Dandelion Energy, which entered the Long Island market in the spring of 2022 with a plan to create a mass market for geothermal energy systems, has hit the reset button and is now focused on a smaller segment of the limited market.
The company, in a statement issued in response to Newsday questions, said it will no longer pursue the portion of the market that entails retrofitting homes that have existing oil or natural gas heating and cooling systems, instead focusing on new construction.
When Dandelion entered the market amid fanfare in April 2022, then-chief executive Michael Sachse said the company would focus its efforts on the more than 1 million homes on Long Island that heat with fossil fuels and have outdated or no cooling systems.
Dandelion's change comes as the state and federal governments move to shift customers away from fossil-fuel energy systems and toward carbon-free solutions such as geothermal, which is one of the most efficient but also among the most costly home heating and cooling systems. Geothermal systems saw a miniboom across the region over the past two years, with new tax credits and rebates fueling growth, but the complex systems have also seen their share of setbacks over the past decade.
WHAT TO KNOW
- Dandelion Energy, which entered Long Island in 2022 with a plan to create a mass market for geothermal energy systems, said it will now focus on new construction and no longer pursue the portion of the market that entails retrofitting homes with existing oil or natural gas heating and cooling systems.
- The company's change comes as the state and federal governments move to shift customers away from fossil-fuel energy systems and toward carbon-free solutions such as geothermal, which is more efficient but also more costly.
- PSEG says there are few geothermal installers because it changed the criteria for this year, and that it's changing the process to include more installers next year. Authorized installers are the only ones able to get the utility rebates for the systems.
Dandelion didn’t explain the dynamics behind the latest decision, saying only that it would shift focus.
"While Dandelion is steadily expanding its footprint, we are pausing our retrofit services to better focus on the vast new development geothermal projects being constructed on Long Island,” newly named chief executive Dan Yates said in a statement. “We remain committed to bringing low-carbon heating systems to New York, Massachusetts, and Connecticut. We will continue to provide maintenance and support services to our valued customers who have already installed a Dandelion geothermal system."
The change was news to Michael Mislin, who had been approved for a loan for $52,000 for a new geothermal system and had a contractor working with Dandelion to drill hundreds of feet below his front yard for piping that is essential to the systems. Geothermal uses steady underground temperatures of around 55 degrees as the core of super-efficient heating and cooling systems.
Mislin said the process of getting the drilling had taken more than a year. After several false starts, the drilling company, Island Geo Drillers, did the work in a few hours in November, and said they’d be back in seven to 10 days to finish the next step: trenching. “That was three weeks ago and still nothing from them,” Mislin said.
Meanwhile, his attempts to get answers from Dandelion about the progress of the work at his house have been spotty, and Mislin said he plans to reach out to the state attorney general.
Ryan Maletta, co-founder of Island Geo Drillers, a Northport-based geothermal drilling company, that is one of only a handful in the region, said he plans to finish the trenching at Mislin's home in the coming days, and said Dandelion’s new focus on new construction is bearing fruit. He’s now working on a community in Quogue, he said, that includes 110 homes, all equipped with geothermal. “The new construction side of geothermal is booming,” he said.
Dandelion, which still must purchase and install the geothermal equipment at Mislin's home, didn't respond to Newsday questions about it.
Few installer choices
Long Island customers who want to have their homes, new or old, equipped with geothermal may find the choices of an installer severely limited. Whereas there were more than a dozen installers listed for 2022, the current listing of PSEG-authorized dealers is now just two companies — Energywise and Airmax Long Island, both of Ronkonkoma.
PSEG says it's because it changed the criteria for geothermal installers this year, and that it's changing the process to include more installers next year. Authorized installers are the only ones able to get the utility rebates for the systems.
Mike Bailis, chief growth officer for Energywise, said the company has seen rapid increase in sales in 2023 — 15 replacement systems and three new-home installs. That compares with just six systems for all of 2022.
He said the company saw a bump from advertising and marketing done by Dandelion, though most growth was “organic.”
“The increase is mostly organic in that we have not ramped up our targeted marketing program, which we will be starting this month,” he said. “I expect a growth next year of probably 20-plus replacements and 30-plus new installs.”
Katy Tatzel, a spokeswoman for PSEG Long Island, which administers the plan for LIPA, explained the company has “adjusted the program rules” for 2023, listing only installers that have completed at least five projects within the past 365 days.
The reason: “We were getting contractors who were not following up with customers,” she said. For 2024, she said, installers must have completed one geothermal project over the prior year to become a listed, authorized installer, a rule that should increase the number to 19 authorized installers.
For 2023 through the end of November there were a total of 153 geothermal units installed on Long Island, with 63 projects awaiting completion. Last year there were 204, and in 2021 there were 146.
PSEG has found the geothermal market “seems to have become more competitive and/or cost prohibitive,” Tatzel said, noting that some geothermal partners are transitioning or at least installing air-source heat pumps, which don’t require expensive underground drilling and piping.
“Also, there does not seem to be many well-drilling contractors available on Long Island,” she said, estimating the number at two to three, who in recent months have been more focused on larger projects.
Dandelion in August asked PSEG to remove it from the list of authorized installers of geothermal after disclosing its intention to leave the retrofit market, Tatzel said.
Problems facing geothermal sector
Richard Pandolfi, who owns and operates Northport-based PGI Corp., one of the Island’s oldest and best-known geothermal installers, said one of the problems for companies that attempted to get involved in the mass-market geothermal business is they sometimes led customers to buy and install systems that were too large for their homes.
Pandolfi said one of the biggest problems facing the geothermal sector right now is lack of uniform training and knowledge by installers and markets. He said the state needs to consider establishing code requirements to make sure contractors and their people are certified to sell and install the units.
“The industry is in its infancy out there,” he said. It’s also been hit by equipment cost spikes, which have “doubled since the pandemic."
But the science behind geothermal, and its advantages over oil, gas and even air-source heat pumps is undisputed, he said. “You’re going to save 30, 35% with geothermal” over even the best air-source heat pumps.
Buyers have to understand the economics, Pandolfi said. Systems can cost upward of $60,000, even $80,000 on a large house installation. “I turn down around 75%” of potential customers, because the home or the cash outlay doesn’t pencil out, he said.
“Unless you’re going to be in your house 10 years, don’t do it," he said.