Startup Reservoir announced that it raised $8 million in a seed funding round to install more smart water heaters in homes around the Boston area, its initial market. Asymmetric Capital Partners led the round, with participation from Founder Collective and MCJ.
The company aims to redesign the water heater as a device capable of managing energy consumption, rather than merely maintaining the water temperature inside the tank. According to Reservoir, water heaters consume about 18% of a household’s energy budget and are also among the leading causes of water damage in homes.
Storing Energy as Hot Water
Reservoir’s device uses a heat pump that predicts when household residents will need hot water. During its first month of operation, the device collects data on water-consumption patterns to train a model, then begins running the pump at the most efficient and least expensive times while maintaining an adequate supply of hot water.
The company says its heat pump is about four times more efficient than an electric water heater and five times more efficient than a natural-gas model. Reservoir has also demonstrated, according to founder Luke Winston-Almanzar, that its devices can ease pressure on the power grid at the neighborhood level.
Over time, the company’s devices could be aggregated into a single fleet to participate in demand-response programs operated by utilities. These programs pay large users to avoid drawing electricity from the grid at certain times, while Winston-Almanzar said he is exploring using these payments to help keep Reservoir’s device prices low.
Additional Functions for the Home Market
Reservoir’s devices are not limited to storing energy and managing heating schedules. The company has added an ultrasonic water-flow sensor that can detect plumbing leaks throughout the home and send an alert to the user through the app.
The Max version provides a water-recirculation valve to deliver hot water immediately, as well as a mixing valve that can help prevent pipes from freezing during cold spells. The version includes a 50-gallon tank that can provide up to 150 gallons of hot water in “party” mode, which can be activated from the device’s screen or the app.
Prices and Expansion
The Max version costs approximately $6,500, while the Core version costs $5,000, including installation. Massachusetts residents receive a $1,050 discount or incentive, reducing the price of Core to $3,950.
At that price, the company says Core is competitive with, or less expensive than, existing heat-pump water heaters. For comparison, an 80-gallon AO Smith water heater costs approximately $3,500 before adding the roughly $1,000 installation cost, while a conventional 80-gallon electric water heater may cost about $1,700 upfront.
Winston-Almanzar said a Reservoir device could save Boston homeowners up to $1,000 annually in energy costs, with a payback period expected to arrive before the device’s end of life. The company offers a 10-year warranty.
Reservoir has also focused on selling and installing the devices by establishing its own plumbing company, in an effort to simplify pricing and accelerate the sales process. The company has installed approximately 100 devices so far and hopes to reach nearly 1,000 devices by the end of next year, a level Winston-Almanzar said could represent capacity in the megawatt range.