Alphabet’s X unit calls itself the “Moonshot Factory.” Its mission is to place risky bets with potentially big pay offs. Yet one of its wagers is decidedly more down to earth. Dandelion, a geothermal heating and cooling startup for homes, was spun out of X as an independent company on July 6.

Dandelion plans to replace the heating oil, propane, and natural gas millions of people use to stay warm or cool their homes with geothermal energy. The company inserts plastic pipes 300 to 500 feet underground where temperatures stay a near-constant 50°F (10°C) during the winter and summer. A pump at the surface circulates water through the U-shaped pipes, and a heat pump, similar to a refrigerator that can operate in reverse, exchanges warm or cold air in the home. Heat from the ground is transferred indoors during the winter (electricity adds extra warmth), while the process is reversed in the summer to tap relatively cooler ground temperatures.

Dandelion

Little of the basic technology is new. Americans have been using springs and other geothermal sources to manage buildings’ temperatures since the 1800s. But Dandelion has redesigned the equipment, supply chain and sales pitch to attract buyers put off by the $40,000 to $100,000 price-tag for similar systems today.

First, it designed a faster and smaller drilling rig (instead of repurposing equipment for digging wells). That cut the cost in half and drilling time from three days to one. Custom heat pumps were designed in-house, halving the cost of the $10,000 device. Financing packages give homeowners predictable monthly payments under $200 with no down payment. Dandelion estimates its $20,000 system, fuel-free after installation, pays for itself in about 10 years (the ground system lasts as long as the house, and heat pumps must be replaced every 25 years). For an average New York homeowner using propane or heating oil, Dandelion estimates those savings over 20 years add up to $35,000 to $63,000, as well as averting more than 100 tons of CO2 emissions.

The startup is now operating in 11 New York counties where burning expensive fossil fuels makes switching to free geothermal a clear money saver. Dandelion plans to operate anywhere in the US with high heating or cooling costs.

X (formerly GoogleX) spun off the unit once Dandelion’s technology was proven out and the startup could present a compelling business case to outside investors (Dandelion recently raised a $2 million seed round).