HVAC startups you need to know

When you think of sexy technology, the fans, motors and ductwork that provide heating, ventilation and air conditioning (HVAC) in buildings probably don’t come to mind. But HVAC systems account for more than a third of total building energy use in offices and other commercial structures – more than lighting and IT combined. A number of startups have emerged in recent years targeting this sector of the broader green building industry.

But don’t expect game-changing technology in the HVAC space. Heating and cooling technologies are mature, so market share will go to companies that can develop ways to improve the efficiency of existing systems.

The big nut to crack is the use of IT to integrate all the major systems in a building, not just HVAC or lighting alone. Currently, cooling systems don’t talk with lighting systems, but if they did, each could adjust to the other and save energy in the mix. Iian Walker, a scientist at Lawrence Berkeley National Lab, told us no one yet is doing this successfully.

Ice Is Nice
Arguably the best-known U.S. technology venture associated with HVAC is rooftop energy storage developer Ice Energy. The Windsor, Colo.-based startup has raised more than $74 million in venture funding and has inked a deal with the Southern California Public Power Authority to build a 53 MW thermal energy storage system. But there’s a hitch: Ice Energy’s technology isn’t meant to reduce energy use, from HVAC systems or any others. Its purpose is to shift demand for power to off-peak periods.

Ice Energy’s storage systems are about the size of an industrial refrigerator and produce ice at night, when demand for, and the cost of, power is low. The next day the ice is used to cool a refrigerant that is pumped through a building’s air-conditioning system. Utilities have shown interest in Ice Energy to help them balance demand with supply. While this will reduce the reliance on dirty, peaker power plants, the total HVAC energy needs of a building won’t necessarily change after the installation of the technology.

Optimal Efficiency
A startup that is firmly focused on reducing HVAC energy use is Seattle-based Optimum Energy. The company has raised just under $10 million in private equity to develop a suite of software packages that improve a building’s heating and cooling systems. Gary Gigot, Optimum’s chief marketing officer, says the company has installed its technology in more than 70 buildings and each has seen a 30-60 percent reduction in HVAC energy use, with payback expected in less than 3 years.

The meat of the technology resides in a controller that is installed on the premise of a building. This controller has software that speaks with a building’s existing automation system and runs algorithms to optimize the operation of heating and cooling equipment, running, say, multiple chillers at partial throttle rather than just one at full speed. Optimum has also developed a web portal that building staff can use to monitor HVAC operations and energy consumption. Gigot says the company has about 250 buildings in the sales pipeline and has been reaching out to Johnson Controls, Siemens and other major HVAC equipment players. He expects formal partnerships in the near future.

HVAC Solar
Another HVAC startup to keep an eye on is San Jose, Calif.-based Chromasun. Founded by Ausra co-founder Peter Le Lievre, the company has developed a flat-panel solar thermal collector that uses optics to concentrate solar radiation up to 25 times. Energy from the solar collectors is used to drive absorption chillers, a well-established technology that uses heat to provide cooling. Andrew Tanner, a Chromasun senior engineer, says theirs is the only flat-panel technology on the market that can generate heat over 350 degrees Fahrenheit and therefore power so-called two-stage absorption chillers, the most efficient on the market.

Chromasun’s collectors can effectively double the efficiency for producing cooling of other thermal products available today, Tanner says. The company raised a $3 million first round of venture funding in April this year and plans to begin shipping its products this summer.


A former managing director of the Cleantech Group, Dallas Kachan is now managing partner of Kachan & Co., a cleantech research and advisory firm that does business worldwide from San Francisco, Toronto and Vancouver. Its staff have been covering, publishing about and helping propel clean technology since 2006. Kachan & Co. offers cleantech research reports, consulting and other services that help accelerate its clients’ success in clean technology. Details at www.kachan.com.