Why NGP Invested in Dandelion Energy

In October 2022, NGP co-led a $70 million growth investment in Dandelion Energy, the leading tech-enabled geothermal installer in the Northeast with a mission to accelerate broad geothermal heat pump adoption with a customer-friendly, vertically integrated approach.

Heat pumps are widely considered the most cost-effective and technologically feasible method of reducing building sector emissions
Residential buildings consume 20% of U.S. energy. The vast majority of this energy is used for space heating, air conditioning and water heating. Most household heating today is supplied by fossil fuels. [1] The transition from fossil fuel-based space and water heating technologies to heat pumps is driving down emissions in this sector. Electrically powered ground source heat pumps (“GSHPs”) are the most thermodynamically efficient form of heating and are more than five times more efficient than fossil fuels at converting input energy to heat energy. [2] GSHPs reduce emissions by up to 80%, depending on the composition of the regional electrical grid. And, GSHPs have the lowest operating costs of all heating systems, including 50-80% lower annual operating costs than heating oil.

Dandelion is growing with customer demand
Dandelion tripled its commercial operations in 2022 and recently celebrated its 1,000th geothermal installation. This funding round will enable Dandelion to meet its growing pipeline of opportunities in the retrofit market and the new construction market, where installation is notably more efficient and less expensive. While growing its scale and scope of operations, Dandelion continues to prioritize quality installations and an excellent customer experience.

Dandelion’s vertically integrated, tech-enabled approach solves historical market challenges
Ground source heat pumps have a multi-hundred-billion-dollar potential addressable market based on NGP’s long-term unsubsidized technoeconomic analysis. Accelerated adoption requires lower upfront costs, as was the case with energy transition technologies like residential solar and electric vehicles. Similarly, ground source heat pumps benefit from long-term, low-cost financing and require a growing ecosystem of quality installers. Dandelion addresses all of these opportunities with a vertically integrated approach that streamlines a complicated purchase decision and multi-skill install.

Within its vertical integration, Dandelion is further differentiated by: a) proprietary design software, b) an efficient sales funnel that remotely qualifies customer leads, c) a strong brand that generates referrals and lowers customer acquisition costs, d) an innovative drilling suite that can drill faster, maneuver in more yards, and be less disruptive to homeowners, and e) a pipeline of innovation to lower system costs even further.

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[1] U.S. Energy Information Administration.
[2] Rewiring America, “Electrify Everything in Your Home,” 2021.

NGP is proud to partner with Dandelion Energy
Dandelion is led by a talented management team including CEO Michael Sachse, co-founder and President Kathy Hannun and CFO Forrest Baringer-Jones. The Dandelion team has a track record of building innovative companies at the intersection of clean energy, technology, consumer behavior and regulatory strategy.

“Increasingly, homeowners are looking for a reliable heating and cooling system that saves them money AND reduces reliance on fossil fuels,” says Maritza Liaw, Partner at NGP. “However, heat pump technologies, installers and financing options are unfamiliar to most customers. Dandelion manages the complete design, installation, financing and maintenance to deliver quality ground source heat pump heating and cooling solutions to its customers. We’re thrilled to be in business with Dandelion and to support the team as they continue to innovate to unlock more energy-efficient, sustainable and affordable HVAC solutions for customers.”

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Learn more about Dandelion Energy: https://dandelionenergy.com/

About NGP
NGP is a premier private equity firm that believes energy is essential to progress. Founded in 1988, NGP is moving energy forward by investing in innovation and empowering energy entrepreneurs in natural resources and energy transition. With $20 billion of cumulative equity commitments, we back portfolio companies focused on responsibly solving and securing the energy needs of today and leading the way to a cleaner, more reliable, more affordable energy future.

For more information, visit www.ngpenergy.com.