California has set an ambitious goal: installing 6 million heat pumps by 2030. However, current progress suggests a steep uphill battle. With only 2.3 million units installed to date, the state needs to average roughly 2,000 installations per day for the next five years to meet its target.
The barriers to this goal are twofold: high costs and complex installation. A typical mini-split system can cost between $4,000 and $6,000 per zone and requires a full day of labor. To bridge this gap, a new startup called Merino Energy is reimagining the heat pump from the ground up.
The “Sticker Shock” Problem
The inspiration for Merino Energy came from the personal experience of its co-founder and CEO, Mary-Ann Rau. A former Apple engineer who helped launch AirPods, Rau found herself facing a massive obstacle while attempting to electrify her own home in San Francisco. Despite her professional background, the cost of installing heat pumps was a significant deterrent.
“If it was inaccessible for me — right, I’m privileged — it’s out of reach for the vast majority of Californians and Americans,” Rau noted.
This realization highlights a broader trend in the green transition: while the technology to decarbonize homes exists, the financial and logistical friction prevents mass adoption.
A Radical Redesign: The Merino Mono
Merino Energy is moving away from the traditional two-part heat pump architecture (which requires a bulky outdoor condenser connected to an indoor unit via copper lines) in favor of an all-in-one system called the Merino Mono.
The Mono’s design offers several key advantages:
- Simplified Installation: Instead of complex refrigerant charging and brazing, installers only need to cut two holes in the wall for air intake and exhaust. This reduces installation time to just one hour.
- Plug-and-Play Power: Unlike traditional systems that often require expensive electrical panel upgrades, the Mono plugs into a standard 120-volt outlet. If an outlet can power a microwave, it can power the Mono.
- Compact Footprint: The unit is roughly the size of a standard radiator, making it ideal for urban environments.
- Smart Integration: The system is Wi-Fi enabled and features occupancy sensors. The company is even exploring integrations with wearable tech, such as Oura Rings, to automatically adjust room temperatures during different sleep cycles.
Trading Scale for Accessibility
There is a technical trade-off to this streamlined approach. Because the system is miniaturized and kept entirely indoors, it sacrifices some peak efficiency. The Merino Mono has a SEER2 rating of 15.2, compared to 25 for larger, multi-zone systems.
However, Merino is not targeting large estates; they are targeting dense urban living. By focusing on apartments and condos where space is at a premium and traditional HVAC installations are physically or financially impossible, they are addressing a massive, underserved segment of the market.
Scaling the Solution
Merino Energy is currently testing its model in the real world, installing 48 units at the Civic Center Apartments, a low-income housing development in Richmond, California. This focus on affordable, high-density housing aligns with the company’s mission to make electrification accessible to more than just the wealthy.
While the company is starting in California, it plans to expand to Hawaii, Oregon, and Washington. With six installers already onboarded in the Bay Area and Los Angeles, Merino is now accepting pre-orders for delivery later this year.
Conclusion
By prioritizing simplicity and low entry costs over maximum industrial efficiency, Merino Energy is attempting to turn heat pumps from a luxury renovation into a plug-and-play appliance, potentially removing the biggest hurdle to California’s climate goals.
