An exciting class of technologies is poised to revolutionize the cooling landscape — solid-state, or those that use solid materials and an applied field or force to generate heating and cooling. While startups are still improving performance and optimizing to reduce cost, there is promise that solid-state cooling technologies could reduce energy consumption, eliminate harmful refrigerants used in today’s heating and cooling systems, and majorly disrupt the market. This is the first of a three-part series exploring the potential and landscape of solid-state cooling.

The Challenge: Balancing access with emissions

Cooling — both air conditioning and refrigeration — is no longer a luxury but a global necessity, essential for human productivity, health, and survival. 2024 was the hottest year on record, and for the first time, the global average temperature surpassed the 1.5°C threshold set by the Paris Agreement. Sixty percent of the global population now faces deadly heat conditions, of which a third have little to no access to cooling solutions. This creates a fundamental dilemma: balancing comfortable living conditions with the urgent need to reduce carbon emissions.

Carbon emissions from cooling are significant and growing rapidly. Most units purchased and in use are inefficient — the average efficiency of air conditioning (AC) units sold today is less than one-third that of the best available technology. Refrigeration and space cooling are responsible for over 10 percent of global greenhouse gas emissions, or 4.4 GtCO₂e annually, with an additional 1 GtCO₂e from food loss due to inadequate refrigeration. Cooling-related emissions are expected to double by 2050, driven by increasing temperatures and a growing middle class. Beyond emissions, cooling is expected to drive peak electricity demand, especially in hot countries, putting additional strain on already stressed grids and potentially requiring new power plants to meet demand.

To scale access and cut emissions, we need both evolutionary and revolutionary innovations

Evolutionary advancements offer improvements to existing systems but are piecemeal rather than transformative. Vapor compression systems, which are used in 95% of global cooling equipment, have been the backbone of cooling technology for close to a century. Vapor compression relies on expansion and compression of gaseous refrigerants to generate heating and cooling.  Incremental improvements in vapor compression systems include improved efficiencies, advancing low global warming potential (GWP) refrigerants, and improved compressor technology.

Revolutionary technologies are non-traditional approaches that can significantly reduce emissions and/or do not rely on liquid refrigerants. To date, the two primary revolutionary cooling approaches include: solutions focused on humidity control that cut down energy required for cooling air in vapor compression systems (such as desiccants, which dehumidify air before cooling and can reduce energy consumption by 80%, and metal organic frameworks, or MOFs) and solutions that use solid materials for cooling rather than fluid refrigerants (solid-state systems).

We need to push immediate adoption of the best available mature technologies in markets where AC demand and purchasing power is high. At the same time, we need revolutionary technologies to drive rapid improvements in efficiency, increased access, and emissions reduction. The promise of revolutionary technologies, like solid-state cooling, is that they represent a huge leapfrog potential — they can offer step-change improvement in performance and will be maturing (and getting affordable enough) just as demand for ACs starts to take off in many parts of Asia and Africa.

What is solid-state cooling?

The core principle of solid-state cooling systems is the caloric effect, which means that a solid material can change temperature by applying an external force or field. In more scientific terms, a solid material can heat up with the application of an external force or field without heat being added or removed from the surroundings. Instead, the temperature changes because the material is compressed, expanded, magnetized, etc. This type of temperature change is referred to as adiabatic from the Greek adiabotos, or impassable — as in heat does not pass directly into or out of the surroundings. To give another example, you may have heard the expression “warm air sinks” — what really happens is that as air sinks, increased atmospheric pressure causes it to condense and warm up, and undergo an adiabatic change. As air rises, reduced atmospheric pressure allows the air to cool and expand, often forming clouds.

You can experience this yourself with just a balloon — if you take a balloon and stretch it, you can feel that it heats up where stretched. In this case, the external force is stretching. If you keep the balloon stretched, it will eventually return to room temperature. Then, un-stretch the balloon and you’ll feel it cool significantly. Congrats, you just experienced the elastocaloric effect!

There are many theoretically possible solid-state cooling methods that show potential for both cooling and heating. This series discusses solely the cooling application potentials and focuses on four methods that are the most developed: magnetocaloric (magnets), thermoelectric (voltage), elastocaloric (mechanical stretching), and barocaloric (pressure). Regardless of the caloric material being used and the external force or field applied, they all follow the same process as the stretched balloon:

1. Application of an external force or field causes the material to heat up.
2. That heat is then released until the material returns to equilibrium (room temperature).
3. After the external force or field is removed, the material cools significantly.
4. The material then pulls heat from its surroundings to return to equilibrium.

What makes solid-state cooling so promising?

There are two key reasons solid-state cooling is compelling. First, solid-state cooling systems have the promise to be more efficient than standard vapor compression systems (which comprise 95 percent of the market today), reducing the energy needed for the same level of cooling by between 20 to 47 percent. Improved efficiency can reduce the overall energy consumption (and energy costs for owners) of cooling systems, reducing the strain on stressed grids and the need to build new power plants. For example, the Department of Energy estimated that elastocaloric solid-state cooling, at scale, could save over two quads of energy used for cooling per year in the US — 46 percent of US cooling energy demand — or the equivalent of 117,600 wind turbines running for a year.

Second, these systems eliminate fluid refrigerants that standard vapor compression cooling systems rely on and have high global warming potential, up to thousands of times more potent than carbon dioxide. Refrigerants often leak from standard vapor compression systems during installation, maintenance, operation, and at the end of the life of the product. Annual leakage of refrigerants has been estimated to be between 4 and 22 percent. In total, refrigerants contribute an estimated 30 percent of total cooling equipment emissions. Given the uncertainty around tightening regulations on high global warming potential refrigerants, companies are seriously evaluating solid-state cooling to get ahead of future regulatory risks that could cause major disruptions in operations down the line.

Beyond emissions reductions, solid-state cooling can provide precise temperature control which can improve thermal comfort in the home and office and may be essential in applications like advanced manufacturing facilities. Additionally, some solid-state cooling approaches — thermoelectric and magnetocaloric – have few to no moving parts, which can enable silent operation, reduced maintenance needs, and potentially an extended life. Some systems, like thermoelectric, have the potential for modularity, meaning it can be scaled up or down depending on cooling needs, or components can be swapped over time as performance improves. These benefits may be just as important as energy savings to building users.

Where is solid-state cooling in development today, and what’s next?

We’re seeing a surge in solid-state startup landscape, driven by the increasing demand for energy-efficient and environmentally friendly cooling technologies. Between 10 to 20 startups are researching and developing prototypes and early models for a variety of cooling applications, including room AC units that can replace through-the-wall systems (what you typically see in hotels) and refrigeration units.

The biggest selling point for solid-state cooling is that it eliminates liquid refrigerants, which contribute greatly to global warming potential, and many in the industry are looking at solid-state as a way to get ahead of future regulations and refrigerant transition. The theoretical potential of solid-state cooling efficiency is substantial, but continued research and development (R&D) and funding is needed to achieve efficiency and cooling capacity potential to bring these products to market. Many of the systems are currently quite bulky, so systems design optimization will be needed to develop products for mass adoption.

The cost of solid-state cooling is currently at or above that of best-in-class cooling systems (based on interviews with solid-state startups) but as with all technologies, this will improve over time with additional R&D and market interest. While some commercial customers are willing to pay early price points for efficiency and cost savings, and to stay ahead of regulatory changes, these systems are not yet affordable for those who need them most — including the estimated 2.5 billion people in developing countries entering the market to purchase their first AC unit. First-time buyers tend to choose cheaper, less efficient models that could double energy demand by 2030 and increase 5 times by 2050, making adoption of more efficient technologies, like solid-state cooling, of the utmost importance.

Even though solid-state cooling is quite early in development, we’re already seeing a growing landscape of startups and some serious investments being made, including a recent $50 million raised by thermoelectric startup Phononic. However, most startups are skewed earlier — either just spinning off from academic labs or working on initial pilot testing. Third Derivative supports two promising solid-state cooling portfolio companies, Magnotherm (a magnetocaloric startup focused on refrigeration applications) and MIMiC (a thermoelectric startup focused on room air conditioning). Solid-state cooling technology developers have received venture capital (VC) investment from notable VC and growth investment groups globally, including Extantia Capital, Khosla Ventures, Kiko Ventures, Goldman Sachs, Carrier Ventures, and Breakthrough Energy Ventures.

What’s next for these startups? The conditions are right for solid-state startups to refine their technologies and grow. Continued R&D funding, investment, and shifting regulations toward increasing efficiency and reducing refrigerant emissions can enable solid-state startups to take off. In the following articles of this three-part series, we will deep dive into the opportunities and challenges for these four solid-state cooling technologies to scale, and investment traction to date.

The authors would like to thank Blue Haven Initiative for funding this research, and Shruti Naginkumar Prajapati and Ankit Kalanki for their contributions.