Exclusive: Arch CEO on expansion, what’s next for heat pumps

In February, Arch, a smart heat load and sales platform, snagged $6.2 million in funding to help contractors capitalize on the growing demand for heat pumps. It now processes over $1 million in monthly equipment sales, CEO Phil Krinner told Homepros in a phone conversation.

The big picture: Heat pumps have outsold gas furnaces for the past two years, but they’re still a bit of a “black box” — and more expensive than gas systems. 

• Quoting an entire heat pump system can take “3 to 5 hours, and the contractor may only close 25% of those jobs,” Krinner noted. 

• “The other 75 to 80% of that is a massive waste of time and money,” he added.

Details: Arch enables contractors to input a customer’s address, and uses publicly available data — the same used by home insurance companies — to analyze a home and recommend a complete system design, including indoor and outdoor units, and line sets.

• “A comfort advisor can create a presentation on the home before they show up,” Krinner said. “The contractor still goes on site, but they have a full heat load, home analysis, and system design ready… Then they can spend all their time educating the homeowner because most of the work is done.”

What’s happening: Since February, Arch has primarily invested the funds in its product, including integrating AHRI’s product directory. It’s also expanded to five states, with a sixth slated for this month.

• Krinner mentioned that contractors have started proactively building system designs — for existing customers with 15-year-old furnaces, for example — and leaning on them to generate leads when outbounding.

• “It’s like a new, hyper-personalized advertising tool. Customers came up with that, we didn’t.”

Looking ahead: There’s still industry skepticism about heat pumps and whether the math will check out, long-term. Krinner’s take is that as technology advances, upfront costs will drop and efficiency will go up. That, he says, is what will balance the equation. 

• “If you look at this year and next year, I wouldn’t be surprised if [skeptics] are right. In the beginning, everyone said solar wouldn’t work without [government] incentives, but then the supply chain got unlocked, production moved far East, and costs tanked.”

• “At first, no one could get a heat pump, but now that’s not an issue… There are so many research dollars [being] spent on heat pumps… that [innovation] will trickle down to commercial and residential. I think equipment will get cheaper and cheaper.”