When most people think of green investing, they think of solar panels or electric cars. Some savvy investors, however, realize the greatest potential for helping the environment and getting a good return on investment comes from the HVAC industry. One of these investors, Breakthrough Energy Ventures, recently led a funding round for Aeroseal LLC that raised $22 million. Energy Impact Partners and Building Ventures also participated.
The company helps contractors seal ducts using an aerosolized material. They seal off the ducts and spray this material in, and it covers any leaks.
“Aeroseal’s technology addresses a challenge found in every building: energy waste caused by undetectable and unreachable leaks,” said Carmichael Roberts, founder and managing partner of Breakthrough Energy Ventures.
“This investment will help them build on their market penetration and expand their efforts to reduce carbon emissions in buildings, while creating cleaner, healthier air for us to breathe.”
Aeroseal is ramping up staffing at its Dayton, Ohio, facility. Bill Diedrich, vice president of residential business, said his team added some recruiting resources in recent months as it seeks to add these people. The company is adding positions for R&D and marketing as well as support.
“We’re spending a lot of time writing job descriptions and interviewing people, envisioning the organization we want to put in place to support the dealer network as it grows,” Diedrich said.
Closing the Holes In Duct Work
Gaining a reputation as a company that’s helping the planet makes the job easier, he said. Aeroseal improves a building’s carbon footprint by making the HVAC system run more efficiently. Diedrich knows firsthand what a difference it can make.
When he joined the team last year, Diedrich was working out of his house in a room with southern exposure. That room grew hot by the afternoon, and he noticed his air conditioning was not performing as it should. The contractor came out and found a Freon leak, but he also found the ducts leaked.
The contractor applied Aeroseal and covered the equivalent of a 173-square-inch hole. Diedrich found he could raise the set point on his thermostat and feel even more comfortable than before. Aeroseal executives believe using this product in even more homes will reduce carbon emissions by one gigaton.
“We are doubling our focus on innovation to make our technologies even easier and more cost-effective to deploy throughout the world,” said Amit Gupta, Aeroseal’s CEO. “Whether we are enabling net-zero home construction or improving energy efficiency on existing buildings, Aeroseal can help any building reduce its carbon footprint.”
Moving Toward A Greener World
Diedrich said some of Aeroseal’s greatest benefits actually come on the heating side. As governments attempt to shift consumers to electric heat rather than gas, the rate of heating provides a major hurdle to full efficiency. Gas heat warms a room more quickly than electric, Diedrich said. This becomes a larger issue if the ducts leak. He said a 20 SEER system with 30% leakage performs more like 11 SEER.
“You’re going to pay for your ducts leaking regardless if you get Aeroseal,” Diedrich said. “If you’re in the home awhile, you’re going to get that money back.”
Diedrich said accessing funding through an investor such as Breakthrough Energy Ventures is more of a partnership, with the investors providing guidance on how best to expand. Breakthrough Energy Ventures’ first fund was created in 2016 as part of the Breakthrough Energy. This network includes investment funds, non-profit and philanthropic programs, and policy efforts linked by a shared commitment to scale the technologies needed to address climate change and achieve a path to net zero emissions by 2050. Among the famous names associated with the fund are Bill Gates and Jeff Bezos.
The fund is investing in other HVAC products as well. Last winter, Breakthrough Energy Ventures led a funding round for Turntide Technologies, manufacturer of a more efficient motor for commercial HVAC systems. The funding round drew money from the Amazon Climate Pledge and Robert Downey Jr.'s FootPrint Coalition Ventures. Turntide CEO Ryan Morris said the company will use the money to expand development and production of its Smart Motor system