Chi Sage to globalize Chinese heat-pump tech

Philadelphia, Pa.-based Chi Sage Systems is commercializing a technology to reduce the waste of energy and water in typical heating, ventilation, air-conditioning and refrigeration (HVAC_R) systems in homes and commercial buildings.

CEO Mot Levi told the Cleantech Group the startup put a spin on the typical heat pump technology, which is extremely efficient but limited to places with underground hot water.

Chi Sage’s proprietary system uses highly efficient heat pump technology that can find a heat source from any type of water, including ocean water, lake water, or even sewage. That variety of sources opens up the possible applications for the technology, including major cities, Levi said.

In addition to energy efficiencies, Chi Sage’s system eliminates the need for a cooling tower, reducing water waste.

Chi Sage bought the intellectual property rights to the technology from China-based Jin Da Di, which installed a 9 megawatt system at the Beijing Southern Railway Station in 2008. Jin Da Di still holds the rights to develop the technology in China, while Chi Sage plans to commercialize it in the rest of the world.

“A lot of people talk about technologies going to China, but this is innovation coming from China,” Levi said.

Already, the company is in the engineering and design phase for 10 projects, including a 54,000-home development in Chile and an art museum in Philadelphia.

The company has been self-funded with about $500,000 but is now seeking $3 million for business development to speed the deployment of its pipeline of projects. Levi said the current projects could be worth up to $15 million in annual revenue. Levi said he hopes the company’s first system will be installed within six months.

Chi Sage’s business model is to own, install and maintain the heat pump systems, signing 15-year contracts to receive payment for energy produced by the system. Chi Sage expects a small portion of customers to buy the system, which has a lifespan of approximately 20 years.

Chi Sage’s team of 20 employees sells the systems, but outsources the engineering and construction work. Chi Sage purchases the complete system from Jin Da Di but plans to get more involved in designing and engineering the systems as the startup grows.

The biggest payoff would be in very cold climates that currently use boilers to heat water. Levi said Chi Sage’s system is four to five times more efficient. The system is also a good alternative to typical air-conditioning, which is basically an inefficient heat-pump, he said. Levi said the technology can’t offer much savings in moderate climates such as San Diego. 

In Chi Sage’s system, the outside water source is fed into the heat pump, where it exchanges heat with clean water. The water sources don’t mix, and the clean water is fed to sinks and showers.

“We don’t need to process it, clean it, or desalinate it. We just take the water and use it as a heat source, and then return it back,” Levi said.

Chi Sage’s system finds an added use for sewage before sending it for treatment. The value of sewage as a heat source is that its temperature fluctuates very little, typically from about 60 to 70 degrees Fahrenheit.

“The temperature profile for sewage is perfect because we want a source of water that’s hotter than the environment in the winter, and in the summer colder than the environment,” Levi said. “It’s already there, it’s insulated, and it’s contained in a network of pipes. It’s man-made geothermal.”

Similarly, Levi pointed out that the temperature of water in the ocean varies according to depth, allowing the company to always find a temperature that's cold or warm enough to use in the heat pump. 

Chi Sage Systems is one of three new clean technology companies the Cleantech Group added to its innovation pipeline this week, available exclusively to members of its Cleantech Network. Members can click here to search the database.

Interested in emerging cleantech innovations? Here are two new companies added to the Cleantech Group's database this week also looking for funding:

• Pittsburgh-Pa.based EcoClean Burners is seeking $2.5 million in venture capital for its technology to produce energy from the combustion of plastic garbage. The company is also seeking $1 million in stimulus funding from the state.
• UK-headquartered Bronzeoak is seeking $250 million to invest in additional bioethanol and bioenergy production facilities in the Philippines and Indonesia. The company is seeking funding to build a second 40 million-liter per year ethanol facility in the Philippines.

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