into homes can worsen indoor air quality and also be a public safety concern, given the risk of explosions.

The vintage ad that Frank has hanging in his office.Image: GE

“The only way to really drive mass adoption of these types of technologies is … a really strong customer value proposition that isn’t about either saving money or saving the planet,” Salz said, because regardless of the potential benefits, “it’s still a home renovation.”

For Latchmansingh, it’s one he would go through again. The first installation of insulation took a few days (though the contractors did have to pause for a day when the heat in the attic at the height of summer became unbearable) and generally speaking was “as easy as could be.”

Latchmansingh said he would return to Sealed when the time comes to replace his HVAC system. In retrospect, he wishes he had done so last summer, before the war in Ukraine sent gas prices through the roof. And in the meantime, he is spreading the Sealed gospel to friends and family who might qualify.

That “seeing is believing” evangelism and education are core parts of Sealed’s vision. The team is putting new emphasis on teaching customers about the merits of decarbonization and the technologies available to do so. The good news, Frank said, is that heat pumps can address many issues people have with their home, from comfort to sustainability to health. The bad? The majority of people don’t know they exist. But happy customers and more outreach could flip that script.

“Most of the people we encounter in the market don’t know a lot about heat pumps, but it’s better than it was a couple of years ago,” Frank said. “It’s really a matter of first educating them … and then making it easy and affordable for them to be able to install those technologies.”

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