Boulder, CO

Colorado company expands to meet expected demand for electric heat pumps, stoves

Matt Whittaker

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Two heat pump condensers outside of a building.Elephant Energy

By Matt Whittaker / NewsBreak Denver

(Boulder, Colo.) A Front Range home-electrification company is expanding its team and service area in anticipation of increased demand due to high natural gas prices and federal incentives to switch to electric heat pumps and stoves.

After closing a $3.5 million round of funding in September, Boulder-based Elephant Energy, which has focused on the Denver-Boulder corridor since 2021, plans to expand into Fort Collins starting in January. The company is also looking to expand outside Colorado next year but hasn’t yet confirmed those markets.

Amid expectations that its installations will more than double this winter compared with fall 2022, Elephant Energy plans to more than double its full-time team of eight by the second quarter of next year. It is also expanding its team of contractors.

The expansion comes as natural gas prices have skyrocketed. In the United States, prices rose sharply earlier this year as consumption grew faster than production as the nation exported more liquefied natural gas to Europe to replace supplies from Russia amid the war in Ukraine. 

Meanwhile, despite rising prices, domestic utilities used more natural gas to generate electricity for home cooling because of higher-than-normal temperatures. There have also been natural-gas-fired capacity additions as coal-fired generation declines.

In August, natural gas delivered to Colorado residential customers hit $22.27, an August record when not adjusted for inflation and just shy of the inflation-adjusted August 2008 peak of $22.33.

This winter, the U.S. Energy Information Administration expects households in the West that use natural gas as their primary space heating fuel will spend $834 from October through March, a 29 percent increase from last winter.

That’s not just because natural gas costs more and utilities such as Xcel Energy—the largest utility in Colorado and the main natural gas and electricity provider in the Denver metro area—pass costs on to consumers, including from last year’s Winter Storm Uri. It’s also because this winter is expected to be slightly colder than last, meaning it will take more energy to keep a house at a given temperature.

While Elephant Energy expects the high natural gas prices to fuel demand for its services, the company also thinks the Inflation Reduction Act’s incentives will spur switching from gas to electric.

“Upgrading lowers monthly utility bills by hundreds of dollars per year, improves air quality in homes by eliminating harmful particulates from burning gas, and dramatically reduces a home’s carbon footprint,” the company said. “Switching to electric costs less up front than replacing a traditional furnace and air conditioner, and every installation involves a tax credit, rebate, or other incentive.”

Beginning in January, homeowners can deduct up to $2,000 from their taxes under the Inflation Reduction Act to replace old furnaces, water heaters and gas stoves with electric heat pumps, heat pump water heaters and induction stoves. That’s on top of local rebates worth thousands of dollars.

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Matt Whittaker writes about natural resources industries, including oil and gas, mining, renewable energy, agriculture and cannabis. He's been based in the Denver metro area since 2013. You can follow him on Twitter @mattswhittaker.

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