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It\u2019s hard to imagine a home appliance more forgotten \u2014 yet more consequential \u2014 than the water heater. Most people only think of water heaters when their shower runs cold, but they represent about 18%<\/a> of a household\u2019s total energy budget and are one of the main causes<\/a> of residential water damage.<\/p>\n To Luke Winston-Almanzar, water heaters are in clear need of an upgrade. \u201cThe typical water heater is devoid of intelligence, it\u2019s using a god-awful amount of energy, and my air fryer is smarter than it,\u201d he told TechCrunch. \u201cI was using more energy to heat my water than it takes to drive my electric car.\u201d<\/p>\n So Winston-Almanzar, who was previously chief business officer at 3D printing startup Formlabs<\/a>, co-founded Reservoir<\/a> along with Gabriel Parisi-Amon and Jake Felser to make a water heater that they would want to buy.<\/p>\n Reservoir announced Wednesday that it has raised $8 million in a seed round led by Asymmetric Capital Partners with participation from Founder Collective and MCJ.<\/p>\n The funding will help the company install more of its water heaters in homes around the Boston area, it\u2019s initial market. Reservoir has installed about 100 devices to date, and Winston-Almanzar said his company hopes to have around 1,000 installed by the end of next year. \u201cThat\u2019s when you start talking about a megawatt-scale in terms of capacity,\u201d he said.<\/p>\n Storing megawatt-hours of energy as hot water could go a long way to stabilizing the grid. Today\u2019s water heaters tend to be dumb devices, responding only to changes in temperature in the tank. But Reservoir, by predicting when people will need hot water, can heat the tank when electricity demand is low and prices are cheap. Plus, the device\u2019s heat pump is nearly four times more efficient than an electric water heater and five times more efficient than a natural gas version.\u00a0<\/p>\n The startup has been able to show that it can relieve strain on the grid at the neighborhood level, Winston-Almanzar said. Eventually, Reservoir could aggregate its fleet of water heaters to participate in utility demand response programs, which pay handsomely for large users to avoid tapping the grid at certain times. Winston-Almanzar said he\u2019s looking at ways to use those payments to keep Reservoir\u2019s prices down.<\/p>\n While energy storage might get grid experts excited, it won\u2019t sell many water heaters. Most people replace their water heaters with whatever their plumber has on hand. The Reservoir team knew they needed to do more than build another heat pump water heater. \u201cThe sustainable product need to just be the better product,\u201d he said.<\/p>\n To make an appliance that customers will seek out, Reservoir has included a number of features that aren\u2019t found in typical water heaters.<\/p>\n The predictive heating feature ties in with energy storage. Reservoir\u2019s water heater will spend the first month in a home gathering information about water usage patterns to train a model. Once trained, it will run the unit\u2019s heat pump at the most efficient and cost effective times to save money while also ensuring ample supply.<\/p>\n Reservoir also added an ultrasonic flow sensor to help detect plumbing leaks throughout the home, sending homeowners an alert through its app. In the Max version, Reservoir added more features, including a recirculation valve to provide instant hot water and a mixing valve that can prevent pipes from freezing in cold snaps. In the Max version, a 50-gallon tank can deliver up to 150 gallons of hot water in \u201cparty mode,\u201d which can be set either on the device\u2019s touchscreen or through the app.<\/p>\n To keep pricing simple and to speed up the sales process, Reservoir has also started its own plumbing company. Winston-Almanzar said that decision was inspired by his experience at Formlabs. \u201cWe built direct relationships [there] because, in a lot of cases, distributors weren\u2019t embracing the new technology.\u201d<\/p>\n Reservoir\u2019s \u201cMax\u201d version costs $6,500, while the base \u201cCore\u201d version costs $5,000, installation costs included. Massachusetts residents qualify for a $1,050 rebate, bringing the price down significantly.\u00a0<\/p>\n At $3,950, the Core model is competitive with or cheaper than existing heat pump water heaters. For comparison, the 80-gallon AO Smith that\u2019s sitting in my basement currently costs about $3,500, and installation would add about $1,000. Traditional electric water heaters might cost less up front, at about $1,700 for an 80-gallon tank. But Winston-Almanzar said a Reservoir would save typical Boston homeowners up to $1,000 per year in energy costs. Breakeven should happen long before the Reservoir dies since\u00a0the company offers a 10-year warranty.<\/p>\n \u201cWe don\u2019t think it\u2019s enough just to have great technology. We think it needs to be affordable,\u201d Winston-Almanzar said.<\/p>\n Water heating is ripe for some new technology. The newest advance, heat pump water heaters, have failed to make a dent, commanding a small part of the market. If Reservoir succeeds, it might finally push them into the mainstream \u2014 and in the process take some pressure off the grid.<\/p>\n<\/div>\n When you purchase through links in our articles, we may earn a small commission<\/a>. This doesn\u2019t affect our editorial independence.<\/em><\/p>\n