·
29 minute read
In this episode of The Heat Pump Podcast, Amply co-founders Ed Smith and Eric Fitz sit down with Samir Pendse, CEO and co-founder of Coral, an innovative startup simplifying the notoriously complex world of heat pump rebates. With an extensive background in fintech and small-business lending, Samir explains how Coral transforms cumbersome rebate processes into instant savings at the kitchen table, boosting contractor sales and customer satisfaction.
Why This Matters
Rebates are a critical part of the heat pump sales process in many states. Yet, contractors regularly face significant financial risks, paperwork headaches, and unpredictable cash flow when manually managing rebates. Coral tackles these problems head-on, ensuring contractors and homeowners alike benefit immediately without the usual stress or uncertainty.
Key Learnings:
- 🧾 Turbo Tax for Heat Pump Rebates: Coral uses software to provide a simple, 60-second app experience to quickly and accurately calculate and guarantee rebate amounts right in the home.
- 🔥 Instant rebates boost sales: Contractors using Coral see up to 15% higher conversion rates.
- 🏛️ Stable state rebates: Utility and state-driven rebates remain robust despite federal IRA program delays.
- 💰 Financing is critical: Low-cost loans dramatically increase heat pump affordability for the average homeowner.
- ✅ Quality and simplicity: Smart policy design and streamlined technology ensure both accessibility and high-quality installations.
- 💻 Streamline with software: Software tools like Coral (and Amply) simplify and accelerate rebate processes and heat pump sizing.
Timestamps
[00:00] - Introduction
[01:21] - Meet Samir Pendse & Coral’s mission
[04:01] - Business model & Value to contractors
[05:16] - Origin story & pivot from software to financing
[09:39] - Real-life rebate pain points Coral is solving
[15:14] - Financing the rebates & making contractors whole
[18:48] - Incentives & the Inflation Reduction Act
[27:19] - Quality assurance & software-enabled simplicity
[36:25] - Final thoughts & Resources for heat pump entrepreneurs
Connect with Samir Pendse:
Transcript
[00:00:00] Samir Pendse: On the rebate side, most of that has been contractually obligated to the states.So there's almost a separate question of what can be rescinded and what can't, and I. Some of that is going to the courts. Some of that Congress could overturn or change, but in 49 states, they have been applied and been awarded these grants. I do think realistically, at minimum, the deployment will slow and a lot of this uncertainty will just make it even longer and longer before these programs actually go live. With that said, Everything we're focused on right now is state and local and utility driven rebates that are entirely independent. Regardless of what happens in Washington, there's really enduring. Pool of capital available for these rebates in states across the country.
[00:00:33] Ed Smith: before we kick things off. A quick public service announcement. Amply is hiring. If you or your favorite software nerd loves iOS development and has an irrational affection for heat pumps, we want to talk. We're a small team building fast, and our customers are asking for more. We need another great software engineer to help us deliver more faster. The job post is in the show notes. Please share it or reply if it sounds up your alley. Alright, onto the show.
[00:00:53] Eric Fitz: And I'm Eric Fitz. We are co-founders of Amply Energy.
[00:00:55] Ed Smith: Today, we have Samir Pendse with us, co-founder of coral, which is a startup focused on simplifying and speeding up rebate processes of all types. Samir, welcome to the podcast.
[00:01:08] Samir Pendse: Thanks so much. So thrilled to be here and excited for the conversation.
[00:01:10] Ed Smith: So before we go anywhere, because I'm going to ask a whole bunch of questions about you, coral, but just so our listeners know, more than the sort of six words I just said about it. What is coral and how does it make your customers lives easier?
[00:01:22] Samir Pendse: Yeah, we help HVAC and electrical contractors. Installing heat pumps capture any type of incentive that can make heat pumps more affordable and lower upfront costs. So there are massive rebates at the state level through utilities in some places from federal rebates. There's also the 25 cent tax credit. There's other forms of incentives and subsidized financing. And we're really taking these really complicated and hard to access incentives in many cases and making them simple and instant for contractors to deliver to their customers, lowering upfront costs and helping them win more sales.
[00:01:54] Ed Smith: So instant applied to the bill. So like it's immediately there. The homeowner has to cut a smaller check as a result.
[00:02:01] Samir Pendse: Exactly. And especially for the rebates, which we can directly finance in that way, our customers are offering in some cases just $10,000 off the invoice. So the customer just gets the far lower cost. But the contractor doesn't have to file for the rebates, doesn't have to bear the risk of the rebates, isn't paid out, and especially doesn't have to wait months to receive the rebate themselves because we directly deliver the rebate to the contractor as well in the moment. So they're made whole.
[00:02:25] Ed Smith: Awesome. I bet a ton of people are super interested already, but I'm going to take a step back for a second. We'll spend most of the time on coral, but tell us about you. Who are you? How did you get to where you are today?
[00:02:37] Samir Pendse: Yeah. Co-founder and CEO at coral. My background in our whole team's background is really around financial services and fintech. I actually worked in consulting where you worked at at BCG for a number of years, working with large banks and financial services clients. But then I left to work in small business lending, helping really small businesses, including a lot of contractors, get the capital they need to grow their business. And really, I was almost a fintech product manager, taking this largely manual, time consuming, sometimes lengthy process and taking the best available financial technology products plugins to make it just much more fast, efficient and increase approval rates. So I love that. Always want to do something entrepreneurial myself and met my co-founder Nizar, who had been at betterment from the engineering side for fintech, and we wanted to take that to the world of electrification and around heat pumps, and making energy efficient upgrades as affordable and accessible as possible through some of the creative financing and approaches we've learned previously.
[00:03:33] Eric Fitz: Very cool. And can you talk a bit more about your business model, like how are you actually making money? If the contractor gets the benefit and the homeowner gets a benefit right up front?
[00:03:43] Samir Pendse: So we partner with the contractors and they're our customers. So we do charge financing fee to the customer for the rebates that we advance. But the ROI is tremendous for the contractor typically for a whole home heat pump project, you could be seeing 15, 20, $25,000 as the total project cost. You're likely getting at least a second opinion, if not a third opinion from different contractors for this project. And if contractor one is selling you the heat pump at full price, and contractor two can offer that heat pump for 5 to $10,000 off massive sales advantage for contractor two. So we've now been actually tracking with real data and leads and things like that, and seeing a 15% conversion rate increase from contractors using coral. So massive sales lift massive advantage. And that more than makes up for the financing fee that we charge the contractor to deliver that instant rebate.
[00:04:33] Eric Fitz: Fantastic.
[00:04:34] Ed Smith: That's awesome. Great to know how you guys make money and great to know to get you a little bit better.but we came into contact because we're both operating in Massachusetts and both helping contractors install heat pumps. And it was just it was a great chat about how we're doing that. And we share a bunch of the same customers, which has been cool. So tell us more about the origin story of coral. You mentioned your guys backgrounds and what gave you the interest to do that. But like, when did you start it? What really led you to take the leap? Give us more of that.
[00:05:08] Samir Pendse: Yeah. So as I mentioned about the background, none of that is related to the world of HVAC or electrical work directly. So we had a ton to learn and still have a ton to learn, and started the process by just talking to as many contractors and homeowners and in some cases, wholesalers as we could, just to learn about how they sell heat pumps. And do customers ask for it? Are they the ones promoting heat pumps? How do they think about not just incentives, but the entire process? And so many of the topics that you've covered on this podcast. And we really, though, zoned in on rebates and incentives. It's a persistent pain point that we kept hearing from contractors and so many pieces of it. A lot of it is, how do I really guarantee to the homeowner what they're going to receive? It's always up to $2,000 of a tax credit, or up to $10,000 for a rebate. But how do I know? Is that 10,000, 7000 or 0 and actually guarantee that? And then all the pain points around filing and financing that we're now solving with coral.
[00:06:04] Samir Pendse: But to the origin story, it really just came from doing really deep discovery and learning as much as we could, and trying to find a way to solve a real burning customer pain point, which we saw from contractors, especially in the northeast where we've started. But then the other piece, startups and businesses, a lot about learning and pivoting and adjusting, and we actually started the business with a software only product for contractors that would tell contractors and homeowners, here's the tax credits you might be eligible for. Here's the rebates you might be eligible for, but not going to that granularity of guaranteeing it or certainly not financing it. And that's where we realized giving somebody a calculator was more of a lukewarm response. It was more of a nice to have, but not a massive needle mover for the business. So that forced us to rethink how we did it and really come back to market with this end to end solution that doesn't just show people the information, but actually takes care of all the paperwork, the filing and the funding to deliver those rebates upfront.
[00:06:56] Eric Fitz: Very cool and remind us how many states are operating in now. Roughly how many years you've been in business, like any kind of metrics or details around your business?
[00:07:05] Samir Pendse: Yeah. So we launched the product a little over a year ago, so early 2024. Right now we're in Massachusetts and Connecticut as official partners of mass save and energize Connecticut and delivering instant rebates throughout those markets. There are rebate programs. There's a much broader set of incentives that we'll soon be covering, but the rebate programs with really meaningful savings in over 30 states across the country. So although we're starting in the northeast, very soon, we'll be in New York and New Jersey and some other northeast markets. But we really see an opportunity to help contractors across the country. Whenever there are rebates or other incentives, deliver those instantly and easily.
[00:07:40] Eric Fitz: Nice. And can you go a little bit deeper to into what your typical customer looks like? You mentioned HVAC contractor and electricians like. Yeah, tell us more about that.
[00:07:49] Samir Pendse: I think that we really are serving all the whole spectrum of contractors from really smaller companies, mom and pops, to even some of their large consolidators and some of the PE backed companies, and all of them have really seen maybe some of the specific needs or pain points are a little different by customer, but a ton of value from this integrated solution with guaranteeing the rebates, filing it and financing it. I think for the maybe the PE backed contractors, it's less the working capital and the financing, but definitely concerns around how do I know for sure that I'm going to get this rebate. And if I deliver an instant rebate but don't know all the detailed requirements and confirm the minor details, and will I be on the hook for thousands or tens of thousands or more? And that's one set of pain points for the smaller contractors. It's still that, but also the idea of delivering an instant rebate or delivering instant rebates for all of your projects and having to float tens of thousands of dollars indefinitely until you get paid back is a massive pain point for contractors, and we serve a lot of contractors in the middle as well so that we really can conserve, I think, all types. And then especially though with some of the midsize or larger contractors and especially selling heat pumps, we are seeing more of multi trade competencies within the same contractor where HVAC may be the core. But many of our contractors who kind of started as core HVAC contractors are also getting asked about electric panel upgrades, wiring, EV chargers and electrical components of obviously heat pumps. So there we think about the broader bucket of HVAC and electrical contractors as our customer opportunity.
[00:09:19] Eric Fitz: Awesome is absolutely a huge pain point. Over the years, we've had multiple direct conversations with our own customers telling these horror stories where they were on the hook for the rebates, and they discovered at the end of a year that they were missing 2 or $300,000 worth of rebates that the agency was supposed to deliver to them. They didn't come through either because of paperwork issues or potentially the. It was a small pilot program and they ran out of money and like just terrible stuff to have a business having that liability just sitting out there. It's crazy and it's just fantastic that you're solving this two party pain point. It's for the homeowner and it's for the contractor. Like everybody's winning in this situation with a solution like yours. It's really awesome.
[00:10:00] Samir Pendse: Yeah. Thanks. And then it's also brings up some of the very few contractors we met who were doing this in-house and seeing these 2 or $300,000 liabilities. They also have to hire up a big team, like we visited lots of contractors in their offices or in the field, and saw the few who were doing it would have to hire one, two, sometimes 3 or 4 team members just focused on rebate receivables. And we would see these like 30 column Google Sheets, like tracking where the rebates are in the process and what's the status and following up. And it's just a lot to manage and a lot of risk, which is a big part of what we're helping them solve.
[00:10:33] Ed Smith: Yeah, that was actually, without naming names, our very first ever paying customer before we had amply as the product is today. We were in their office, we'd been out in the field, and then we were in the office to watch like the office staff. And that's where we learned about the $300,000 liability. We saw the process with the spreadsheet, and Eric and I talked. We were like, do we do the same thing and system design problem, or do we do the rebate problem because both seem quite acute. So yeah, we saw that ourselves from a bunch of our customers. So I imagine all of our listeners know what life without coral looks like. If you have coral. What is the process look like then? Like a bit of the nuts and bolts, like a comfort advisor is in a house. Normally they're doing some fancy footwork up to X amount of dollars rebate. We'll give you the paperwork. Homeowner you got to submit it. All right. That's today's typical process. What would it look and feel like if someone was actually using coral.
[00:11:31] Samir Pendse: So we make that comfort advisor's life a lot easier. So we have a coral app that they can use on their iPad or on their phone, or that really guides them through the rebate process. And if they're asked or want to really lead with, you're eligible for a utility rebate. And the customer is like, how much? The contractor with the information they're probably already getting. The sizing through amply and are already collecting all this information from the homeowner. We basically prompt them through almost a TurboTax for rebates like a 62nd guided flow, which maps directly to the utility or the rebate programs requirements, refreshes and automates those requirements as soon as they change, and then guide the contractor through every single question or detail that we need to confirm to know for sure in the moment if they're eligible for a rebate and critically, how much that rebate is as well. So on the spot in 60s, it goes from, yeah, you're probably eligible from up to $10,000, but you have to apply and figure it out to we can guarantee you $7,622 for this rebate, and we are going to knock it off the invoice and adjust your quote then and there.
[00:12:34] Samir Pendse: And that's a game changer because now the contractor can give that certainty, deliver the lower upfront costs, but also just be the expert on top of all of the requirements and rebates really shine to their to their customer. So that's how I would say part one of coral, where the contractor comfort advisor uses that. The second piece is the back end, where we also don't then ask the homeowner to do all the filing and fill out the paperwork. And the other piece is the average homeowner may replace their cooling system twice in their life. This is not like every day they're doing this and knowing what integrated controls are or re numbers or things like that. We take that off their plate but also off the contractor's plate. So anything they did upfront is saved within coral. And then the install manager or the office manager, whoever's managing that on the back end, they can use coral to file for the rebate directly, just uploading the invoice and a couple other data points, and we take it the rest of the way and file from there.
[00:13:27] Eric Fitz: That's super interesting. Can we get a little bit more granular? Can you just talk a bit more. What is that kind of homeowner comfort advisor back and forth look like? Is there a moment where the comfort advisor like hands your tool to the homeowner and they have to enter information like live in the home. How does that work? What does it look like?
[00:13:44] Samir Pendse: It depends on the rebate program and the requirements of each program. In most cases, the contractor is maybe asking questions or doing their assessment of the house, but they don't actually have to ask the homeowner anything specific. It's things like how many bedrooms are in the house and what's the heat load calculation, and what's the utility and the utility number. In some cases we need the gas bill, and then they would ask the homeowner for that, but not always. And also then proof of have they had a assessment previously in cases where those are required or insulation that might be needed for the rebate. So they're asking these questions and collecting these inputs. But usually they don't need the homeowner to enter anything. Often it's just like a wow moment. They like turn around the iPad or like, look, you're guaranteed this rebate with this big green check mark and you're eligible and that can help, but it's not needed. The one exception is we do support income qualified rebates, which are enhanced or much more lucrative for low income homeowners. So in some cases will direct them kind of with a secure link where the homeowner can enter their information confidentially around income to get them qualified and then be able to access those income qualified rebates too.
[00:14:51] Eric Fitz: Yeah. That's great. Awesome that you're connected with those systems as well. And it's also nice for the contractor that they're not handling that personal financial data directly, that you've got that sort of separation between the homeowner and the contractor, because neither one of them really want to deal with it, have it pass between each other.
[00:15:07] Samir Pendse: Exactly. It can be such an awkward conversation. And within the states that we operate in Marseilles, for example, has income qualified rebates and financing. We've talked about the IRA or will. And much of that program is specifically for low to moderate income homeowners and for a contractor to then be asking questions about income and kind of detail financial history. That can be just really an erosion of trust, or it can be seen as invasive and really just disrupts the kind of trusted advisor relationship that the contractor wants to build. And saying, look, here's a secure third party app that manages incentives and rebates and is going to take you to this flow where that's just a much easier way to help maximize these incentives without getting into the details with the homeowner directly.
[00:15:49] Ed Smith: Awesome. Now, real brass tacks. So in the moment in the home, contractor can take it off the bill paperwork submitted to you guys. Do you cut a check and does the check come in from coral? And then what happens? What does that all look like?
[00:16:04] Samir Pendse: Yeah. So that's the back end piece of it where the homeowner just gets thousands of dollars less. They're thrilled. They just get the rebate knocked off the invoice and pay less and get a great heat pump installed. The contractor, though needs to be made whole pretty much at the moment of install. So we collect either information like that the contractor directly uploads, or we integrate with some of their field service management tools or other tools and pull in data automatically. And then once we've verified all the details related to the job and do the filing, we cut a check to the contractor within 24 hours. So they are made whole, truly at the moment of install and get those rebate funds directly that otherwise either their customer or they would have to wait months for and get that in some cases 200, 300,000 or really significant liabilities. So they're made whole up front and then don't have to worry about tracking the rebate or chasing any of these programs or anything.
[00:16:57] Ed Smith: All right. So then it's so it's moment of so it's install basically whenever they submit all that paperwork to you guys. And so then that's why you all take a fee. You're waiting for them, the state of Massachusetts or Connecticut or wherever they go to next to then give you guys the cash.
[00:17:12] Samir Pendse: Yeah. No, we are directly financing it. And that's a big part of the fee. But I think that it's also the software that does tell them in the moment that they're eligible. And that's a huge part of what drives the sales conversion too. So I think it's that integrated of the sales tool with all the process management and paperwork and automation there with the financing is the integrated package that we deliver.
[00:17:33] Eric Fitz: Yeah. Makes sense. And like, gosh, there's just so much comfort. Advisor in particular, they're trying to manage so many different elements. When they're selling heat pumps, they're trying to figure out the right sizing. They're trying to figure out configuration and layout of a system. They're trying to figure out how to price it, and just having the confidence that, like, I'm going to get we're going to hit this number. That's amazing. That just helps people sleep at night and do their jobs better. It's awesome.
[00:17:58] Samir Pendse: Exactly. There's so many. And then as we grow coral, I mean, there's more around the tax credit side of it, the financing side of it. We actually are in some states, like Massachusetts, supporting alternative energy credits, which is another type of incentive which can apply to these installs, and asking any comfort advisor to know the details of all of these different programs is just impossible. On top of everything else on their plate. So at least we can make all those incentives hopefully a lot easier, and just something where they can guarantee it or apply it upfront to make that side of it a lot easier.
[00:18:29] Eric Fitz: So speaking of incentives, there's been a lot of activity and sort of reversal of activity around the Inflation Reduction Act. We assume that you've got a bunch of knowledge around it, given it's such an important part of your business. Can you just tell us for the states that you're operating in, what's the latest kind of Intel that you're hearing? What you're seeing with regard to the Inflation Reduction Act or really any other incentive programs?
[00:18:55] Samir Pendse: No, I appreciate that. The caveat the Inflation Reduction Act has the 25 C tax credit. There's also the rebates of $9 billion in total for heat pumps and broader electrification upgrades. And this is a little bit of prognosticating and we'll see. But in general, I'm optimistic that most of that will persist and endure. There's a lot of bipartisan support for these incentives. It's directly lowering costs for homeowners, helping contractors, small businesses and many Republican congressmen have actually voiced support very publicly in terms of keeping the IRA. And so there's a lot of reason for optimism there. I think that certainly there is going to be a big tax fight that maybe by a few months or weeks from now will be resolved. So we'll see how this shakes out when this airs. But there is going to be a big tax fight in the 25. Tax credit is one of the credits being considered to be repealed to to make the entire tax math work. So that is wait and see. But there's a lot of Republican support to preserve that tax credit. On the rebate side, most of that has been contractually obligated to the states. So there's almost a separate question of what can be rescinded and what can't. And some of that is going to the courts, some of that Congress could overturn or change. But in 49 states, they have been applied and been awarded these grants. I do think realistically, at minimum, the deployment will slow, and a lot of this uncertainty will just make it even longer and longer before these programs actually go live.
[00:20:21] Samir Pendse: But I'm optimistic that in most states, these IRA programs will eventually be available. What it does mean, though, is I think there's less than ten states right now that have any version of an IRA program live, which is really sad given we're in May 2025 and this bill passed in 2022. And unfortunately, it will be some time before kind of the broader impact of these rebates is available. With that said, you mentioned the states that we're operating in. Everything we're focused on right now is state and local and utility driven rebates that are entirely independent, really federal funding in Massachusetts, the 25 to 27 kind of next tranche of mass save that recently was submitted for approval. The overwhelming majority was from ratepayers and from utilities and those funding sources, not from the IRA. Regardless of what happens in Washington, there's really enduring pool of capital available for these rebates in states across the country. And when I said up front, there's over 30 states with these programs. It's the same energy efficiency programs that ten years ago were incentivizing LED lights. And then five years ago was nest thermostats. And now it's heat pumps and 4 or 5 years it might be batteries or something else, but these are by utilities ratepayer funded for energy efficiency that if you look at that, I've just been really steadily growing for decades, and we don't expect to go anywhere.
[00:21:38] Eric Fitz: That's a great point. Regardless of what happens in with the kind of federal government like programs like Massachusetts, Mass Ave in New York, those annual budgets just for those individual states are around $1 billion. So that's without any of the IRA dollars. So in many ways, IRA is fantastic. It's adding some more cash and more systems to help lots of states across the country. But states like Massachusetts, Connecticut, New York, they already have these fantastic budgets that have been in place for decades that there's going to be rebates available, kind of regardless of what happens with Congress or the executive orders.
[00:22:16] Samir Pendse: Exactly. And for coral, I think for the opportunity more broadly, it's certainly actively monitoring and waiting and see, and we've built our platform to be able to support IRA rebates if and when they're available. But there's so much opportunity to help contractors and help homeowners just with the existing programs in place from utilities or at the state level. So that's the immediate focus.
[00:22:35] Ed Smith: And Eric, you had a stat Massachusetts billion dollar rebate budget today and what they were going to get from the IRA. And it was like a rounding error. Do you remember what that number was?
[00:22:44] Eric Fitz: Yeah, I have to pull up the maybe you know, this summer Massachusetts was allocated like 120 million from the IRA. Is that right?
[00:22:52] Samir Pendse: That's exactly what I thought. And the proposed total massive budget for the three years was 5 billion. So 120 over 5 billion. It's yeah, like 2 or 3% is what the IRA contribution was.
[00:23:05] Ed Smith: That's a great stat. Now we're getting super specific for comfort advisors in Massachusetts. But like knowing those sorts of numbers can put a homeowner's mind at ease too. Like most of your rebate is not at risk, right? It's not like it's not like it was flipped where the state is putting in 120 million and the feds are putting in 5 billion. It's the other way around.
[00:23:20] Eric Fitz: And importantly, the IRA, the majority of the cash rebate side was really targeted for low to moderate income households, which is where it should be going. So that's why it's dollar amounts are smaller, but it's trying to target it towards one of the parts of the population that need it the most. So that's a great thing about the IRA.
[00:23:39] Samir Pendse: Yeah, absolutely. And also lower low to moderate income. And then also a huge portion for multifamily, which is sometimes harder to reach with existing programs. And it is fantastic to meet those underserved markets. So I think we're hopeful and optimistic that those eventually do get rolled out.
[00:23:54] Eric Fitz: Got it. Okay, so from the IRA specifically, it sounds like the cash rebates they've been delayed but are very likely to eventually roll into the states where it's been contractually obligated. Basically, the government can't break up signed contracts or else we got all kinds of problems. And but the tax credit side, that's the part that's an open question and maybe at risk from the IRA.
[00:24:19] Samir Pendse: That's my view. And, you know, full disclosure, I'm not a policy analyst actually at coral, but we're not full time policy analysts. But I think that because the tax policy fight will arguably be the most defining legislation for the next few months, and they're going to be looking at every possible way to make the tax math work. And this is a tax credit that's available. So I think that I would put us most at risk where yeah, the cash rebates are contractually obligated in most cases. And the other piece which has come under scrutiny, but I think actually is an important piece of it, is the greenhouse gas reduction fund pool of capital also, which 20 billion of that is to finance kind of heat pumps and other energy efficient upgrades. And there's been a very public fight around that, but that is also contractually obligated and could easily be available for more of the subsidized financing as well.
[00:25:05] Eric Fitz: The Greenhouse Gas Fund was meant to set up a bunch of quote unquote, green banks across the country for financing all kinds of projects. And it's a I mean, you haven't talked a whole lot about the loaning side as an incentive for homeowners, but that makes a huge difference. Incentives obviously drop the upfront costs, but even better if you can get a low cost loan, so your install costs for a project was going to be $20,000, including incentives. Now it's maybe you have a small fee of $500 or something like that to get the loan and then be able to spread those payments out. That can totally transform a market if done right.
[00:25:40] Samir Pendse: I think that's a huge opportunity. And that's where also where we're going with coral is to help, not just get your upfront costs lower with the instant rebate, but find you the best available, lowest cost financing to pay for it over hopefully many years. And one of the things that I think from my small business lending work, I've also worked in the kind of financial inclusion world is. The average American has $8,000 in savings period. So college fund, rainy day fund, emergency medical expenses like $8,000. That's it. So any type of premium for energy efficiency is just not feasible for the average American. And I think even if you can make the case around energy savings and comfort benefits and all of the amazing things about heat pumps, even if it's a few thousand dollars more and you have $8,000 in total savings. It's a very difficult trade off, so if you can finance it and find really low cost financing, like I keep going back to Massachusetts. But they do such a great job. They have a massive heat loan program which offers up to seven years 0% financing. It totally changes the calculus of affordability. And there are many state programs like Connecticut has a smart financing program, which also has subsidized low cost financing. And there are other states like that as well. California, others. If you could unlock those green banks and create that vehicle, it could make a huge difference for affordability and access.
[00:26:58] Ed Smith: Ah, those are super helpful answers. I'm a follow it up with a spicy question, so it requires a little bit of tee up. So we've had a bunch of guests on who talk about rebates. Corporate Lunsford was a recent one, Brian Cooksey, Steve Rogers, the CEO over at the Energy Conservatory. And we're about to have Nate Adams on. And I know this is like one of Nate's favorite topics. The criticism of rebates is they create a sugar rush. Brynn had a phrase from an article he wrote called The Heat Pump Cowboys, where it was a very polite way of saying basically, like predatory contractors sometimes who like they're going after the rebate, they see this market opportunity and they're slinging whatever it is that the rebate programs want. And it is a bit of use slinging, like, not necessarily the quality and care that you want it to do. Now, you are not a politician who put these rebates in place. So I'm not asking you to necessarily justify them. But as someone who plays in the facilitation of this, I would imagine you would have a perspective on that would be interesting as a potential counterpoint.
[00:27:59] Samir Pendse: Yeah, absolutely. I think there are absolutely valid points, all of those. And I think that there is a balance between how do we make sure there's really high quality installations. And also we're designing these systems, these upgrades in a way that really is energy efficient, sizing it correctly, creating insulation and weatherization around it. And that is absolutely critical to achieving any of the goals we want out of these programs. So fully agree with that. On the other hand, there is an important component around simplicity and actually helping people access these programs. If you create kind of rule after rule or hurdle after hurdle, it just becomes too much and too complex for any homeowner or contractor to be able to access these funds at all and apply them. And the average homeowner will throw up their hands and be like, give me another furnace, because I just can't deal with all these requirements around these rebates. So the answer is somewhere in the middle. I actually think that Massachusetts, for example, has done a really great job finding that balance. By and large, there are whole home and partial home rebates, and the whole home rebates are larger. And if you want to get a whole home rebate, you have to get a home energy assessment. Really looking holistically at the home and the opportunities for energy efficiency. And if that assessment recommends insulation, you have to get that insulation to be able to get rebate amount for the whole home job. You also are required very explicitly to have a manual calculation to really be accurately looking at the load calcs and sizing the heat pump appropriately for that home with the weatherization and other components built in. So those are great ways. And even for the partial, their bonuses for better load sizing and for weatherization. So those are ways to try to split the kind of find the balance there and achieve both goals. But it is challenging. Absolutely. But I think finding a way to still address those concerns while making the programs accessible is the primary objective.
[00:29:44] Ed Smith: I would say we're biased, as are you. Like, some of those things that make it hard are a bunch of places where software can make it easier, where you can do something fast and accurate. That's a lot of what you're doing with your software and frankly, what we're doing with ours. Right? Yeah. Manual J's are a pain in the ass. Some of that is the way Manual J's are, but some of it is just like software can make it a heck of a lot easier with what we have today to do a really good manual J manual J quickly so you know your point that it's it's both end is totally right, but are there other ways? Don't throw out the rebates. Are there ways to make the requirements of rebates less onerous while still maintaining a high bar for quality.
[00:30:20] Samir Pendse: Yeah. No, absolutely. And I think some of the things love that's a quick example, an amazing example of just like ease and simplicity and speed, allowing you to get the results of like really great low calcs while just making it easier. And I've seen at you really map your entire house. I've seen the demo and it's super fast and impressive, and there are other versions of that where it's whatever you can do to make it faster and easier for the contractor. That can be the way to accomplish both objectives. The other piece is, I think the programs are taking other measures to ensure high quality installations and things like that. If you get one of these rebates, there's a chance that you'll have to have an inspection from the utility afterwards to make sure it was installed correctly and the integrated controls hooked up properly and things like that. And there are other ways to do. There's a lot of kind of vetting and making sure that the installers who can access these rebates are qualified and licensed and trained. And so I think as the industry evolves and these programs evolve, there's probably a lot of learnings from the last decade plus, but I think are starting to be incorporated into the programs to accomplish both of those goals.
[00:31:24] Eric Fitz: Yeah for sure. The ERS is that energy efficiency resource standards that have been in roughly 25 to 30 states across the country, many of them for decades, have learned a lot. The early part of my career, in the early 2000, I used to help manage and monitor, like the funds for some incentive programs across the country. And in the early 2000 in particular, there were unfortunately some really negative outcomes where there were a lot of these, like small pilots for smart thermostats or in some cases for solar systems. And the program administrators did not do a good job of communicating, like how much of the funding is left. And so folks would be participating and all of a sudden the money would run out. And that sort of has led to the stereotype that of this like sugar rush where it's, oh my gosh, it's let's go. The antennas are there, and all of a sudden they disappear and then they come back and they and I'd say pretty much universally across the country again, for these states that have had utility programs in place for decades, they have learned a ton. And by and large, they've really learned how to deal with some of these cowboy contractors and cowgirl contractors and also ensure that there's better proactive communication and that they're just like this. Start and stop is not challenge for the industry because, like, one of the worst things for any industry is uncertainty. So just knowing that you can depend on these incentives being there, that just allows you to plan your business appropriately and scale up your team and do the right stuff. So I think that's generally what I've been seeing over the last ten years in particular. That's really been a shift in the right direction on designing these programs, implementing them, monitoring them.
[00:32:59] Samir Pendse: Could not agree more. And when people talk about the boom and bust, it is like that is a terrible outcome when just the programs get turned off from a period of time. Because then of course, then you're racing before it gets turned off just to maximize these rebates. And but then also it's how you train your team, how you train trained your comfort advisors, how you make your internal processes. Everything is then really disrupted when these programs like go away and come back again in a different form. So it does seem like there's been a lot of improvement, but that really needs to continue to be a priority, is creating more and more visibility and transparency in place as these programs expand throughout the country.
[00:33:33] Ed Smith: Two parter. So you're in Massachusetts and Connecticut. I'm curious like what states have the most interesting stuff going on for rebates outside of. You mentioned Massachusetts a bunch. So outside of that one, and is that where you're going next? Because I bet a bunch of folks listening would be like, I want to use I want to look into coral. So curious about like when you might be in their local jurisdiction.
[00:33:56] Samir Pendse: Yeah, there are a few really interesting things. I think one of the pieces is there are several markets with midstream rebates. A lot of the heat pump, water heaters or other types of products are already midstream. But then even for heat pumps in Illinois and parts of the Midwest, there are a lot of programs where it is just midstream. And when you buy from your distributor or a wholesaler, they'll knock the rebate off the equipment. I think that's a great model in general, where it takes a lot of the burden off of the homeowner, less on the contractor. I still think there's challenges moving some of the problems upstream, and there's ways coral also is potentially able to help solve those. But that's a, I think, innovation in a lot of ways to help support some of these, make these more accessible. Another, which we actually think is really exciting, is like new Jersey has on bill repayment, especially around the financing piece where there are rebates and you do get a lower upfront cost, but then you can pay off that heat pump investment just through your utility bills for months and years to come. And that's a way where it's tracked much more easily, because it's the utility who's offering the subsidies. Also collecting the payment. They can it's automatic financing built in, and it's a much simpler process. You don't have to pay a separate entity. So that is a really, I think, exciting model. Pros and cons and challenges to all of these. But I think that is exciting. And then I think on the green financing pieces where it is. There are several programs where it is like state backed financing, not just rebates that can just make it much easier to afford these problems, or these projects with just much lower interest rates and no dealer fees and things like that. So that's some of the really exciting opportunities we've seen, and I think there is more opportunity to scale those type of approaches to more states across the country.
[00:35:34] Ed Smith: Does that mean. Are those some of those places yocomm named, places you're going to go next, or are you willing to talk about that.
[00:35:39] Samir Pendse: Without going to like the details of the model? But certainly, like new Jersey is a priority for us, that we expect to be able to support some of the incentives there pretty soon. Yeah, there's all those places. I mean, California certainly is a major market that will support at some point relatively soon. No firm dates or launch timing yet around some of these markets. But I think there's big opportunities in all these places where we can help support.
[00:35:59] Eric Fitz: This has been super fun. I think we're at a great spot to start wrapping things up. We always like to ask final question around what are some what's some advice or specific resources that you found really helpful, or that you'd recommend for heat pump entrepreneurs out there that are getting into the business, or already have a team in place and are trying to scale things up.
[00:36:22] Samir Pendse: Especially excited to hear the pod with Nate coming up. We bought the book, share it with our team members, read a lot of the content, and I think that's just I mean, Nate, everything he's written and shared is like a great resource. So I highly recommend that. I really like the Home Pros newsletter. I'm not sure if you see that, or I think it has a really good industry perspective around just broadly HVAC and what the manufacturers and distributors and even the investors are thinking about. And so that's a good compliment. So like both of those. And then on the entrepreneurship side, that's a whole set of things outside of out of kind of heat pumps and content. But I think there's so much to be said around just partnerships, whether it's like through whether it's groups like my climate journey or work on climate or some of the local events and resource groups, like, I think there's something to founders helping other founders, and that can be really powerful. Just in terms of shared learnings, best practices, intros and things like that, which definitely encourage probably across industries, but especially in this industry founders to take advantage of.
[00:37:21] Ed Smith: Samir, thank you so much for joining the podcast.
[00:37:25] Samir Pendse: No problem. Thank you guys. This was a blast. Really enjoyed this and so great chatting with you both and hopefully we can be back sometime in the future.
[00:37:32] Eric Fitz: Yeah, so much fun. Thanks so much Samir.
[00:37:37] Eric Fitz: Thanks for listening to the Hip Hop podcast. It is a production of Amplify 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.
