A Startup Is Making Water Heaters That Save Energy and Help the Power Grid

Water heater startup Reservoir has raised $8 million from investors, led by Asymmetric Capital Partners with participation from Founder Collective and MCJ. The Boston-area company, co-founded by Luke Winston-Almanzar, Gabriel Parisi-Amon, and Jake Felser, had installed roughly 100 units as of August 2026 and plans to reach about 1,000 by the end of 2027. TechCrunch

Reservoir's product is a heat-pump water heater. Instead of using electricity to directly heat water the way a traditional heater does, it pulls heat out of the surrounding air and moves it into the water. Think of it like a refrigerator running in reverse: a fridge pulls heat out of food and dumps it into your kitchen; this device pulls heat out of the air and puts it into your water tank. That approach uses far less electricity.

The unit spends its first month in a home collecting data on when the household uses hot water. It then uses that information to schedule heating for times when electricity demand is low and prices are cheapest, without the homeowner having to do anything.

The efficiency numbers are striking. Reservoir's heat pump is nearly four times more efficient than a standard electric water heater and five times more efficient than a natural gas unit. That matters because heating water is one of the biggest energy uses in a home, and most water heaters waste a lot of energy. A heater that is far more efficient and also shifts its electricity use to cheaper off-peak hours saves money on both sides of the meter.

Beyond heating water, the unit includes a sensor that detects plumbing leaks and sends alerts to homeowners through a phone app. The Reservoir Max version adds a valve that provides instant hot water at the tap and a feature that can prevent pipes from freezing during cold weather. In "party mode," the Max version's 50-gallon tank can deliver up to 150 gallons of hot water by reheating faster and keeping hotter water at the top of the tank, rather than needing a bigger physical tank.

Winston-Almanzar was previously chief business officer at Formlabs, the 3D printing company. That background in a hardware category that went from niche to mainstream over roughly a decade is worth noting, though the comparison between 3D printing and home energy hardware is imperfect at best.

The most interesting part of Reservoir's pitch is what these heaters can do for the power grid. The company says its units can relieve strain on the grid at the neighborhood level, where the local wires and transformers that deliver power to homes are often the bottleneck when more households switch to electric appliances. Further out, Reservoir intends to group its installed heaters together into utility programs that manage electricity demand. Each water heater would act like a small thermal battery, absorbing renewable energy when it is abundant and reducing its electricity use when the grid is stressed. This idea has been discussed for years, but it has been hard to pull off for homes because most water heaters lack the sensors, internet connection, and smart scheduling needed to make it work without leaving homeowners without hot water. Reservoir built its product around those requirements from the start.

The $8 million will fund more installations in the Boston area, which serves as the company's initial market. The jump from 100 to 1,000 units over roughly 18 months is a steep but not extraordinary ramp for a hardware startup moving from early deployments toward volume. The harder question is whether the unit economics and installation logistics can scale at that pace, particularly given that residential heat-pump water heaters require plumbing and electrical work that varies significantly by home.

What Reservoir is building sits at the intersection of several trends that have been converging slowly: replacing gas appliances with electric ones, electricity pricing that changes by time of day, and the broader push to make homes more energy-efficient. None of these is new. What is new is a company attempting to address all of them in a single consumer product rather than treating grid services as an afterthought bolted onto a conventional appliance. Whether that integrated approach earns enough consumer adoption to produce a fleet large enough to matter for grid operators is the open question this seed round is buying time to answer.