Kit Wu and Hannan Rhodes didn't come from HVAC. Kit studied economics at Harvard and worked in data science and fusion energy supply chain. Hannan spent two years as a director of solar technology at a solar installer and has a background in software engineering. Two years ago, they started asking a simple question from their apartment in Cambridge, Massachusetts: how much should a heat pump installation actually cost? The answers they found — and published — made a lot of people uncomfortable.
Since then, they've co-founded Laminar Collective, a research group, and Manatee Energy, a heat pump design and installation business they spun up to deepen their understanding of what it actually takes to get systems in homes. They've facilitated over 150 installations, published detailed cost breakdowns, and built an audience of 1,500 homeowners and researchers following their work. On this episode of The Heat Pump Podcast, we dig into what they found — and what it means for contractors who do quality work but struggle to communicate it.
It started on Reddit. Kit collected 15 quotes from different contractors for the same Mitsubishi system on the same single-family home, gathered within a two-week window to control for seasonal pricing shifts. The result: a spread from $15,000 to $30,000 for what was essentially the same installation.
The post blew up. Kit and Hannan followed it with additional benchmarks — 23 quotes for a colonial in Malden, another batch gathered during a summer heat wave in Wakefield that ranged from $20,000 to $44,000. For many homeowners, it was the first time they'd seen real pricing data from their own market. For contractors, it was either a validation or a wake-up call, depending on where they landed on the spreadsheet.
After publishing the benchmarks, Kit and Hannan wanted to understand what was driving the spread. So they started managing installations themselves — procuring materials, coordinating with subcontractors, tracking every line item. What they found was clarifying.
For a typical single-family colonial with second-floor ductwork and first-floor mini splits, roughly half the total cost is physical materials. As Kit put it on the show, even if you had a magic genie who could install everything instantaneously, you'd still be paying around $15,000 just for equipment and consumables. Layer on labor, electrical work, permitting, logistics, and a reasonable reserve for a seasonal business, and the numbers start making sense — if you explain them.
The problem, Kit argued, isn't that contractors charge too much. It's that most companies don't break down the "why" behind the price. And that vacuum of information is where consumer frustration lives.
The other major factor: private equity consolidation. In the Boston metro area, one PE-backed entity has acquired over a dozen local HVAC companies, each of which keeps its original name and branding. Hannan pointed out what that means in practice: a homeowner who calls three companies for quotes may be calling the same corporate parent three times without knowing it. The "get three quotes" rule only works when the quotes are actually independent.
The most actionable moment of the conversation came from Hannan. After walking through dozens of installations and talking to contractors across the market, he's noticed a pattern: the contractors who invest the most in training, design, and quality are often the worst at making that visible to homeowners.
They pay their people well. They put real thought into system design. They pull every permit. But when a homeowner looks at their quote, their website, or sits through their walkthrough, none of that comes through. The interaction feels rushed — focused on closing, not educating. Meanwhile, the homeowner is sitting there with three quotes and no way to tell who actually knows what they're doing.
Hannan's message to contractors was direct: if you put pride into your work, make it front and center. Put it on your quote. Put it on your website. Talk about it during the walkthrough. The homeowner can't value what they can't see.
Kit and Hannan aren't from this industry. They see the market the way homeowners do, which is something contractors can easily lose sight of after years in the trade. Their core finding won't surprise good contractors: homeowners don't go to the cheapest quote. They go to the contractor who helps them understand what they're paying for. Transparency isn't a threat to quality work — it's the best thing that ever happened to it.
Here are six more takeaways from the conversation:
Two out of every three quotes go nowhere. Hannan pointed out that if homeowners get a minimum of three quotes, two of those contractors are doing walkthroughs, design work, and proposals that never convert. That wasted effort is baked into every contractor's overhead — and ultimately into the price. Any tool or process that reduces that waste benefits both sides.
The "I don't want to do this" price is real — and it's legitimate. Kit and Hannan learned that contractors sometimes price high not because they're gouging, but because they're booked, the project is complex, or it's not a fit for their crew. As Hannan put it, that's the magic and artistry of running a small business. It's not a market failure — it's how seasonal businesses manage capacity.
Remote diagnostics will change the game for quality verification. Kit predicted that within a few years, every heat pump OEM will have remote diagnostics built in from day one — allowing fleet managers or homeowners to verify that a system was installed and is operating correctly without a site visit. He noted that Daikin already has this running on over 300,000 units.
Show the adders upfront, not after the walkthrough. Manatee built a pricing menu that lists common adders — long line sets, third-floor access, complex electrical — before the homeowner ever schedules a site visit. Kit and Hannan said they've had exactly one person drop out after seeing adjusted pricing. Everyone else was fine with it because they understood why it cost more.
Software can get you 60% of the way to a system design before a site visit. Manatee's platform pulls from real estate data and homeowner inputs to generate a preliminary design and price estimate. The remaining 40% gets filled in during a walkthrough with a manual J load calculation. That front-end automation cuts the time and cost of the sales process for both the contractor and the homeowner.
Their goal is to become the Car and Driver of electrification. Laminar Collective is testing new equipment from multiple manufacturers — Mitsubishi, LG, Daikin, Midea — and publishing real-world performance data. Kit's vision is to be the independent, trusted review source that homeowners and contractors can use to evaluate what's actually working in the field.
[00:00] – Episode Teaser
[03:02] – Introduction to Laminar Collective and Manatee Energy
[04:44] – The Story Behind Laminar Collective and Manatee Energy
[07:46] – Insights from Heat Pump Pricing Research
[13:28] – Reddit Reactions, Contractor Pushback & Homeowner Transparency
[18:11] – Transparency Matters More Than Low Prices
[31:34] – Why They Started Manatee Energy
[33:17] – Overcoming the Challenges of Heat Pump Installations
[37:04] – The Future of HVAC: Remote Diagnostics & Smarter Systems
[40:22] – What’s Next for Laminar Collective & Manatee Energy
00:00:00.000 — 00:00:52.520 · Speaker 1
When we published this stuff on Reddit, overwhelmingly the reaction was, Holy smokes, this is ridiculous. These prices are crazy. And I think a lot of those companies that have been charging top dollar got visceral reactions in the comments saying, look, Sila charges way too much. And I think, frankly speaking, we are great.
Now, am I saying that Sila is not doing a good job? No, we're not saying that. All I'm saying is that, look, there are some people who are out there who want to buy a Lamborghini or a Maserati, and I'm not gonna stop them from buying a Lamborghini or a Maserati. But I think the people deserve to know who in the market is a little bit more like a Toyota or a Honda.
Affordable and reliable, right? And I think the reactions from the contracting base reveals a lot about how every single contractor sort of feels about themselves, but also their tactics and strategies for making sales to consumers.
00:00:56.440 — 00:02:41.030 · Speaker 3
Hey everyone. That was Kit Wu of Laminar Collective and Manatee Energy. As you could probably tell from that clip, Kit and his co-founder Hannan are outsiders who have gone deep enough into the world of heat pumps and contracting to be able to push some buttons. If you want a few of your buttons, push today. This is going to be a great episode. I'll say these buttons aren't pushed for no reason. They're going to make you think, how are you coming across to homeowners? Are you doing a good job communicating what makes you unique and does your pricing align with that? Now, if you're not in the mood to listen to someone who sounds like they've never turned a wrench, put their finger in a few wounds. Definitely turned this one off. But I'll say this for these guys they have turned wrenches. They got so much interest from the research that they actually stood up a heat pump design and installation business to continue their learnings, and I admire them for that. They're not from this industry, but they've done the hard work to earn an opinion on it.
Okay. Consider that your surgeon General's warning for this episode. If you keep listening, I hope you get something out of it. And before we jump in a quick ask if you're getting value from this podcast, please take five or 10s and leave us a five star rating on Apple, Spotify, YouTube, wherever you're listening. We make absolutely $0 from this. Eric and I do it because we love it, and we'd love to get it in the hands of a few more folks. So if you give us those five stars, it makes us shockingly huge difference for these fancy algorithms that surfaced new podcasts to other folks. All right. That's our one. Ask for you today. Let's get on with the episode. Enjoy this conversation with Kit Wu and Hannan Rhodes.
00:02:44.830 — 00:02:47.470 · Speaker 3
Hi and welcome to the Heat Pump Podcast. I'm Ed Smith.
00:02:47.470 — 00:02:50.350 · Speaker 4
And I'm Eric Fitz. We are co-founders of Amply Energy. Today,
00:02:50.350 — 00:02:58.470 · Speaker 3
we have Kit Wu and Hannan Rhodes of both Laminar Collective and Manatee Energy. Kit and Hannan, welcome.
00:02:58.470 — 00:02:59.710 · Speaker 1
Thanks for having us. Good to.
00:02:59.710 — 00:03:14.510 · Speaker 4
Be here. All right, guys, let's start with giving listeners just a little more context around the work you guys do. If you could give us like a 62nd explanation of laminar collective and then do the same thing for Manatee Energy, and then we can kind of unpack things from there.
00:03:14.550 — 00:04:15.220 · Speaker 1
Yeah, absolutely. So I'm Kit, I'm the founder of Laminar Collective and Hannan's my co-founder. Two years ago we started this research newsletter from Cambridge, Massachusetts, and we started publishing a lot of market data and information about heat pumps, because a lot of my neighbors were interested in getting a heat pump, and there was not a lot of information about heat pumps.
So since then we've been writing, we've been publishing, and we've accumulated maybe about 1500 people on our blog and newsletter. Now, at a certain point, we figured out that, well, if we really wanted to publish deep research, we actually have to start organizing and doing our own installations. And that's why we spun out Manatee Energy as an independent contracting entity as well as a software platform that Hannan is building all the time, and Manatee as a software platform is going to streamline these installations.
And the insights that we actually get from all of these heat pump installations goes right back into Laminar Collective as a research blog. Yeah, we figured out to.
00:04:15.220 — 00:04:28.100 · Speaker 5
Fully understand what it takes to be a contractor. We had to become one. And we're taking those learnings and also trying to create solutions, slash automations through software to see can we be more efficient and can we share those learnings with the industry.
00:04:28.260 — 00:04:45.740 · Speaker 1
It turns out that when you have 1500 people on your newsletter, you also have a lot of credibility when you talk to supply houses. So we've been able to leverage that to get better rates on equipment and consumables, and we pass those savings on to consumers. So you can think of us as a little bit of a research hospital.
00:04:45.780 — 00:05:16.580 · Speaker 3
Awesome. We have never had the heat pump equivalent of a research hospital on the podcast before. So I want to dig into like How this actually unfolded, though, was an excellent summary. So take us back to two years ago. You're hearing from neighbors lots of questions, like what kind of research did you actually start doing?
My first encounter with you all was your pricing research, which like made big waves. So take us back. Let's go deeper on the development arc you guys went through when you started out.
00:05:16.580 — 00:06:24.090 · Speaker 1
So two years ago I published this rather infamous benchmark on Reddit. I gathered maybe about 15 quotes from heat pump contractors for essentially the same system, in the same exact house. And if you've been in this industry, you know that there's really no hard pricing data out there. There's no good pricing data set.
This was the first benchmark that basically said it's the same apples to apples comparison. And the only difference here is what the contractor tells us in terms of pricing. And we found for this particular single house prices, anywhere from $15,000 all the way to $30,000. And that is a crazy, crazy phrase spread.
That particular Reddit post ended up blowing up, and we did more pricing benchmarks. The very next year. We did one with 23 pricing benchmarks for a single family colonial house, and then we finally did one in the middle of a heat wave. This was the first time that I feel like consumers got access to real pricing information in their local areas that could give them actionable insights on which contractors they work with.
Some contractors loved it. A lot of them had many hot takes to say about it.
00:06:24.090 — 00:06:32.930 · Speaker 3
Awesome. And so it's primarily focused on pricing when you do them on the heat wave. What was the spread for that pricing? You had 15 to 30 K for the first one. Would you have for the heat wave?
00:06:32.930 — 00:06:55.850 · Speaker 1
One I would say that for the heat wave one, this is a colonial single family home over Wakefield, and the price spread over there was between $20,000 and $44,000. So I think the big question behind all of this is why are the prices so high and why are they so random? And I've got an economics background, so I've always wanted to dig into that.
And I think we have some answers these days.
00:06:55.850 — 00:07:12.650 · Speaker 4
And I'm curious, can you talk more about. Was it really the same services that were being offered similar equipment? Like what other variables beyond just, hey people, throw in a price on a quote that you guys were looking at. When you're comparing across these different estimates that you got.
00:07:12.690 — 00:07:51.530 · Speaker 1
During these benchmarks, we tried to standardize the setup as much as possible. So because Mitsubishi is the market leader, I've typically told contractors, hey, can you give me a quote for Mitsubishi? Other times I've tried to make sure that I've nudged them during these particular walkthroughs to essentially give us the same setup, right?
So instead of having different numbers of condensers, I've tried to line everybody on the same number of condensers, but ultimately, I think we did a reasonably good job at removing all the varying factors, because all of these quotes we obtained usually during a two week timespan. So it's not like we're getting one quote in the spring and one quote in the fall.
These are narrowly controlled conditions.
00:07:51.530 — 00:08:07.690 · Speaker 3
Very cool. And we will provide links in the show notes to a bunch of these benchmarks you guys did and publications. All right. And Kit, you teased us with yeah. This question on why the spread. And you think you have some answers. What are the answers. What did you find.
00:08:07.730 — 00:09:21.440 · Speaker 1
So after two years of doing this research, I mean, the first question that we had was, why are the prices so high? And also why are the prices varying so much? And that led us down to a journey of actually managing installations ourselves, to find out exactly why we wanted to actually get data about how much consumables cost to purchase from supply houses, how much the supply houses were quoting people.
So we have all that information. And I think after two years of doing research in this area, I've got three general answers for you. The first one is, look, frankly speaking, contractors, even for the same exact house they run very different types of businesses, right? Some contractors might have a ton of overhead, and they're running a 50 person shop.
Other contractors are independent contractors that only have three people, four people, maybe five. And they have super low overhead. Maybe the 50 person company owns a warehouse somewhere and you've got to pay for that particular warehouse. Maybe the 50 person company decides to keep a larger reserve in case of slow seasons, because they have more people on payroll, and then maybe the smaller contractors don't decide to keep as much in reserves.
So even for the same exact.
00:09:21.440 — 00:09:25.720 · Speaker 3
Time and buy in reserves. You mean like inventory reserves or cash reserves?
00:09:25.760 — 00:10:25.000 · Speaker 1
Cash reserves? This is a highly seasonal business, and the amount of demand, when you compare the high season in the summer versus the slow season during the winter is dramatically different. So every single contractor can run their business in a different way. And that is without even considering what type of equipment they offer or what their specialties are.
So that's bucket number one. bucket. Number two, I would say, is that private equity has been acquiring a lot of contractors in the Boston metro area. Now, whatever your view is of private equity, the truth is that consolidation has been happening here in the Boston based area. Seller services is the big one.
I believe they were owned previously by Morgan Stanley and Goldman Sachs, and they have been on an acquisition spree in the past couple of years. Boston Standard, Netter Central Heating and Cooling and about a dozen other companies. Right. They've all been scooped up. And typically what we've seen is that when companies get acquired by private equity, the prices do go up.
That's bucket number two.
00:10:25.040 — 00:10:45.480 · Speaker 3
Actually on that one I asked a million questions on that one. But I remember from your benchmarks you had like 4 or 5 quotes from Scylla, all under different brand names. Right. And if you were just a standard homeowner, you would not have known those five quotes that have different names on them, but are actually all from the same corporate entity.
Yeah, yeah.
00:10:45.480 — 00:11:27.190 · Speaker 5
That's exactly right. And what we've seen that has been happening is one company like Selah would buy out all these locally owned shops and now own a complete territory. So if I'm a homeowner in Wakefield or Newton and I want to get three quotes, which is the average, right, we go to that stream and get 15 quotes.
But the normal usual homeowner wants three. You're calling the same company, so there really is no benefit anymore. That's sort of information. Edge is disappearing, and if a homeowner wants to get more than three quotes, that's a huge burden on them, right? They have to take time off of work. Be home at the same exact time that the comfort specialist can come in and assess their home.
That's a lot. So we're seeing that these prices are getting passed on to the homeowner. So we're trying to help that by making more transparency.
00:11:27.230 — 00:12:24.670 · Speaker 1
Very helpful I would say bucket number three is just this sense of randomness in the market. Because honestly we've talked to contractors before who otherwise would offer a good price. But for this particular season maybe they got a big commercial deal and now they're booked out for the rest of the season.
And because of that, you're going to have to offer them a much higher price to actually take the deal. In other cases, maybe a contractor is in your local neighborhood and they think that themselves. Well, I had a job maybe lined up two weeks from now, but then that person backed out and it's only two weeks until then.
And I actually would love to fill this particular week long gap for my crew. And sometimes they're willing to offer a better price, specifically if you can fill in that particular gap. So there are some random there's the sense of randomness that actually does happen inside this industry. Sometimes you never know if you're going to get a good deal.
And sometimes if you don't know if a contractor just gets completely booked out for an entire season.
00:12:24.790 — 00:12:38.510 · Speaker 5
Yeah, we learn the terminology a I'm busy price or I don't want to do this price, which sometimes people will give prices internally. They're like, I really don't want to do this, but if someone pays as much, then it's worth it. Which is totally fair for someone running a business, especially at a smaller shop.
00:12:38.510 — 00:13:04.790 · Speaker 4
And just to clarify that, like going to that example of I don't want to do this kind of price, is that more of what you are seeing? It's around this like scheduling challenge or is it more like, whoa, this is a really complicated project. It's going to take a bunch more labor. I need to get my I've got two different crews, and I need my most experienced crew to be on this one, and therefore I need to kind of have some more margin in there.
Can you get into that a bit more?
00:13:04.830 — 00:13:40.270 · Speaker 5
It could be a little bit of everything, honestly. And that is the magic and the artistry that these business owners do. We've heard of different reasons such as this is a very complex home, right? We're in the Boston metro area. This can be homes from 1830 to 1890. It could be hey, I know this homeowner probably is going to be very, very specific on what they want.
They're asking me to change three things by the end of the job, and that's margin they have to bake in. And the scheduling issue where usually if someone drops out, hey, you have crews that you have on payroll, you want to make sure that they're getting work done. So that will lower the price.
00:13:40.270 — 00:14:29.020 · Speaker 3
All right. I want to ask more about how Manatee came out of this, but I want to go a little deeper into some of these reactions first, because I remember when you guys did this and we're pretty darn tied into the contractor community. There were some people who were like, pretty psyched about how they came out looking in this comparison, and there were some people who were pissed, and I heard a couple be like, we are going to sue these guys.
This is not legal. So tell me more about the reactions to this from your 1500 person readership on Reddit, who I would assume are largely homeowners. And then tell me about the reactions you got from actually kind of interested in the ecosystem, reactions from homeowners, reactions from contractors, reactions from mass save folks who don't know.
That's our Massachusetts heat pump rebate program. Like, tell me about the constellation of reactions to this quite provocative several pieces of work you guys put out there.
00:14:29.060 — 00:16:59.330 · Speaker 1
Okay, here's the deal. I feel like I need to set the record straight over here. Number one, just for the record, 1500 people who are on our newsletter and blog love them. Boston metro area homeowners as well as researchers. But the reason that actually these posts are getting, I think collectively probably has like hundreds of thousands of views with a fair amount of people giving really heated takes.
When we publish these prices on Reddit, number one, right when we publish this stuff on Reddit, overwhelmingly the reaction was, Holy smokes, this is ridiculous. These prices are crazy. And I think a lot of those companies that have been charging top dollar got visceral reactions in the comments saying, look, Stella charges way too much.
And I think, frankly speaking, we agree. Now, am I saying that Selah is not doing a good job? No, we're not saying that. All I'm saying is that, look, there are some people who are out there who want to buy a Lamborghini or a maserati, and I'm not gonna stop them from buying a Lamborghini or a Maserati. But I think the people deserve to know who in the market is a little bit more like a Toyota or a Honda.
Affordable and reliable, right? And I think the reactions from the contracting base reveals a lot about how every single contractor sort of feels about themselves, but also their tactics and strategies for making sales to consumers. I think some contractors out there very much view them, view themselves as the Lamborghini in the market, and their sales teams also think to themselves, my goal is to get everybody to buy a Lamborghini.
And frankly speaking, that is not our goal. We do not share that goal here at Laminar Collective. I respect that they are offering that product in the market, but realistically, I think we need to get people to buy more Hondas and Toyotas because that's how we're going to get mass market adoption of this technology.
Some contractors love it. For the contractors we know who are sort of in that Toyota and Honda category. They were enthusiastic about it because they're getting leads, they're getting sales, they're getting business. I think I'm going to give it a shout out to one particularly good contractor here, and that Skywalker HVAC.
They're a good example of a boutique contractor who has been doing great work for years. And they run the small shop and they get business from this particular visibility all the time. On the other end, we've had contractors walk up to us in conferences and say, hey, when I saw this, I was really disappointed about you guys because we're not owned by private equity and we pay our people really well.
But that being said, we do get leads from you guys, so maybe not that bad.
00:16:59.370 — 00:17:17.770 · Speaker 5
Yeah. To rephrase it, they would. They literally said when we saw this, we hated you guys. But we've gotten more jobs because of this. Because, hey, there is a market for the people who want those Lamborghinis. And we show them, hey, this is where you are, right? This is not a fight to the bottom up for cost.
There's different price points for different people and we want to show that off.
00:17:18.130 — 00:17:51.320 · Speaker 1
Yeah. So I would say that's sort of the reaction between people as well as contractors. Overwhelmingly consumers like having price visibility. I'm sorry. You go to Angie. You go to any of these other websites like you barely get any pricing information. Right? People want to know how much people are charging before they buy what they're buying.
And I think we we're not saying that we're going to give you everything you need to know on a spreadsheet, but we are saying this is a really good resource to use when you start considering what's in your budget or not. And consumers love that.
00:17:51.600 — 00:18:17.960 · Speaker 5
Yeah, the people we want to help is the homeowner who says, hey, I want to be more comfortable. I care about the environment, and I want to make sure it's a cost effective alternative to oil and gas. And we want to make sure that they know if they get those three quotes from the same company, that's not the reality.
Like, no, there's way more options. There's way more people or way more companies to choose from. And you should know that choices out there you're not being stuck with, hey, heat pumps have to be $50,000. That's not the.
00:18:17.960 — 00:18:41.520 · Speaker 4
Case. So that's what I'm trying to figure out. So ultimately, at a high level, your goal is to provide. It sounds like because I'm gathering your goals to provide this more transparency around pricing, to help fight this perception that heat pumps are expensive, that doing these improvements are expensive.
Is that what you're like? This very high level kind of target you guys are trying to hit on or the why behind this work?
00:18:41.560 — 00:19:04.920 · Speaker 1
Yeah, that's exactly right. The fact of the matter is, imagine buying a car and not being able to see MSRP. And everything you see is a Maserati ad, right? Like or maybe like a Range Rover ad, you know what I mean? And all the billboards say, go get a Range Rover or every single billboard says you want to be in a Lamborghini or Ferrari, and next thing people are going to be like, I can't afford a car.
00:19:05.960 — 00:19:09.400 · Speaker 5
Totally. Now you have people with Range Rovers or walking. That's it.
00:19:09.440 — 00:19:15.280 · Speaker 1
Right. And I don't know what your opinion about a Range Rover is. Does it have a lot of those in Florida where you grow? Yep.
00:19:15.280 — 00:19:16.800 · Speaker 5
They have a lot of those where I grew up.
00:19:17.000 — 00:19:19.840 · Speaker 1
Oh my gosh. You see them in California. They're just really not out there.
00:19:19.960 — 00:19:21.120 · Speaker 5
Because they care about the market.
00:19:22.320 — 00:20:14.640 · Speaker 4
So I like that car analogy. Is is helpful because it's a very easy thing for us to like anchor our brains around. But my immediate pushback of like thinking about like the car is if it is a product and what you're delivering to a homeowner with a HVAC retrofit, like a heat pump. It is a whole complex solution.
It's a whole service. It's not a product purchase. And there are different things that different contractors are attuned to about what's going on in the home. That makes it more complicated, more labor intensive than other contractors may be aware of or care about. And so I just I would love to hear more about, like that aspect of like there shouldn't necessarily be a way to get like an apples to apples comparison that you can get with like a product based sale that's people are not delivering a product when they're doing a doing a heat pump install.
00:20:14.680 — 00:20:46.790 · Speaker 3
Let me build on that, because I was thinking about this analogy too. And I'm like, it's not like selling a Toyota versus a Maserati, right? Because you're all doing all Mitsubishi systems. It's like every contractor was delivering to the homeowner a Maserati engine, and then they were building the shell and frame around the car.
Right. And like, someone might have put in the Mitsubishi wireless thermostats and someone else might have left that out. It's like there's all these, like, nuances to it. So like the car analogy breaks down a little bit. So I'm curious in your reaction to that.
00:20:46.790 — 00:21:03.550 · Speaker 1
I think that's totally true for a certain class of installations here in Massachusetts. Now, everybody knows that Massachusetts is super, super old. And the houses here, I'm from California. Some of these houses are older than my state. Like, how is that even possible? It's very possible. Actually, California is pretty new in the whole scheme of things, but I.
00:21:03.550 — 00:21:07.710 · Speaker 3
Was going to say pretty much was invented after World War two. It's like pretty recent.
00:21:09.190 — 00:21:52.630 · Speaker 1
But I will say for the homes out there that are like Victorian houses that are difficult for line runs and you can't really put ductwork inside there. I can see a situation where you talk to five different contractors and you get five different proposals to sign wise. Maybe somebody says air to water and then maybe somebody else says, oh, actually you can do ductwork.
And then somebody else says, no way. You absolutely cannot do ductwork, please do ductless. So you can totally get buildings like that, but the buildings that we chose for the benchmarks. These are some of the most standard homes that you can find in Massachusetts. You talk to five contractors. They will probably give you five similar systems.
And I'm talking about highly similar. Right. Like five head mini split Ductless four triple decker. Right. There's really not much else you can install inside a triple decker.
00:21:52.670 — 00:23:31.660 · Speaker 5
You're right. You cannot compare direct product or product to product because there's a lot of thinking that goes into it. But I think of it as more of like what comes with that car, right? You could say, hey, I'm going to buy a Rolls-Royce. I know I'm going to get the best service imaginable. People are going to bring me into the showroom and I pick the paints.
They're going to make me feel all special about this, and I know it comes. All these little luxuries that come with the car. Or when you get a Honda or Toyota, you're not dating because of the price, right? I think we all here know that Honda and Toyota have reliability behind it. We know it because that is just what they're known for, right?
People who have Honda's from the from 98 or still drive it today. You're not just comparing like engine to engine to horsepower to horsepower. You're comparing also that lifespan that comes with it. And we found, oh, it actually does last as long as we need to. It does the job. But maybe it doesn't make me feel as special as Rolls-Royce does.
So that's where I would add to that analogy. I'd also say what we're trying to push for is transparency in the market. So we want contractors and installers who are prideful about taking consideration into their design and put it forward, put it front and center. Many people that we talk to that they know, hey, we're putting a lot of work into our design.
We're paying our guys well. We train them all day. We're like, where is that? That was not on your quote. That's not on your website when we were doing our walkthroughs and talking to you. You didn't talk about that. It's very much like, I want to sign you as fast as I can and get it in the house. So if you are a contractor who puts Prime to their work, I have nothing more but respect for you.
I think you should make that front and center.
00:23:31.660 — 00:23:33.180 · Speaker 3
It's a good call to action on.
00:23:33.380 — 00:24:54.290 · Speaker 4
Before we switch gears. The thing that's like in the back of my brain about this pricing, the focus on pricing, I worry, is that this makes homeowners focus on pricing as the thing that they should be most worried about. It also makes me concerned that that's what, like contractors are really going to focus on.
And like one thing that we have learned from the years kind of being in this space is that quality and doing proper design, all of these other factors are often are much, much more important than price like making. Yeah. Feeling confident that the person that you are going to work with, you're going to spend your hard earned money with, is going to do a great job and deliver comfort, deliver efficiency to your home and that it's going to last.
That company is going to exist for several hopefully the full life of the the project or maybe a decade, a decade and a half of the future to be available to service it or help you down the road. And so what do you guys and any of your research beyond this? Like very specific example we've been talking about, like what other elements came out that weren't related to pricing that you guys might share?
That helps me feel less worried that all you guys are care about is price.
00:24:54.690 — 00:27:02.250 · Speaker 1
You know what the secret is? Here's the secret. People are actually willing to pay higher prices. They're right. All these contractors that are just like you should pay higher prices, like people are actually willing to pay higher prices. The thing is, our conclusion is that, frankly speaking, a lot of companies just suck at conveying it, right?
Because once we started procuring our own materials for research purposes, we added up the numbers and for example, for a single family colonial house. If you want to do ductwork up on the second floor and mini splits on the bottom. Once, like we added the up the numbers for consumables and materials and everything else associated with it, we found that, frankly speaking, almost half of the cost is just physical material.
You wave a magic wand. If I had a genie in a bottle inside this phone booth right now, this cramped phone booth that was supposed to hold one person but actually tells two I could. And I asked that, genie, I want you to take this pile of material and instantaneously install all of it right now. I would still have to pay about $15,000 for the physical materials, even if I had a magical genie.
The moment that consumers can actually understand that, oh, I'm paying X half the price is physical materials. Then they start thinking to themselves, Okay, well, it makes sense that maybe 15% of the price is the procurement and the logistics it takes to actually get that materials to the house. And then a good portion goes to labor.
And by the way, electricians are expensive. So we list that too. And once you add up all the numbers like this and then factor in the fact that some companies need reserves because that's how you operate a reasonably good business. Like the numbers make sense, right? The homeowner will think to themselves, okay, I'm spending $30,000 on this thing, but I know where the money goes.
And it's not like half the money just goes into the owner's new boat.
00:27:02.610 — 00:28:33.600 · Speaker 5
Yeah, I can also add another answer. There of our concern is will it be erased to the bottom? And if that happens now you have hundreds of homes that have really crappy systems installed into them, and people are now really upset. What we found in our research and when we talk to homeowners is actually that's not the case.
People aren't really, really price sensitive. They just want to understand what's happening to their home and like, what's the cost associated with this install? Like, we've had many times people tell us like, hey, because you explain this to me, I don't care what you charge. Like, we've had that many, many times.
They're like, I'm willing to pay whatever you want. I just feel confident now that this system is going to be a good system. So it shows that most people are concerned about comfort and concern about reliability, especially what we found with parents of new children. Right. You want to make sure your child is going to be warm during the winter.
And if you come in and say, hey, you have a great deal, you have great rebates, sign right here. That really doesn't convey that at all. What we've also found with the contractors that we do talk to after we post our pricing benchmark, is people don't go to the cheapest person at all. They usually find the middle.
And we have comments around there of like, well, we think about the contractor. How was their walk through when we asked technical questions? How did they answer? And of course, there was a difference between they send a home comfort specialist who is there to close the deal versus a great tradesman slash installer who knows what he's doing.
But the sales on the side. So there's a difference. So that's what I would say.
00:28:33.640 — 00:28:57.800 · Speaker 4
I feel much better. I love those extra insights, that view that it's the price itself is not the problem. That's this vacuum of information that the homeowner is not understanding why what's behind that price, and that this importance of basically trusting and understanding what they're getting with that estimate, that's a huge gap.
And that's so that's fantastic. You guys are digging into that.
00:28:57.840 — 00:29:01.080 · Speaker 1
Look, I think I should give everybody a.
00:29:01.080 — 00:29:01.280 · Speaker 5
Little.
00:29:01.280 — 00:30:01.230 · Speaker 1
Slack here. Right? I think we're in a fairly unique position as a research organization to actually add up all the numbers and to report on it. If you're somebody who's a comfort specialist or a salesperson who just got hired by, like the big HVAC conglomerate down the road that displays a bunch of billboards during the summer, you probably do not have access to the company accounting books.
You do not have access to the financials of the company, and as a matter of fact, your company might be owned by a private equity firm, and the financials get rolled up into that higher level. So I feel like a lot of comfort specialists might not even have access to this data. But in our capacity with an audience, I think we're just trying to convey to people, hey, I can't speak for every single HVAC company out there, but for us, we've done nearly 100 installations at this point in the past two years.
And based on the average, this is what we're seeing right now. And here's our pricing. And if any other company prices somewhere around the prices that we post, you can expect that they might have roughly the same amount of breakdown.
00:30:01.590 — 00:30:43.310 · Speaker 5
Yep. Another fun story of the show. Your proof is we were at Ari. The was HVAC conference in Orlando, and some guy comes on one of our articles saying, quote, you guys are clowns who have never picked up a wrench before. These numbers don't make sense. You're not taking this to account. Not taking this to account.
And the first thing we want to say is like, okay, I appreciate you telling us where we messed up, where we're wrong. What's that counter? Can you explain to us? Never answered. We want answers. We want to show that the reason people are charging what they're charging is for a valid reason. So show it to us.
Show it to the customer if you want. Talk to us. We could then broadcast that out to customers. So show the proof.
00:30:43.310 — 00:30:54.230 · Speaker 1
I got something to say. For the record, this guy has an EPA 680 license. This guy is also a certified Herz raider. We have picked up wrenches. As a matter of fact, this guy knows how to use a digital micron gauge. That's right.
00:30:54.270 — 00:31:03.870 · Speaker 5
Like I've installed heat pumps now. I had to get it to fully understand the industry, right? I didn't want to be a clown who has never touched a wrench. I want to be a clown who did touch a wrench. And now that's where I am.
00:31:05.110 — 00:32:05.980 · Speaker 3
That's the title of the episode right there. All right, guys, I think it's one of the best articulations of the need and power of educating a homeowner. Much of what we focus on this podcast is the power of educating homeowners on the sort of building science. Why behind a design, I think needing to educate homeowners on the why behind the pricing.
Also quite powerful. I think in Kit you're right, there's a huge difference. Like if you were at a private equity roll up, you're not going to have access to the financials. But it's one of those things that differentiates the family run business from the private equity owned business. So but I want to dig in on this.
Hannan being a clown before who hadn't picked up a wrench and now was one who has. So let's talk about the creation of Manatee. Like I was impressed that after you guys had a few articles out there that did make waves, you went to this step. So tell me more about why and tell us more about what Manatee does and what you've learned from it.
00:32:05.980 — 00:33:22.740 · Speaker 5
So Manatee was created because my background was in commercial solar. I led a tech division in the solar company to optimize how they do things. The first thing I did was pretty much see that. Hey, you're looking to buy new land through Zillow, and there's one guy who's just going through Zillow all day.
That seems like a job for a computer. In two weeks, we built a piece of software that is able to look at all MLS listings and find optimal sites to build solar, that just increasing our pipeline by a certain percent. That was pretty good. My thought was seeing the same thing here in HVAC when we talked to contractors who did have massive overheads, which is that's what it takes to develop a company a lot.
That was inefficient, a lot of it. For example, if homeowners get minimum three quotes, that means two of every three quotes that you give out is not going to translate into a job. You're now spending time talking, driving out to the homeowner's house, walking around, doing an actual good system design, right?
I think that's also a big part of the cost goes into is making sure you have enough time and money to put it into a thoughtful system design that goes nowhere. It goes nowhere. So we created this platform to automate a lot of those steps. And that's where manatees sort of came out.
00:33:22.780 — 00:33:37.100 · Speaker 4
Got it. So it's a consumer goes to the Manatee website. And what happens from there. Tell us a little bit more about that process and kind of how the software side works, and then how that translates into an install that your team is doing.
00:33:37.140 — 00:35:01.610 · Speaker 5
Yeah. So based on everything that we learned from the year before of just walking through dozens of installations, talking to dozens of contractors, we had a pretty good sense of what type of logic goes into designing what system. And we found out, like, okay, if I implement that logic into a very simple algorithm, given all the information of someone's home that we could pull from real estate database, or just ask for the homeowner saying, hey, how many bathrooms do you have?
How many rooms do you have? What's your historical energy usage? We get a pretty good sense of what the optimal system will be. In our house. We found it's been around 60% accurate And the other 40% needs a little more information that we get on site. But what this allows is for people to see the price upfront, saying, here are how many heads you're most likely going to need.
This is how many condensers you're most likely going to need, and it looks good. Move forward with it. When you move forward, you insert more information about it, something that I think a conference specialist asked or would most likely take into consideration. But this reduces the friction and the waste of time that it takes to send out quotes and close jobs.
We found. At least in this, we think that's where the industry is going right now. Homeowners love it. They're like, I'm a busy person. I'm only free on the weekends when HVAC contractors don't work. So now who can I talk to? Pay back companies who do hire salespeople to work on the weekends. So it's been well received.
00:35:01.610 — 00:35:17.770 · Speaker 3
And a little more in the brass tacks. So you guys have built this thing that can give a 60% accurate answer up front. Are you guys the comfort specialist who's going for those 40% to get more information, or are you at that point handing it off to an HVAC contractor as a sub?
00:35:17.810 — 00:35:34.930 · Speaker 5
Well, to fully understand how this whole process works, we're doing it. So you see, kid and I go into people's homes using a very cool manual J app called ampullae to get an accurate thermal or heat low calculation of someone's home.
00:35:34.930 — 00:35:36.330 · Speaker 3
Thank you. Checks in the mail.
00:35:36.410 — 00:36:04.810 · Speaker 5
Yeah, I appreciate it. And that sort of finalizes all the details we need to know. And what we found is again, usually it's on point. If it's not, we tell the homeowner, hey, it's going to change by this much. We have a pricing menu. Right. You went into or we talked about when a contractor goes to a home and finds all these little things that is going to require extra work or extra overhead, we have that already calculated and shown to a homeowner.
So when we say, hey, we're example of like hard orders.
00:36:04.850 — 00:36:08.130 · Speaker 1
You're on a third floor of a triple decker and the line set needs to be long.
00:36:08.610 — 00:36:30.920 · Speaker 5
Yeah, you're taking the risk for your contractors as well. That's going gonna be an adder, but we show it on a little menu. We feel like this is what's going to be if your house falls into any of these little adders, we're going to add it. And it didn't. We found that. I think we only had one person who ever dropped out saying, oh, okay, that's what I thought.
I'm okay. Everyone else has been totally okay with it because we're transparent. We're like, this is why it costs more.
00:36:30.920 — 00:36:41.760 · Speaker 3
And are you guys also doing the install? I know you've done some, but is that like your business model now or are you like, now we know enough how to price it. We hand off the install or you guys have an install team.
00:36:41.760 — 00:36:48.480 · Speaker 1
That's right. Welcome to Hainan HVAC company where Hainan will personally install every single one of your HVAC systems.
00:36:48.520 — 00:36:53.120 · Speaker 5
We're called clowns with wrenches. We know we come with red noses and we come with big hair.
00:36:53.480 — 00:37:15.440 · Speaker 1
No, in reality, we've vetted a lot of contractors. I think, as you know, we have talked to dozens and dozens of contractors. And after having talked to multiple dozens of contractors, we have vetted and selected maybe about three contractors who we believe are highly reliable. And we've consistently worked with them throughout the year.
So it's a super small subcontracting network.
00:37:15.480 — 00:37:35.280 · Speaker 4
Got it. Very cool. So you guys do the preliminary pricing. You help with the load calculation. And then at that point, if the pricing looks right, everything is locked in, you hand it off to one of these 2 or 3 highly vetted partners that you're working with. And they do the full install, the commissioning and everything else.
00:37:35.320 — 00:37:57.120 · Speaker 5
Yeah. And we sort of we tried laying down the guidelines of what we expect for a good install. We have an internal checklist that we borrowed from the PNL has a great open source, like this is what you need to record and make sure that the system is going to be operated efficiently and lasts a long time. And we're there almost every day for most installs.
We're there for day one and the last day.
00:37:57.200 — 00:39:07.320 · Speaker 1
Can I tell you what's hard about that? I mean, everybody's thinking the same thing right now. Well, if you're working with different teams, how are you sure that the systems are actually installed properly? Well, my answer to you is we actually show up for the first couple dozen installations that any one of these installation crews do.
And then we sit on launcher. We watch them as they do the pressure test. I'm kidding. We don't. But we will actually show up to the first couple. Like we are personally showing up to these installations for the first couple of dozen, until we verify that these are actually teens that know what they're doing.
But my hot take is that in a couple of years, every single heat pump OEM is going to have remote diagnostics built into their heat pumps from the start, so that every single system that turns on can be verified, that they are working and installed correctly, directly tied to either a fleet manager or homeowner's phone.
Of course, there are a couple of startups that are specializing in that, but I would like to say on this particular podcast that we found out that Daikin of all OEMs actually has had this going for 300, 000 plus units across the United States. So look, if they can is doing it, I think everybody's going to be doing it soon.
00:39:07.360 — 00:39:43.030 · Speaker 5
Yeah. And that goes to our belief of like, at least I think technology is going to help this industry a lot. Similar to what Apple is doing with manual JS, what Navy Pipe Expander has done for making pressure fittings a lot more standardized and a lot stronger. I think similar similarly will be done with OEMs.
And just the health telemetry saying like, okay, is the pressure good? Is the line in, line out? Temperature is good. You don't send someone out every time something is a little weird to know if something's wrong. Now you look at your app, it's getting sent in via a connected device. Boom. You know what's happening.
00:39:43.070 — 00:40:09.630 · Speaker 4
So yeah, there's this world with this idea of self commissioning, self diagnostics. You know, there's sensors on the indoor unit. You've got all the sensors on the outdoor unit, you've got all your pressures, all your temperatures, all your air flows. You can do real time copy analysis. You can understand what's the delta T and every part of the system and verify that it's actually meeting the specs that the the testing that was done in the laboratory was expected given the current conditions in this exact home.
00:40:09.670 — 00:40:34.190 · Speaker 5
Is that we love data, so the more data we have, the happier we are. And we know that most manufacturers like for example, LG, they are recording all of these sensor data within the unit. You come on, if you're servicing the unit, you come on with the searching tool, plug it in and you see all the information.
Just get that to be streamed out somewhere. And now you're much leaner and higher. Operationally advanced installer.
00:40:34.230 — 00:40:47.350 · Speaker 3
All right. So this has been fascinating to get the journey the insights the decisions you guys made. What is the next 12 to 24 months look like for laminar slash manatee.
00:40:47.350 — 00:41:59.940 · Speaker 1
There's going to be a lot of experimentation I'll tell you that. We're going to do more installations. And the worker can experiment on the latest cutting edge equipment. Now when I first started Laminar Collective, I definitely wanted to make it affordable for people to install heat pumps. But now with the amount of installations that we're handling and the amount of control that we have over these installations, we find it possible to actually take new products in the market and deploy them out in the field and then report on them.
So there are really cool startups out there, such as, for example, Reservoir Collar Systems. They're building new heat pump water heaters. And reservoir in particular has remote diagnostics. You've got every single heat pump manufacturer coming out with new products because of the refrigerant transition.
Last year we tested a couple of media units. We tested LG. This year we're going to test out Daikin. We've already tested our Mitsubishi last year. Every single mini split is now Wi-Fi connected out of the box. We want to basically be the Car and Driver magazine just to bring it back to cars. But for electrification, because you're spending pretty much the same amount as you're on a new car with some of these new systems, that's how it's going to be on the laminar collective side.
But for Manitoba, what do you think?
00:42:00.380 — 00:42:18.460 · Speaker 5
Yeah, I hope to keep building more automations and more tools that make it more efficient to run an installation company. I mean, my ideal world is to release these as open source products. People want to adopt it, and it leads to lower overhead and thus lower costs for heat pumps. Big fan of that.
00:42:18.500 — 00:42:26.900 · Speaker 1
Hernan is about to go on cloud code nonstop for the next 24 hours, and as a matter of fact, in the next 12 months.
00:42:26.900 — 00:42:40.940 · Speaker 5
As also to straighten the record out, I am a software engineer of 13 years. I am not a vibe coder at all. I've done this. I worked at IBM, so I love software. I know how to use it. But Claudia has made it really easy to develop these software and features a lot quicker.
00:42:40.980 — 00:42:49.060 · Speaker 3
Very cool. That's exciting. I have not heard of anyone with the ambition to be the Car and driver magazine of electrification, so that's a powerful vision.
00:42:49.100 — 00:42:51.140 · Speaker 1
The world needs it. It's what the people want.
00:42:51.220 — 00:42:55.980 · Speaker 3
Kit, Hannan awesome. Thank you so much for joining us on the Heat Pump Podcast.
00:42:55.980 — 00:42:59.620 · Speaker 1
Thanks so much. Editor. We love Amply. Everybody should use Amply.
00:43:00.660 — 00:43:11.050 · Speaker 5
We appreciate it. And thank you for letting us have a place to share our beliefs and call to action. If anyone wants to partner up on research or wants to share information, we're always open to it.
00:43:11.090 — 00:43:25.170 · Speaker 1
You can find all of our research published on the Laminar Collective Substack. You can go ahead and Google Laminar collective Substack. That's laminar like laminar airflow, which you should know as an HVAC professional. Thank you very much.
00:43:25.450 — 00:43:27.210 · Speaker 4
Thanks, guys. This is really fun.
00:43:30.210 — 00:43:52.610 · Speaker 4
Thanks for listening to the Heat Pump Podcast. It is a production of energy and just a reminder that the opinions voice 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 in 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. No .com, just energy. Thanks a lot.