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Energy Catalyst Co-founder Leverages “Superpower” of Heat Pump KnowledgeTo Advance Geothermal Energy in Upstate New York

From a near-empty bank balance to securing more than $9 million in federal and state grants in one a year might sound like overnight entrepreneurial success. But when Capital Region startup Energy Catalyst and its business partner, Arkansas-based Hydro-Temp, scored those major grants last November to advance manufacturing of their new, sustainable heat pump technology, it was a high point on a long road towards success.

Energy Catalyst, co-founded by Matt Desmarais, offers an innovative technology—an Energy Star-certified ground source heat pump that repurposes existing heating infrastructure in homes that rely on hot water baseboard heating. With the U.S. Department of Energy's $5 million investment, combined with another $4 million in grants from New York State and other sources, the company is expanding its manufacturing capabilities in New York’s Capital Region, building a factory and training facility.

Desmarais grew up in Vermont and attended Clarkson University in Potsdam, where he got his degree in mechanical engineering, with minors in mathematics and sustainable energy. “I really felt that energy was going to be my area,” he said. “I was passionate about it.”


Upon graduating, he worked for Siemens in Latham, NY for a few years, but was eager to head overseas, specifically to Europe. “Of course, it seemed like a fun thing to do—something that my now-wife and I believed might be harder to do as we got older,” he said. “But I was hoping there could be a strong educational opportunity as well, for learning a new language and gaining a new perspective on the energy sector. European head pump technology is far ahead of what we have in America. I wanted to learn what makes their technology better, with the goal of bringing that back to the U.S.”


With student visas, Desmarais and his wife settled in Strasbourg, France, on the German border, and spent their first year learning to speak French. When Desmarais got proficient enough, he began working for Eco Green Energy, a French company specializing in high-tech heat pumps and sustainable energy solutions.


“They were focused on industrial cooling tower heat recovery, which was totally new to me as it isn’t done in the U.S.,” said Desmarais. “I was able to learn how they think about energy. I traveled for them, and I worked on some great projects with companies like Ford and Stella Artois.”


“I absorbed everything like a sponge,” added Desmarais. “I came back to the States with confidence in the knowledge I had gained. It felt like a superpower to have that deep understanding of heat pump technology in industrial environments.”


Upon returning to the U.S., Desmarais went to work for a steam boiler company but continued to think about heat pumps and geothermal energy. He explained that there are roughly 9 million homes in the Northeast with hot water heating systems that could ultimately be adapted to use heat pumps as a primary source of energy, resulting in a significant reduction of greenhouse emissions. Such heat pumps utilize the stable 50-degree temperature of the earth as a source of energy. In a typical system, for every four units of energy released into a building; three would come from the ground and one would come from the electricity used to extract it from the ground. Essentially you have four units of heat at the cost of one. Desmarais pointed out that the up-front cost is greater, but the result is a more efficient way to heat or cool a building. 


“I could see the writing on the wall—even back in 2019, I could see that New York State wanted to have heat pumps as a primary source and that the technology would eventually have its day,” Desmarais said. “I thought upstate New York might be a good market, so to test the waters I did a geothermal project in Kinderhook with Sam Chapin, who became my co-founder. We replaced the hot water boiler in his home with a heat pump, and we were successfully able to make the switch to heat his home with the heat pump technology.”


“I realized that we could offer a heat pump-based, hot water boiler replacement for baseboard and radiator heating, Desmarais said. “There’s a huge market out there—I could drive a truck through it. I kept asking myself, why is there not a better product for this market? I realized that what was currently available was just not efficient.”


Desmarais described the big “aha” moment he had while data-logging buildings—that is, measuring the building’s capacity to release heat. He was comparing the measured heat load of the building to the heat that can be released by baseboard or radiators at a relatively low temperature (120°F).


“I did this on twelve buildings, and what I found was that most of these buildings had oversized heat emitters that could provide about 80-90 percent of the building’s heat with low temperature hot water,” he added. ”Heat pumps are far more efficient at low temperatures, and I knew that we could increase the efficiency by 35 percent and match the heat load better by designing a hybrid hot water system with a hot air supplement.”


Desmarais did two more residential projects. “I felt like I was really homing in, although it was still just a hobby. I didn’t know if I’d really be able to give it a go until the pandemic hit and I had more time to experiment. I became the mad scientist in the basement; I kept working at it and redesigning it.”


Desmarais and Chapin secured an initial contract from NYSERDA for $50K; with that he was able to install five heat pumps in residential homes, in 2020-2021.


“Honestly, that was not a great time,” he added. “I was building the pumps in my basement. The pumps worked but the quality was not what it needed to be; parts were failing. It was a brutal learning experience—I had really gotten myself over my skis. I put every penny that I had into it.”


Towards the end of that NYSERDA grant, Desmarais found a contract manufacturer that could build a high-quality product. But it was an inflection point for determining whether they would move forward as a company.


Desmarais learned about the regional I-Corps short course, co-hosted by the NYC Innovation Hot Spot, and participated in the Winter 2022 cohort. “That helped us see the market from the perspective of the installing contractor, and to consider how they see their employees and customers and what profit they expect,” he said. “We changed our business as a result; we reset our business model and our outlook.”


“We learned that to make a great product, you always have to ask what can be done better,” he added. “We continue to ask these questions after every installation. We’ve also learned that tiny changes can make a huge difference.”


At that I-Corps course, Desmarais connected with adjunct teaching team member Heidi Knoblauch, Senior Director, Entrepreneurship Development, Empire State Development Corporation.


After completing the regional I-Corps course, Desmarais and his team wanted to start selling. With support from the New York City Hot Spot, they were able to submit compelling grant proposals. In May 2023, Desmarais attended their SBIR/STTR workshop, leading to the NYC Innovation Hot Spot sponsoring 10+ hours of grant writing expertise.


“It was a combination of smart strategy and hard work,” Desmarais said. Tony Collins, the former president of Clarkson, came on as an investor, sharing advice and counsel along the way. Energy Catalyst also got their product certified by Energy Star in 2023. Soon, the company had tripled production and sales.


Energy Catalyst is buying a building in upstate New York that will eventually become a full manufacturing facility producing more than 2,000 heat pumps annually. Their goal is to be up and running within the grant’s three-year timeframe. Energy Catalyst is also building a training center on site, to help industry workers to become more familiar with geothermal energy and more readily transfer their skills to heat pump technology. 


Energy Catalyst continues to take advantage of NYC Innovation Hot Spot and Capital Region resources that support entrepreneurial efforts. “We are developing a multi-family version with RPI and we are also working with the Center for Economic Growth (CEG), a regional nonprofit economic development organization for the Capital Region,” said Desmarais. “And our former mentor for I-Corps, Heidi Knoblauch, remains a fountain of wisdom for us.”


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