What if contractors could get fully designed, install-ready heat pump jobs without ever rolling a truck to bid? That's the promise behind Pearl Edison's "concierge" model — a white-labeled platform that's turning utilities like DTE Energy or the City of Ann Arbor into heat pump matchmakers and solving one of the industry's biggest problems: the tradeoff between high quality design and reasonable cost of customer acquisition.
Jake Yurek and Evan Anderson, Co-Founders of Detroit-based Pearl Edison, aren't trying to replace contractors or sell them software. Instead, they're positioning themselves as the invisible infrastructure that makes heat pump sales and home electrification actually profitable — handling everything from load calculations to customer education while letting contractors focus on what they do best: installations.
Their approach addresses a fundamental problem that's plagued the heat pump industry: contractors spend enormous resources on marketing, sales calls, and system design, only to win a fraction of the jobs they quote. Pearl Edison flips that equation by delivering "jobs, not leads" — fully contracted, fully designed projects where the pricing risk sits with Pearl Edison, not the contractor.
Most companies in the heat pump space are trying to go direct-to-consumer or sell software to contractors. Pearl Edison took a completely different path: they work exclusively through white-labeled partnerships with utilities, municipalities, and green lenders.
"We don't operate direct to consumer as Pearl Edison," Evan explains. "We operate a service for partners. So that's DTE Heat Pump Concierge in Michigan, or DLC Home in Pennsylvania."
Here's how it works from the homeowner's perspective: They visit their utility's heat pump program (which is actually Pearl Edison's platform in white-label), answer 3-5 minutes of questions in a "TurboTax-like format," and get an instant estimate showing system design options, costs, rebates, and operating cost impacts.
If they're interested, Pearl Edison sends a BPI-certified assessor to their home — not to sell, but to complete a home survey using guided workflows and diagnostic tools. The result is a comprehensive set of information about the home that then goes to an expert in home electrification and heat pump system design. That expert then finalizes the scope of work that includes everything from load calculations to bilingual installer requirements.
Only then does a contractor get involved — and when they do, they're receiving a fully designed job, not a lead.
The traditional model forces contractors to absorb huge upfront costs. They market to generate leads, send salespeople to homes, perform assessments, and create quotes — with no guarantee of winning the work. Even when they do win, they're often competing primarily on price.
Pearl Edison's model eliminates most of these costs. Contractors receive jobs that are:
"Our goal with contractors is to never bring them a job unless it's fully designed and ready for installation," Jake explains. "We want to provide them with more detailed information than what they would get from having one of their techs go to that location."
Here's where Pearl Edison's approach gets really interesting: they tell homeowners the price upfront, but they don't share that number with contractors. Instead, contractors bid what they think the job is worth based on the detailed scope of work.
If Pearl Edison quoted $20,000 to the homeowner and the contractor bids $17,000, Pearl Edison keeps the $3,000 difference to cover their field operations and risk. If the contractor bids $23,000, Pearl Edison absorbs the $3,000 loss.
"That delta is where we make money to cover the field operation," Evan says. "And the converse scenario where we say 20 and it's 23, it's just a bad day to be Pearl Edison."
This model protects contractors from the race-to-the-bottom pricing that's plagued other platforms. There are no rate cards or fixed pricing — contractors maintain full control over their margins.
One of Pearl Edison's key insights is that expert heat pump designers are the limiting factor for industry growth. You can't scale to millions of installations if every job requires a Brynn Cooksey-level expert to design the system.
Their solution is software that amplifies existing expertise rather than replacing it. The BPI-certified assessors who visit homes use guided workflows to collect the right information — characterizing rim joist insulation, running airflow diagnostics, documenting details that matter for installation quality.
"We're largely just trying to apply best practices we didn't invent and make it easier for an industrious but not mechanically expert team member to get through that process," Evan explains. "So that what lands on the lap of the Brynn Cooksey expert is really helpful."
The result is a scalable model where one central expert can review and approve dozens of system designs instead of visiting every home personally.
For utilities like DTE Energy, Pearl Edison solves a different problem: how to drive energy efficiency or electrification goals without risking their brand on poor customer experiences.
"I think where they see value in what we do is let's try to guardrail the quality of the information that the customer receives on costs and benefits," Evan notes. "Let's try to guardrail the quality of the system design. Let's only work with really great contractors that are committed to winning on quality."
There's no money changing hands between Pearl Edison and their utility partners. Instead, utilities get:
For contractors, this creates an interesting dynamic: utilities are essentially becoming their marketing and lead generation engine, but through a model that maintains quality and profitability.
Pearl Edison's cautious approach is informed by history. In their writing, they reference "Heat Pump 1.0" — the period in the 1980s and 1990s when heat pumps first entered cold and moderate climates, and "frankly, it didn't go well."
"There were too many poorly installed heat pumps. There were too many heat pumps installed that probably weren't fit for purpose," Evan explains. The result was a generation of negative customer experiences that continue to impact how contractors and homeowners perceive heat pumps today.
Their fear? A "heat pump revolt" where poor installations in the current wave poison the well for the technology's future adoption.
"If we're going to make the transition to something new, it's pretty easy to poison the well pretty quickly with friends and neighbors if you put something new in that doesn't work as well as their old thing," Jake observes.
This historical perspective drives their obsession with installation quality and proper system design — they're not just building a business, they're trying to ensure Heat Pump 2.0 succeeds where Heat Pump 1.0 failed.
Pearl Edison launched with DTE Energy and the City of Ann Arbor in early 2024, adding Duquesne Light in Pennsylvania shortly after. They've completed about 50 installations with many more in process.
The feedback from contractors has been positive, though Jake acknowledges the model requires a workflow change: "It takes a leap of faith to say, I'm not gonna go to the house and look at this with my own two eyes before saying, this is what I think the project costs."
To build trust, Pearl Edison focuses on over-communication early in relationships and provides protection if there are surprises on site. The goal is proving that their system design and scoping is thorough enough that contractors can bid confidently without rolling truck.
Despite all the technology improvements since the 1980s, Pearl Edison acknowledges an uncomfortable truth: heat pump economics haven't improved as much as the industry likes to claim.
"As the price of electricity goes up relative to gas, a lot of those efficiency gains are wiped out just purely from an economic standpoint," Evan notes.
Their solution is radical honesty with homeowners. Instead of promising savings to everyone, they provide specific, home-based analysis. A homeowner with an 80% propane furnace will get very different economic projections than someone with a 96% natural gas system.
"If you don't have that information and someone's cold called you on the phone, it's very difficult to be helpful," Evan explains. "I think the response of 'it depends' is a lot more responsible than what some in this space do where they're painting with a broad brush around savings."
Pearl Edison's model points toward a future where customer acquisition becomes increasingly specialized and sophisticated. Rather than every contractor building their own marketing and sales operations, we might see more infrastructure players handling the complex work of customer education, system design, and project scoping.
For contractors, this could mean:
The trade-off is giving up direct customer relationships and trusting a third party to scope work accurately.
What's most interesting about Pearl Edison isn't just their specific business model — it's their recognition that heat pump adoption needs new infrastructure, not just better technology.
"We come from the school of thought that it's actually commercially quite prohibitive to acquire a customer," Evan explains. "We just thought we'd dig in on how do we compress that cost structure so that this is practical for the people doing the real work."
This infrastructure approach — where specialized companies handle customer acquisition, system design, and project management while contractors focus on installation — might be how the industry scales to the millions of heat pump installations needed for widespread electrification.
Pearl Edison is betting that the future of heat pump adoption isn't about replacing contractors or selling them software, but about building the invisible infrastructure that makes their work profitable and scalable.
Whether that bet pays off depends on execution, but their early results suggest there's real demand for a model that treats contractors as partners rather than customers to be disrupted.
Pearl Edison's approach offers several insights for contractors navigating the evolving heat pump market:
The heat pump industry is at an inflection point. Companies like Pearl Edison are building the infrastructure to scale adoption while protecting quality. For contractors, the question isn't whether to embrace these changes, but how to position themselves to benefit from them.
Want to learn more about Pearl Edison's approach? Visit pearledison.com or connect with Jake and Evan on LinkedIn.
[00:00] - Introduction
[02:30] - Meet Jake & Evan and how Pearl Edison started
[04:07] - Jake & Evan’s career journeys and how they reconnected
[08:35] - Pearl Edison’s white-labeled B2B model explained
[15:52] - On pricing, bidding, and contractor flexibility
[18:22] - Traction: Where Pearl Edison is operating now
[27:25] - How smarter diagnostics empower homeowner decision-making
[37:34] - What’s keeping them up at night — and what excites them
[40:01] - Advice for startups and contractors in the space
[00:00:00] Evan Anderson: We use Heat pump one bio to refer to the this period where heat pumps are starting to go in in cold or moderate climates for the first time. And frankly, it didn't go well. There were too many poorly installed heat pumps. There were too many heat pumps installed that probably weren't fit for purpose based on the use case that they were installed for. And we believe that continues to impact the way that the market contractors and homeowners perceive heat pumps today. And obviously, I think all your listeners are aware, very different time. The technology is so much better. There is a heat pump that's fit for purpose in virtually every home. Definitely true in the Rust belt climates we're in every day.
[00:00:45] Ed Smith: Hi everyone. A quick plug before today's episode. First, thank you. We're starting to get some awesome referrals for our iOS engineer role, and we're seeing some really great candidates, but we still haven't found the perfect person. Hiring the wrong person is the most expensive mistake any company can make. So we're still asking for your help. We are looking for a senior iOS engineer to join our mission of getting more heat pumps installed and perfectly sized for homeowners. This isn't just a coding job at Amplitude Shaping Product from day one. I am literally the only non engineer it should be. Joining an engineering driven culture where we move fast, make decisions quickly, and skip the bureaucracy. Because we're early stage, our engineers get to wear multiple hats, like having a healthy impact on product and design. You'd get to know our customers directly and figure out how to build exactly what they need. Plus, our products really taking off. Customers love it and keep asking for more. So we know what we need to build next. If you know an iOS engineer who wants to work on climate tech that actually impacts the world, here's what you can do. The job spec is the first link in our show notes. It's also my pinned post on LinkedIn. Repost it. Share it anywhere. But really take 30s and think about your network, your comfort adviser's younger sister. Isn't she a software engineer or true story. I did a ride along about six months ago with one of our earliest customers, where the husband of the home we were at was a kick ass engineer. The right person is probably already connected to our community somehow. Thanks again for the referral so far. We appreciate it. Please keep them coming. All right, now let's dive into today's episode. Hi and welcome to the Heat Pump podcast. I'm Ed Smith.
[00:02:25] Eric Fitz: And I'm Eric Fitz. We are co-founders of Amply energy.
[00:02:28] Ed Smith: So today we have Evan Anderson and Jake Urich, co-founders, leaders of Pearl Edison. Welcome, guys.
[00:02:35] Evan Anderson: Thanks, guys. Great to be here.
[00:02:36] Ed Smith: Awesome to have you. All right. This is particularly exciting for Eric and I. It's great to talk to two other co-founders of high risk startup in the heat pump space. But also when we started amplify, we were doing something similar to what you guys are doing now. And so this is just like personally very interesting. And we love what you guys are doing. So for folks listening who aren't in Michigan or Pennsylvania or know what you guys are doing, we'll get a lot deeper into it. But would one of you guys give us like a quick overview of what Pearl Edison is?
[00:03:08] Evan Anderson: Yeah, absolutely. We described Pearl Edison as a concierge service for heat pumps and for complex residential electrification and energy efficiency projects. More broadly, we partner with utilities, municipalities, green lenders, community organizations, environmental champions. Really anyone that wants to see more of these projects happen and guard the trust that they have with their customers against some of the risks in being involved with complex residential electrification and energy efficiency projects.
[00:03:39] Ed Smith: So the homeowner would work with you guys, and you would be that one point of contact for that sort of whole umbrella of services around electrification, which includes heat pumps. But it includes other stuff too.
[00:03:51] Jake Yurek: Yeah. That's right. And I'd say our charge is to get the right design in each unique home. When talking with homeowners, and obviously with all the different types of houses out there, that's a challenge with lots of edge cases. Totally.
[00:04:01] Eric Fitz: Absolutely. That's a great taste. I think we're going to dig some more into in your business here in a few minutes, but let's back up a little bit. I'd love to hear a little bit more about your individual backgrounds. Now, Jake and Evan, you guys both ended up in Detroit working on home electrification, but we're pretty sure you have different kind of paths to get where you are. Can you walk us through your different journeys and how you guys met?
[00:04:24] Evan Anderson: Yeah, we'll do individual backgrounds, but it's probably worth mentioning shared background. We were best friends and roommates all the way back in college. We've had lots of exceptionally terrible business ideas before we ever had a halfway decent one. I think at one point, Jake was building an app to display South Bend, Indiana beer prices and help classmates find out their Friday night plans. But we came back together on Pearl Edison now almost two years ago. Jake can describe his background in a minute. Mine's weird. He's in consulting. He's in government. Found a home in the startup world. And before we founded Edison, I was among the first handful of employees at a company doing infrastructure for automated driving. Left that experience with a taste for early stage building, but also with the knowledge I wanted to get a little closer to tangibly impacting people's lives in a timeline that was measured in months, not years. And that's when we started to talk.
[00:05:17] Jake Yurek: And then for me, I started my career in the consulting world as well. I was working all over the world and did projects on four different continents and said, before I do the consulting thing as a career, I actually wanted to run a business and that was around 2020. I joined a commercial solar developer as chief operating officer and helped the business span from or expand from historical roots in the northeast to all over the United States. And so this was an awesome way to jump into renewable energy projects and the challenges of both advising folks who are buying these systems and getting them installed by contractors in different geographies. And so a lot of that experience was very useful when we started Pearl Edison. I'd say for Evan and I, it's a pretty easy to make a leap to start a business when you're, like, doing it with your best buddies smarter than you. So it was an easy choice for me, at least.
[00:06:02] Ed Smith: If your guys backgrounds are weird, then Eric's and I are two because they're damn near identical. Like we're also friends from college. We were both in consulting at various times, then we both did a whole bunch of startup stuff. I would say eerily similar actually.
[00:06:18] Evan Anderson: I love.
[00:06:19] Eric Fitz: That, and I met the first day of freshman year.
[00:06:22] Evan Anderson: And then as did we. Yeah, over at pizza, I think in a dorm room.
[00:06:26] Ed Smith: Ours was a five day backpacking trip, which is a heck of a way to get to know someone early.
[00:06:30] Evan Anderson: On that's even better than pizza.
[00:06:33] Ed Smith: So you guys know each other a long time. What was your like aha moment that led you to come back together and get away from displaying beer prices? Love that. I'd love to hear the mission of that one, Jake. But to then start Pearl Edison itself.
[00:06:48] Jake Yurek: The first charge for us in terms of Pearl Edison was just to remove friction in the process for homeowners and for contractors in terms of getting these systems installed. I think it's pretty clear the friction that homeowners experience, that they reach out to a number of contractors. They hear back from a couple of them, and many times they get like wildly different scopes of work for what they would assume would be the same project. And so homeowners are confused and don't really know who to trust. But as we dug into that problem, I think it became more clear that the challenge the contractors were facing is that it's really expensive and time consuming to actually design the right system for every unique home that they're in. And so we said, I think there's a way that we can simplify different parts of this process to make it easier for both sides.
[00:07:29] Evan Anderson: Yeah, I think there's a certain class of electrification person that we probably both encountered that thinks of the problem to solve as contractors need to be educated, and we just don't come from that school of thought at all. We come from the school of thought that it's actually commercially quite prohibitive to acquire a customer, so to speak. And by we mean customer acquisition, broadly defined as including all the best practices around system design. And I think probably similarly to how you guys were motivated to do what you were doing, we just thought we'd dig in on how do we compress that cost structure so that this is practical for the people doing the real work, not moralize to them about heat pumps.
[00:08:10] Eric Fitz: Got it. And maybe this is a great spot to just dig a little bit further. Can you just explain your business model like in some simple terms, it sounds like you are. Or are you not selling directly to homeowners? Yeah. How does that work?
[00:08:24] Evan Anderson: Yeah, I think the simplest way to explain it off the bat is that we're functionally a general contractor. So a software enabled service provider, we do not sell software as a service. Maybe the most obvious way that we're unique is that we don't operate direct consumer as Pearl Edison. We operate a service for partners. So that's DTE Heat Pump Concierge in Michigan, or A20 heat pump concierge in Michigan or DLC home in Pennsylvania. Platform isn't just branded for these partners. It's configured around their goals. And then I think the other way to explain it is in terms of the contractor experience, and Jay can walk through that from start to end.
[00:09:03] Ed Smith: Before we do that though. So then so you're basically white labeled totally and also do some level of custom tailoring based on what the utility or government in that particular area is trying to do.
[00:09:16] Evan Anderson: No, that's totally right. The white labeling is the obvious aspect when people encounter our platform. But there's a tremendous amount of work with the partner that goes into putting requirements and constraints around system design and project scoping, equipment selection, and contractor selection. For instance, if you're DTE energy, you might want to enforce if we're going to put marketing money into trying to get heat pumps installed where there are presently propane furnaces, what standards do we want to enforce around weatherization? Things like that. Part of what we do is help them to shape customer experience and the scope of work between the contractor and the homeowner in a way that serves things they're trying to guard against.
[00:09:53] Jake Yurek: And I'd say like, part of this is us being flexible and working with the partners. We want to meet partners where they are to help them further the goals they're already pursuing. For example, a lot of partners may already have a qualified contractor network that they've spent a long time working with and building out. It's like we want to enhance what they're doing. They're not totally replace it. And so the flexibility is partially because we practically want to help our partners succeed. And that means meshing with what they're doing already, if they're doing things in the space.
[00:10:19] Eric Fitz: For me, it would be really helpful if you can walk through the starting point of like maybe from a homeowners perspective, and then the touch points to the different stakeholders are involved in, like your entire experience, your entire platform. Could you walk through that journey of what that looks like.
[00:10:35] Jake Yurek: For sure, and even add to this if there's details, key details that I missed, but what I'd say is that we are white labeled, and so homeowners would encounter us through white label platform for our partners, say TX heat Pump concierge. They'll go through a process with 3 to 5 minutes of questions and call it a TurboTax like format. So questions that are easy for anyone to answer without leaving the seat where they're sitting. Many times we have homeowners who go through the workflow while they're waiting for their kids to come out of school, or sitting at a hockey game on the weekend. After they go through that process, they get an instant estimate and so they can see system design options up front, price potential, operating cost impact, climate impact, other details about the scope of work and the rebates that they're eligible for. And part of the intention here is to help folks understand the trade offs between different system designs and the options that are available to them. And as simplest example, a homeowner might see an all electric system design in Michigan or a dual fuel system design in Michigan. And the major trade off there might be the future operating cost costs. Impact of installing one of those systems. And so we want people to start thinking about that before we ever engage them with an expert advisor. And so if a homeowner at that point is interested in moving forward, the next step is for us to engage them more directly.
[00:11:52] Jake Yurek: Many times the next step is a physical home assessment. While software can do a lot to help homeowners evaluate the trade offs of different system design options, we don't bet actual system design on software and want to actually get expert eyes on a home before finalizing that system design, and so the purpose of that home assessment is there's many purposes, but one of them is to finalize the system design for these homeowners so they can make an informed choice about what system to move forward with. Up to this point, it's just been interactions between a homeowner and Pearl Edison Arch kind of goal with contractors is to never bring them a job unless it's fully designed and ready for installation. And so after the homeowner sees their finalized quote, if they're interested in moving forward, that's when we start to get a contractor involved and share robust project documentation for them to be able to bid and plan and install without ever rolling truck to a house. And so our goal there is to provide them with more detailed information and more specifics than what they would get many times from having one of their techs go to that location. And so always trying to enhance the quality of information that we're sharing, and making it as easy as possible to understand what a job is going to be like before they ever set foot in that home.
[00:13:02] Eric Fitz: And the documentation you're providing, this is like you're doing a manual J you're doing manual S, like, what level of detail are you sharing with the contractor? What about this bid stage? What does that look like.
[00:13:13] Evan Anderson: They're going to get a design load. They're going to get minimum specifications for the equipment. Although we're not quite as prescriptive as giving them a free cert or something like that. So that they have a little bit of flexibility to install what they're comfortable with. We're giving them instructions on duct modification, and we're giving them a fairly prescriptive scope of work, and then lots and lots of photos and floor plans and documentation and things that we capture while we're in the home.
[00:13:37] Jake Yurek: I'd say the other thing just to add to what Evan said is like, sometimes the difference between a good install and a great install is attention to some of those little details. It's, hey, one of the supply runs has been disconnected. We need to make sure to reconnect that as part of this install. It's also saying things like the family is Spanish speaking and you need to send a bilingual tech if you have one. It's like those type of details that you get from actually interacting with the homeowner when you are there can make the difference between an installer goes well and an install that the homeowner is really thrilled with. And so some of that context we share in that job documentation as well. Amazing.
[00:14:09] Ed Smith: And so you guys are sending a Pearl Edison person to that because you said you use software, but you also have that on site review. So you're sending this pearlescent person to every home who is they sound fairly expert in mechanical system design and everything else. Go and do this and put together this scope of work.
[00:14:27] Evan Anderson: I'd say the person that we send is probably not totally an expert in mechanical system design, and part of the reason for the software we build in home is to guardrail the information that they collect so that the central expert, the Bryn Cooksey, so to speak, reference to your prior podcast guest has everything that they need to apply that expertise. So everyone that goes to the house is BPI certified. They're trained literally by Bryn, but then we aren't relying on them to apply all of the judgment on system design. Certainly, that you want them to leave the home with a hypothesis about the scope of work, but that expertise is either we try to reinforce it with software and the workflows that we design, or centralize it under an expert like Bryn, if that makes sense.
[00:15:10] Ed Smith: But the that makes total sense. But they've taken enough photos and notes and everything else that, like someone who is deeply expert, doesn't have to go out. They've got what they need to take the rest of the.
[00:15:20] Eric Fitz: Way, and they have enough training to know I need to spend. If they discover something, they need to spend extra time in this area because this has a huge impact versus this little thing doesn't matter at all. And I'm not going to add extremely detailed notes about XYZ other thing. So that's great. So they're experts in the proper data collection information gathering so that a someone a pro like a C can look at the details and be like, okay, I understand the problem and now I can figure out the right solution to deliver. Is that.
[00:15:48] Jake Yurek: Right? That's 100% right. And one of the. As we were trying to reduce the friction in this process, one of the things that occurred to us quite early on is that the human expertise necessary to get to that right, system design is one of the limiting factors. And so if you're going to install the right systems at scale, you have to try to make that the time of that human expert as efficient as possible, which means give them all the information that they need to make the decisions and try to reduce the number of decisions that they have to make over time in order to install these systems at the number that we all want to install them, to make climate impact.
[00:16:18] Eric Fitz: Got it. Okay, so now you've identified a contractor who's like, all right, I got enough detail. This looks good. Then what happens?
[00:16:27] Evan Anderson: They're going to provide their interest in an availability for and price for that work. At this point, the job is contracted with the customer and we're taking pricing risk directly. So we're not attempting to fix them to a rate card or anything like that. They're bidding what they believe the job is worth in order for it to be profitable for them. And we rely on that exchange of information to refine our own pricing to be better and better with the price conditioning that we do for customers.
[00:16:55] Ed Smith: So you guys tell the homeowner what it's going to cost. You turn around and you do not share that number with the contractor. You the contractor, say what they think it's worth and can make money doing, and then you guys make up the difference. And over time, as you learn, we were right here or wrong here, you're like adjusting what you understand. But the contractor has that flexibility. And if they're the right price at the right time, they get it. But they're not subject to a rate card or prevailing wage or anything like that.
[00:17:25] Evan Anderson: Yeah. That's correct, that's right.
[00:17:27] Ed Smith: Wow. That's different from some other people operating in the space.
[00:17:30] Jake Yurek: And what we just think is, like, we can't actually deliver the value to the contractor if the job is not fully contracted and installed. And so that requires establishing a price before the contractor gets involved. And so I think that's how we landed at that model is we're trying to bring contractors jobs not leads.
[00:17:48] Eric Fitz: Got it. And then I just have to ask this question what happens. So you've priced it. You've told the homeowner is a $20,000 job, and then you get a bid that comes in at 17 K. What happens with that delta between what the contractor is saying it's going to cost versus the price that you presented to the homeowner.
[00:18:06] Evan Anderson: That delta is where we make money to cover the field operation. And the converse scenario where we say 20 and it's 23. It's just a bad day to be Pearl Addison. But so many of our partners have had direct exposure in weatherization programs or other fixed rate referral that perpetuate a race to the bottom and perpetuate low quality install. And we don't want to operate that way. So we view the exchange as valuable source of information on what the market price is to do a really great job with the scope of work we've laid out.
[00:18:36] Eric Fitz: Got it? Fascinating.
[00:18:38] Ed Smith: So now that I have my head wrapped around the business model, which is super intriguing, how are you guys doing any like willing to share any stats on how big you are, where you are, how many jobs you've done, like any of that sort of stuff. I'm just fascinated, like, how's it going so far?
[00:18:51] Evan Anderson: Yeah, definitely. I'd say how we're doing right now is we're growing at a rate that's really a good strain. There's a lot of growth from it in terms of the product and our workflows and all that. We launched in Michigan between DTE and Ann Arbor in the late part of, I guess, really early second quarter of this year. And then we launched in Pennsylvania with Duquesne Light in the late part of the second quarter. We've got about 50 installs under our belt, and a lot more than that in process right now. And as I'm sure you guys can appreciate the leap from where we are to where we're going involves a lot of really good growth for every member of our team.
[00:19:27] Jake Yurek: It's a step change time period where the ramp up is truly upon us. And I would say that in some ways, it's like we have an opportunity to really show a lot of value to the contractors that we're working with here in the next few months, just because a lot of projects are going to be able to send them way and send them their way, which means that we can continue to deliver on the value prop that we've set out to bring to them.
[00:19:46] Eric Fitz: We've had a number of conversations with folks, and generally as each time you double in sort of the volume of customers or whatever system it is, you got to rethink a lot of your tooling and process. And that's going to be challenging to scale from those first 50 to get to the 100. And from there, it's great that you guys are growing.
[00:20:05] Ed Smith: Everything breaks every time you double. So one more on the what is the feedback from because most of our audience is contractors. What's the feedback from contractors working with you guys so far?
[00:20:15] Jake Yurek: I would say that the concept of fully designed install already job like really resonates upfront. There's I think contractors know, like how much of their cost structure goes into like customer acquisition. So whether it's marketing or commission that's paid to sales tax or just the cost of a truck to a house, it's like there's a lot of costs there that they they can see the value in having a job that is fully designed and ready to go and can supplement the work that they're already doing. And so I think that, like the feedback from contractors across the board that we've been working with in our early geographies has been positive, for sure. I'd say if anything, like we do require a slight change in workflow, right? Like it takes, especially for the first couple of jobs. It's like it takes a leap of faith to say, I'm not gonna go to the house and look at this with my own two eyes before saying, this is what I think the project costs. And so, like, we know that there's a transition period there and like, work with folks to get them comfortable that like, we're doing our homework and have the interest of, we're going to scope out this job the right way so that when you get there, there are no surprises that we haven't already discussed with you on site.
[00:21:15] Jake Yurek: And even if there are, you have protection to make sure that at the end of the day, you aren't holding the bag. And so I think we're like trying to be contractor focused on purpose in the sense that we know that the change in process is real, and we want to make it as easy as for folks to build a relationship with us as possible. I often say early on in relationships with contractors is like the best way to get to know about how to work with someone is to do a first job or two together. It's like that tells you a lot about things. And so we try to be active in communication early on and just make sure that they know that we're here to try to solve their problems, not create them for them.
[00:21:45] Ed Smith: Great answer.
[00:21:45] Eric Fitz: So there's one more piece of the business model that I'm still curious about. So you have this relationship with DTE energy as an example. Is there any monetary exchange there? Like how does that partnership play out? Is there revenue that's coming from that relationship as well?
[00:22:02] Evan Anderson: It's a great question. So there's no money from us to DTE or DTE to us. Same is true of our other partnerships. Their goal to paint in broad strokes is either, hey, we've got a regulated energy efficiency target to achieve a very high percentage of the energy consumption in this home relates to the HVAC system in it. We ought to be involved in trying to facilitate more of these projects, or they're trying to drive load growth, as with the propane to electric example that I shared earlier. And so that's where the commercial benefit comes in for some of our partners. Others, it's just their mission like City of Ann Arbor just wants more heat pumps in, I think, where a lot of them historically have been dissuaded from taking more of a closely involved approach to these projects, is you don't want a negative customer experience to reflect back on your brand. And so I think where they see value in what we do is let's try to guardrail the quality of the information that the customer receives on costs and benefits. Let's try to guardrail the quality of the system design. Let's only work with really great contractors that are committed to winning on quality, and let's give them really good guidance and job documentation to plan a job well. And so most of what we do, we view as about heading off risks for that stakeholder because their ability to reach lots of people and reach them from a position of trust is one of the things that brings down the acquisition cost for our contractor partners.
[00:23:23] Eric Fitz: Got it. Okay. So the utility, whether it's there, have a regulatory requirement through their energy efficiency program. They've got their own reasons why they want to drive these projects. And they view working with Pearl Edison as a way to have the best outcomes, higher volume. Just good things happen versus conventional methods of changing the rate base and the built environment. However they've done in the past. That makes sense.
[00:23:51] Jake Yurek: Yeah, I would just say put differently is like we're just trying to help them achieve their goals in the energy efficiency space.
[00:23:56] Ed Smith: Got it. All right. You guys said something super interesting before, which is the Brynn Cooksey expertise, right? Like just that like that is the limiting factor. And you've mentioned about some of your software, which we're software companies. So I'm dying to know as much as you're willing to share. What are you building to relieve that bottleneck on the system?
[00:24:17] Evan Anderson: Yeah, definitely. We'll talk specifically about the home assessment process, because that, I think, is probably the biggest thing in terms of bringing leverage to expertise in the home. We're mostly just trying to apply best practices that someone else already invented. So we plug in a lot of diagnostic tooling. We didn't build and interpret outputs according to protocols we didn't write. And a lot of the software that we're building is just guided workflows for this person that has some training, but isn't a mechanical expert to elevate all of the right information to a brain. Cooksey. And so they're going to go in and in a guided workflow, characterize the rim joist insulation. They're going to go in and they're going to produce diagnostic test results on the airflow. And that system's going to interpret them for them in terms of how they advise the homeowner on, am I going to need to modify ductwork? We're largely just trying to apply best practices we didn't invent and make it easier for an industrious but not mechanically expert team member to get through that process so that what lands on the lap of the Bryn Cooksey expert is really helpful and helps them to make sure that we design the system properly, and the documentation that goes to the contractor is really good.
[00:25:32] Eric Fitz: So you're designing those workflows, you're building that logic, you know, those rules as part of those guided workflows. And that's like the secret sauce, the magic of your home assessment workflow.
[00:25:42] Evan Anderson: Overall, I don't even think secret sauce might be too strong. It's largely just trying to preserve the time of that human expert for the thing that requires their judgment. If they don't need to be using their brain to figure out, hey, we need supplemental dehumidifier based on this load, and that's something we can enforce in a workflow. That's great because they're going to be a million things you can't control for in that workflow that they need to go solve, if that makes sense.
[00:26:04] Ed Smith: So the secret sauce is just ketchup in mayo, but you got to mix it together in the right ratio to get its taste just right.
[00:26:12] Jake Yurek: Totally. And I just add is like part of the right workflow. Allow us to be much more flexible when advising homeowners later. And to give you like an example is we recently had a homeowner in Michigan reach out to the platform with the intention of their AC was broken, and their intention was to get a heat pump. And they said, I want to see if I can get a heat pump supplement my existing furnace. That's still working fine, like I don't want to get rid of it. We when we did our home assessment, we did some airflow testing and found that their ducts had enough capacity for a three ton heat pump. And because our platform upfront had shown them the cost of an all electric system design and the rebates that were available to them, all of a sudden they realized that the cost of going all electric from an upfront cost perspective would have been about at parity of what it would be to just add a heat pump to their existing furnace. And so because we did went to the house, we did diagnostic testing, understood their ducts. It was much easier to have a conversation with them about the trade offs between adding a heat pump that was sized to their cooling load and would supplement their existing furnace, or putting in an all electric system that would cover their heating load, and we had the information to make that follow up conversation a lot more straightforward. And the homeowner felt like they were advised, well, because they had quick information on what the upfront cost was, what the rebates were available, and whether or not the system would work for their home by getting all the right information. When we were in the house, evaluating a bunch of different options for them, for a homeowner who's considering different trade offs becomes a lot more straightforward.
[00:27:29] Eric Fitz: I love this, and I feel like we've seen in our time, we've had a lot of conversations with contractors and seeing a lot of the different, I'll say, checklists, workflows, spreadsheets that each individual company have created to try to figure this out for their own business. And some of them are great. Some of them are not so great, but it's crazy that each individual company is inventing their own, reinventing the wheel in many ways of how to triage a home and assess these different aspects and figure out, okay, if this, then that, and just makes a ton of sense that you guys are trying to codify this knowledge from your experience working with contractors and really focus on that critical piece so that everybody, the whole the markets you're working in can benefit from this shared expertise instead of having the maybe there's one company in Michigan that really has their workflow dialed, and a lot of other ones don't.
[00:28:25] Evan Anderson: Totally. And the good ideas about workflow are not proprietary to us. The best thing about working with contractors is when we get it wrong, they let us know loud and clear. So we focus every day on how do we make these workflows and these heuristics better to make life easier for our expert and ultimately our partners.
[00:28:41] Ed Smith: If you guys take this through to one piece of software that comprise the job in this realm of like home performance contractor, you will have delivered the software holy grail that I think was the talk of the Building Performance Institute national event in New Orleans a couple of months ago. This is like we've talked to a ton of people, like they're all trying to solve this. And it's just the market isn't quite big enough to have warranted, like a nice piece of software as a service, but you're tackling a problem that is very much top of mind for a heck of a lot of contractors.
[00:29:12] Evan Anderson: It's a fun one, for sure.
[00:29:13] Ed Smith: Jake and Evan, you guys have put out some, like, really cool thought pieces, and Brynn talked about when you guys wrote together when he was on our pod a couple episodes ago. But you've got this one on heat pump 1.0 versus heat .2.0, and this has been referenced a ton. And I will admit, I did not fully know the story of Heat Pump 1.0 and how that fell on its face. Would you guys tell us the history you set the stage like what happened with heat pumps in the 80s and 90s and what should happen now?
[00:29:41] Evan Anderson: We use Heat pump 1.0 to refer to the this period where heat pumps are starting to go in in cold or moderate climates for the first time. And frankly, it didn't go well. There were too many poorly installed heat pumps. There were too many heat pumps installed that probably weren't fit for purpose based on the use case that they were installed for. And we believe that continues to impact the way that the market contractors and homeowners perceive heat pumps today. And obviously, I think all your listeners are aware, very different time. The technology is so much better. There is a heat pump that's fit for purpose in virtually every home. Definitely true in the Rust Belt climates we're in every day. But there are other things that are not different. There's still an install quality problem, and if anything, this new and better equipment is less resilient against some of the problems that flow from poor install quality. And then I think, as importantly, when it comes to the economics, as the price of electricity goes up relative to gas, a lot of those efficiency gains are wiped out just purely from an economic standpoint, which just has to impact the way that we all. I think as an industry, talk about this to the homeowners and characterize the benefits.
[00:30:51] Ed Smith: That was a great explanation overall. Was it the equipment? Was it everything that went into it in the 80s and 90s, or was there something more systemic going on?
[00:31:02] Evan Anderson: So there's a link in what we wrote that I think would be worth getting out to your listeners. But it's a montage of old ads run largely by natural gas utilities, and you can use those to see what messaging they determined was going to resonate with the customers that they were serving. And it's a lot of this is inferior heat. If your furnace is a toaster, like this is soggy bread. There's a lot of focus on economics. And I think our perspective after digging into why that is, is that it's a mix of, hey, if we're going to swap out a natural gas furnace for what at that time was a mid efficiency heat pump that did not work at very low temperatures. Have you evaluated the use case properly and have you explained the trade offs to your customer? And then separately, I think for all the terrible things about a single stage furnace, that thing is going to crank against high static pressure on cycle and cycle. And you might not be super comfortable, but you're probably not so deeply uncomfortable that you're going to notice. And if you do an equivalently bad job with objectively better equipment, the result just doesn't feel good to customers. So that's been our little investigation into what happened there and informs a lot of how we approach what we're doing now to try to avoid a similar scenario.
[00:32:19] Jake Yurek: You see a furnace that's still cranking and it's a model from 1983, and you ask the homeowner, have you had any comfort issues? And they say, no, it's been fine. It's like they many folks have had good experiences with different types of equipment. And if we're going to make the transition to something new, it's pretty easy to poison the well pretty quickly with friends and neighbors. If you put something new in that doesn't work as well as their old thing. And so I think one of the things we just think about is part of the goal of having the right system design for each house is to make sure that poor installs don't change the perspective on heat pumps that we're already working so hard to change.
[00:32:52] Ed Smith: Yeah, Russ King, who runs Quick model has got a line about the great heat pump revolt of put the year on it 2026, 2027 whatever it's going to be. But how do we avoid that? Which is what I hear you guys saying. One of the things Evan you hit on was this the spread between natural gas and electricity prices. How did you guys communicate efficiency, savings, economics to homeowners? I've heard the gamut of, yeah, some contractors are like, you're going to save a ton of money and some contracts. I don't touch that topic with a ten foot pole because I have no idea, and I don't want to call back later. So how do you guys tackle that topic with homeowners?
[00:33:31] Evan Anderson: Yeah, I think the response of it depends, frankly, a lot of times is a lot more responsible than what what some in this space do where they're painting with a broad brush around savings. I think the most important thing is that when you're characterizing this to homeowners, you have the requisite information to provide information that's specific to them. So if we know that you have 80% Propane furnace. And we know that we're going to put in a Mitsubishi top of the line model to replace it. We can be pretty specific with you about what you're going to save. If you don't have that information. Someone's cold called you on the phone, which a lot of contractors experience. It's very difficult to be helpful. I think the other piece of this is we just try to contextualize the benefits of the project in terms of what the customer says that they want, and then give them accurate information. So if you come to us focused on savings, you're probably going to end up in a conversation about dual fuel. And we're going to be talking to you about mitigating some of the heating load, but not all. If you come to us talking about I want premium comfort, I want to be all electric. I want to cap the gas line. We're going to have a different conversation. But both of them need to be grounded in real techno economic analysis so that people get reasonably accurate information, not broad strokes.
[00:34:45] Jake Yurek: Just like to add one thing, there is part of the reason that we provide an instant estimate is to help folks to start to understand the trade offs. Someone comes and says, our goal in this House is to cap the gas line. Like what they're trying to figure out when they ask about economics is like, how much is it going to cost me extra in Michigan, for example, or in Pennsylvania to put in an all electric system? In that case, answer that is relatively grounded in fact for their home, but a range is enough to help them make that early decision that, yes, I want to explore an all electric system further. Then there's a more detailed answer that we can get into later, after we've locked down a lot of those specifics that says within this range, we think you're more likely to fall here. But I think that part of what we're trying to do is help folks understand the trade offs up front, because if you say to some homeowners, your utility bills are going to go up, if you install an all electric system, that's categorically I don't want to consider that. And that's okay. We don't want to spend time designing an all electric system if the homeowner is never going to go down that path. And so it's different information at different times, grounded in the information that we have at the moment. But a lot of times folks just want an answer that gives them direction on what they should choose.
[00:35:46] Eric Fitz: Yes. And that's so helpful having the right information at the right time. It really allows. It empowers the homeowner to be part of the process, engaging it in a way that's productive for them. It also avoids a situation where they have some kind of expectations, and then they're talking to a contractor and they realize, like at that everybody's time has been wasted because they both either party misunderstood what the goals were, what the constraints are, what's the reality of their home or their budget or whatever else is happening. That's a that's either like a physical constraint, a technical constraint, or a sort of more qualitative goal that the homeowner is trying to achieve. That's great. And I think you answered this, but I think it's worth taking a moment on it. Why do you believe that sort of heat pump 2.0 is going to be different relative to the 1.0 scenario?
[00:36:38] Evan Anderson: Honestly, a big reason for confidence in that is proximity and exposure to the types of conversations you facilitate on this podcast. There are just a lot of very Sophisticated, smart people working on solving these problems. I'll throw my hand up and say, I can't categorically say that wasn't happening in 1990, but I somewhat doubt it. I think the first step in avoiding a repetition of history is understanding it. And I think a lot of the practitioners that comprise your listeners already know exactly what we're talking about. The challenging thing is just how do we make that the 90% that understand, not the 10%? It's a lot of work that goes into that work, like what you guys are doing, like what Brin's doing in the training world. Like what we're doing. That's the real challenge that I think will determine whether the great heat pump revolt of 2026 truly comes to fruition or not.
[00:37:26] Ed Smith: Flattery will get you everywhere. Evan. Great answer. Jake. Anything to add to that?
[00:37:30] Jake Yurek: I would say like we're this is the challenge of the decade, right? Making sure that this doesn't happen. And so that's a lot of the work we're doing, is to try to make sure that 2.0 is successful.
[00:37:39] Ed Smith: Cool. All right, Jake and Evan, awesome to chat with you guys. I don't know about your guys experience, but Eric and I have been incredibly lucky that when one of us is down, the other one is having it up moment and we just oscillate that way. And so inevitably, we're having conversations between the two of us, where one of us is worried about something that's keeping us up at night, and the other one is super optimistic for you guys, for Pearl Edison, what's keeping you up at night and what's got you super optimistic.
[00:38:05] Evan Anderson: First of all, that observation about one co-founder lifting the other is so true. When people ask me at least about starting a business, usually response is some version of I don't really have any idea whether that's a good idea. I do know that you need a second in this, because otherwise you're gonna you're gonna fall apart.
[00:38:22] Ed Smith: Totally.
[00:38:23] Evan Anderson: It's just too hard. We talked a little bit about what's keeping us up at night, and in terms of trying to scale, to meet the moment and making sure we bring in really great people and continue to push feedback into our own workflows as we encounter things that we're not doing perfectly and get the feedback. So I'd say that's the thing we're working on most manically right now. I think if you expand that to the big picture, there's a lot of money about to flow from states, I guess, through states, from the federal government that'll go into heat pump projects. And we're really hoping as that's implemented, that's a force for good in the heat pump, 1.02.0 spectrum and not a force for negative customer experiences. I think the jury's still out. So scaling challenges for us. Lots of funny money for the industry. It's an interesting time.
[00:39:11] Ed Smith: Yeah. You guys have that great phrase in that article you wrote with Brant on heat pump cowboys. And like the sort of the behavior the sugar rush of these rebates can drive and that's can lead to incentives, can be perverse. Great answer.
[00:39:25] Jake Yurek: What I'd add is something that we're excited about is I think that in general, homeowners can be overwhelmed by complex energy efficiency retrofits, like whether it's a heat pump install or other projects for their homes is, I think, looking to get better advice up front as they make decisions is something that, like we see across the board, is like homeowners, really. And so it feels like the direction in terms of helping homeowners evaluate tradeoffs and make decisions for their home is something that really resonates with them. I think for in terms of what we're focusing on, every day is like making the experience good for contractors in terms of jobs that are well designed, clearly communicated, install ready and can go smoothly. Because if we can do that, we can help them add to the top line of their business and worry less about things like marketing, which I think many contractors that we talked to just would rather focus on installs and getting the right systems into the homes of the folks that they work with.
[00:40:15] Ed Smith: So it seems like top line and bottom line, if you scope it right and there's no surprises like those surprises, a three day job turns into a five day job and you're suddenly upside down, right? So it feels like you could impact both, for sure.
[00:40:27] Jake Yurek: There's a lot of edge cases, a lot of things to to build out to make it smoother across the board. But that's like the fun of being in homes every single day is that there's always something new. And as Evan said, build into our workflow to make sure that the second time we see something, it's handled in the way that we want it to be handled going forward.
[00:40:43] Eric Fitz: Nice I like that, so. Edge case is both. They keep you up at night. But they also they keep it exciting. Keep the learning happening. Yeah it's good.
[00:40:50] Evan Anderson: Yeah. It's the fun part.
[00:40:51] Ed Smith: Every sword cuts both ways.
[00:40:53] Eric Fitz: Guys, this has been super fun. We always like to ask. From your own experience working in this space. What key resources people that you've met? What can you recommend to other heat pump entrepreneurs? Whether it's someone thinking about starting a software business or it's a contractor just getting off the ground? What advice can you share?
[00:41:15] Evan Anderson: I think the single biggest thing that I would recommend if you're not already doing it, is investing in training for your team in an applied setting, not a classroom or online setting. On heat pump best practices around installation and commissioning. It's been an incredibly valuable resource to us. It's been an incredibly valuable resource to the contractor partners that we work with. That is not our business. But people like Brin have built a business. Doing a really good job of this for folks. So that's the one that's been most impactful for us, is probably just walk the talk on getting people trained.
[00:41:51] Ed Smith: It's great. Awesome, guys, it has been so cool to hear about your business to get to know you both. Thank you so much for joining us on the Heat Pump podcast.
[00:41:59] Jake Yurek: Thanks for having.
[00:42:01] Eric Fitz: Thanks for listening to the Heat pump podcast. It is a production of Amply Energy, and just a reminder that the opinions voiced were those of our guests or us, depending on who was talking. If you like what you've heard and haven't subscribed, please subscribe on your favorite podcast platform. We'd love to hear from you, so feel free to reach out! You can reach us once again at hello@amply.energy thanks a lot.