Cala Systems, Predictive Intelligence, and the Better Way to Heat Water

If you haven’t yet heard about Cala Systems, it’s because the company is still new to the industry. Founded in 2020 in the depths of the pandemic, the company has been working  through phases of design, manufacturing and certification.

Early this August, Cala announced $5.6 million in seed funding coinciding with the commercial launch of its first product. Cala’s heat pump water heater is now available for preorder on its website, with initial deliveries expected in the first half of 2025.

But in a marketplace where everyone seems to be building heat pump water heaters—including some very well-established brands—how does an upstart company plan to win? We spoke with company CEO and Co-founder Michael Rigney to find out.

CONTRACTOR: I have to ask, what was it like trying to launch a new company in the middle of a pandemic?

Rigney: My co-founder and I actually met and got to know each other by going down to a park in Boston that overlooks the harbor, in the open air. We got a couple lawn chairs and we’d sit at a distance and we’d talk about what makes sense.

At the very beginning of the company, it was doing a lot of research. So, it worked out reasonably well over that spring and summer, and by the fall it was possible to do more and to begin hardcore development.

CONTRACTOR: What’s the Cala Systems value proposition? How is your product going to be different from the other heat pump water heaters out there?

Rigney: Let’s talk about how heat pump water heaters work. Today, their design focus is on, what is the temperature of the water is in the tank right now, and what to do in response to that. If the water in the tank is cold, they put in heat. If the water in the tank is too cold, they do that with the heating element, and if it’s not too cold, they do that with the heat pump. They are reacting to the temperature of the water in the tank.

From a fundamental design perspective, the Cala heat pump water heater is designed to be proactive, to learn what the needs and priorities of the home are—what does the homeowner want to accomplish?—and then to optimize water heating to meet those needs. The hardware and the software is designed to work together to learn about the home and do optimization.

A tank of hot water is the most flexible load in the entire economy. Nobody cares when you heat the water. It’s fundamentally shiftable in time. It’s essentially a battery that stores heat. But to take advantage of that really attractive capability you have to look into the future.

CONTRACTOR: Well—since nobody has a crystal ball—tell me a little more about how the system does that.

Rigney: First and foremost, we have a flow sensor on the water heater, so we learn what are the patterns of hot water use. Is there a lot of hot water use in the evening, as opposed to the morning. Then, on top of that, we’re bringing in a lot of external information. And that’s very different from what a lot of other water heaters are doing.

Whether that means the forecast for solar production on the roof, or price data for variable rates, or it is the “carbon intensity signal”—how clean or dirty the local electricity is at any given time—we’re bringing all of that information into the unit, not just on an instantaneous basis, we are bringing in what those parameters will be over the next 6 to 12 hours.

All of that information is coming into a predictive software control algorithm.

A homeowner might say, hey, I want you to heat water when my own solar system is supplying most of the power. That homeowner might say, I want you to heat water when my local electricity is really clean, because that’s what I value. We can do that. They might say, hey, my heat pump water heater is in the basement, my kids watch movies in the evening, I don’t want you to heat water between 6:00 PM and 10:00 PM. We can do that. And we’ll optimize around all of that.

CONTRACTOR: You spoke earlier about hardware and software working together. How are you taking advantage of all this rich data?

Rigney: It’s not just about the controls, and it’s not just about gathering all of that data. We have a variable speed compressor, and we have a mixing valve on the unit. The variable speed compressor allows us to change the speed at which we heat the water with the heat pump. By slowing that down we can get up to a 30% efficiency gain. And of course, we can speed the compressor up and still have the heat pump be adding more heat, thus decreasing the reliance on the electric heating element.

Then the mixing valve allows us to separate the water in the tank from the delivery temperature. If you have a big family and, say, everyone uses hot water on Tuesday morning, we will overheat the water in the tank then mix in cold water at the outlet to make sure everyone in the household is far more likely to get a hot shower, but we won’t do that unnecessarily because it takes more energy to do that.

Now, those hardware elements in the system, the variable speed compressor and the mixing valve, those allow for physical control of the system. Better software, in and of itself can only do so much, because you don’t have the physical levers to control the system. It takes the whole architecture, from the sensor at the top to the data feeds to the predictive control to those physical elements to really unlock optimization in a heat pump water heater.

CONTRACTOR: Is installation going to be different?

Rigney: No, Cala's installation will generally be the same as for other heat pump water heaters. That’s the thing about electric water heaters, if you don’t have to duct it—and we will have a ducting kit—you’ve got to put cold water in, you’ve got to take hot water out, you’ve got to put electricity in. So, the physical connections for any electric water heater are fixed. 

The ease or difficulty of installing Cala is dependent on the home, which is true for other types of water heaters, too. Open basements, garages, and, depending, attics are easier for Cala and heat pump water heaters generally. Tighter spaces are doable, in most cases, but require more work. Finally, of course, switching from fossil fuels to electric—that's half of homes—requires consideration for power.

We would love for your professional readers to know that we’re actively building our installer network. We have about 15 contractors around the country that we’ve met who have said yes, they would like to be a part of it. We’d like to have more conversations with pros as we build out that professional network.

CONTRACTOR: Thanks so much for talking with us today.

Rigney: My pleasure.