Friday, June 14, 2024

Podcast with Sunnova’s John Berger, CEO, and Michael Grasso, CMO

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One of the world’s largest installers of photo voltaic + storage power methods has a groundbreaking and business altering proposal to construct a neighborhood that runs on native power. Their proposal is at the moment in entrance of the California Public Utility Commission, however naysayers try to squelch the dialog.  Join host Bill Nussey as he talks with Sunnova’s CEO, John Berger and CMO, Michael Grasso. They share the background on what the clear tech chief is proposing and why;  the way it will profit customers; and what critics are saying and doing to sideline the hassle.

Here are just a few of the insights from John and Michael…

“…. our [solution] permits the patron to get a greater price. There’s no diminishment of their security. ….we offer extra alternative and higher reliability… [we offer] a very significant development towards the state’s personal environmental objectives. Yet the CPUC’S public advocates workplace is making an attempt to squelch us and forestall us from being heard. And we don’t know why.”


“…. But whenever you take a look at what a microgrid means to individuals and push on it just a bit bit, it actually implies that they’ve alternative.”


“…That’s what we’re making an attempt to say: look, we’ll ensure that everyone is served [fairly]. We’ll play by the identical guidelines as as everyone else. We simply need individuals to have entry to those new applied sciences, these new companies… the place they’ll get a greater power service at a greater value.”


“……:we’ve got virtually 40,000 prospects, On Puerto Rico, over 30,000, which have battery storage alongside their photo voltaic methods. And in the event you take a look at what occurred within the 10 days behind the hurricane, solely 59 of our methods, our storage methods didn’t carry out to the expectation that we had for ’em and required some stage of servicing.


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Bill Nussey and Dr. Jemma Green during the recording of the podcast

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Transcript

Bill Nussey:

Welcome everyone to the most recent episode of the Freeing Energy podcast. I’m Bill Nussey, the host and the co-founder of the podcast. Really excited to dive in in the present day on, I believe, some of the fascinating and information breaking tales that’s occurring, as a result of within the business that we’re in, information breaking tends to occur over months. Super thrilling although. But as at all times, I wish to begin out by thanking everybody who’s investing a couple of minutes of their extremely busy schedules to hear in and be taught and be a part of what we name the native power revolution.

And as you’re going to be taught in the present day, some actually huge issues are occurring. This world that we’ve been speaking about for just a few years is beginning to catch on. We are the precipice of considerable change and it’s thrilling. And our friends in the present day are the middle of some of the thrilling adjustments that’s being raised and mentioned since this business began a 100 years in the past. So our friends in the present day are John Berger, who’s the CEO of Sunnova, and Michael Grasso, who’s the chief advertising officer.

And most of who they’re, however in the event you’re not accustomed to Sunnova, they’re one of many main photo voltaic installers on this planet, actually within the United States. They have pioneered numerous improvements. They are working in among the most necessary components of the nation, the California, which we’re going to speak about in the present day. For these of you who’ve learn the guide, I talked about Sunnova’s groundbreaking work in Puerto Rico, placing photo voltaic plus battery all through that island quicker than simply about anyone.

And they’re as much as one thing so huge and so new. Lots of you already know what it’s. But earlier than we bounce into this unbelievable story that they’re serving to inform for this business, I wish to take a couple of minutes simply to begin off with somewhat background on Michael, as a result of most of you bear in mind in the event you’ve been listening for a very long time, that John has been on the podcast about two and a half, three years in the past. And so we’re going to simply choose on Michael in the present day.

And wished to get a fast sense of your background. You began down the trail in telecommunications proudly owning a grasp’s of science in telecommunications administration. So I believe your mother and father are in all probability anticipating you to be the CEO of AT&T. Where did you go flawed and the way did you find yourself being one of many main voices within the new world of fresh power?

Michael Grasso:

That’s an ideal query. I completely loved my time in telecommunications about 15 years working throughout the nation with a number of manufacturers that ultimately grew to become the AT&T model on the finish of the day, constructing nice companies throughout that business. But what introduced me into power is the concept all the pieces that we do in our society relies on power. You can have the most effective cellphone on this planet, however in the event you don’t have the power to energy, it doesn’t do you a lot good.

At the top of the day, I believe what’s actually driving our financial system and driving our progress as a inhabitants and constructing on our capability to be people and ship nice innovation is power. It’s actually the core. And the concept we could be part of that and particularly within the clear and distributed area, be supplying power and power safety to customers is a motivator that helps me get off the bed every single day and drive me by all the pieces that I do.

Bill Nussey:

I believe everybody who listens into this feels the identical approach. And we’re all extremely glad that you simply made the change as so many individuals who hear into our podcast are doing as nicely. So earlier than we get into in the present day’s sizzling matter, let’s do some catch up. So John, you had been on the podcast just a few years in the past and also you talked somewhat bit in regards to the imaginative and prescient that you simply had been casting for Sunnova. And you guys are primarily based in Houston, which is, you talked somewhat bit about, what an fascinating place it was to construct a photo voltaic firm.

And Texas having many years, a century of being the middle of power for the United States grew to become considerably notorious for its grid struggling a winter in the past. And we had been all considering of you and Sunnova and all your prospects. So how did that have modified the views of individuals in Texas and across the nation when the grid stumbled so badly?

John Berger:

Well, it’s not simply Texas nevertheless it’s different areas of the nation as nicely that basically been seeing a decline in reliability within the centralized system. Most individuals name {that a} grid or the grid. There isn’t any grid that goes throughout the complete nation. It is a set of regionalized grid methods. And whenever you take a look at Texas, it personifies that regionalization, let’s assume, of the grid. We are, for essentially the most a part of the state, considerably remoted deliberately from the opposite larger methods, if you’ll, from the japanese and western interconnects. And that additionally received a number of notoriety, let’s assume, in that storm.

At the top of the day although, it actually wouldn’t have made that a lot distinction as a result of there was a number of stressing that was on the japanese facet by way of the japanese interconnect. And so that they had been present process their very own stresses.

The Texas scenario fairly merely is that Texas has been rising quicker than most different areas of the nation for variety of years, continues to take action. And actually we had put a market primarily based system in place, not not like in California for example, the place on the wholesale facet of issues, you had impartial mills that will are available in, provide energy, receives a commission for it and so forth. But there was probably not a mechanism to cost reliability. In truth, reliability within the centralized system for over a century has primarily been mandated as what we name a reserve margin of 15%.

And even that, on a system-wide foundation, that could possibly be advantageous in the event you comply with it. Texas was beneath it, that 15%. But whenever you begin entering into people, whether or not they’re companies or properties, that doesn’t do you an entire lot of fine. They say, “Well, the system was advantageous, however the energy line to your home failed for no matter cause.” And so that you’re seeing lots of people over time get backup mills that run on pure gasoline and diesel and so forth. And so this has been a long run development, is my level.

And then once we received into the Winter Storm Uri, lastly there’s expertise that’s clear and is offered in a service from an organization, like a service supplier like Sunnova with photo voltaic and batteries and now EV charging and cargo administration and sure, mills as nicely could be part of the answer, and software program that may optimize these properties to primarily have their very own energy and be capable of function off the grid, so to talk. So that was one thing that, by way of the demand for that capability to function off the Texas system or the ERCOT as we name it, clearly in the event you had a service from Sunnova otherwise you had one thing from one among our opponents, you had been in nice form. And in the event you didn’t, you weren’t. And it was just about that straightforward.

So everyone took observe of that in Texas and went out proper after that and began, “Hey, I’m getting photo voltaic and batteries. I’m getting a photo voltaic service from Sunnova.” And we’ve additionally seen a continuation of that, despite the fact that it’s been nicely over a 12 months since that occasion.

Bill Nussey:

Well you guys had this imaginative and prescient years and years in the past. And once I was writing the guide and studying about the place this mattered essentially the most, I went all the way down to Puerto Rico and delighted to see that Sunnova was the biggest supplier of photo voltaic and battery methods, actually one among, in Puerto Rico, the biggest.

John Berger:

By far.

Bill Nussey:

By far. There you go. So you guys are pioneering this concept and placing 1000’s and 1000’s of those methods in place when everybody else was nonetheless questioning how necessary they had been. And alongside comes Hurricane Ian. And did that verify this imaginative and prescient in your buyer’s wants, or what did you guys be taught from that? Did it work? Did the imaginative and prescient come true?

Michael Grasso:

Yeah, Bill, the imaginative and prescient completely got here true, particularly after the strike on the island from Hurricane Ian. We have virtually 40,000 customers-

Bill Nussey:

40,000. Wow.

Michael Grasso:

… on Puerto Rico. Over 30,000 which have battery storage alongside their photo voltaic methods. And in the event you take a look at what occurred within the 10 days behind the hurricane, solely 59 of our methods, our storage methods didn’t carry out to the expectation that we had for them and required some stage of servicing.

Bill Nussey:

Incredible.

Michael Grasso:

So over 30,000 methods carried out implausible on the island. For these prospects that had been residing on our photo voltaic and battery storage, they averaged 5.3 days that they used power solely from the system. And a few of our prospects needed to reside on these methods for as much as 10 days or extra. It simply tells you about each the resiliency that we’re in a position to present by Sunnova, and in addition the frailty of the grid that’s working on the island, and why it’s so crucial that we give you a greater answer for these customers as a result of they didn’t have entry to grid provide. And the purchasers that had been depending on the centralized grid discovered themselves in a scenario the place they didn’t have energy and that energy outage prolonged for such a major time period.

Bill Nussey:

It’s a sport changer. And what’s so cool about our fundamental dialog in the present day is you guys are taking this, what appears to many to be a visionary, to all of us appears sort of apparent, however this visionary concept and taking it to the following apparent stage. And we’re going to leap into that in only a second. But earlier than we do, let’s lay the groundwork on this. Why change within the grid is tough, notably within the state of California the place we’re going to focus in a second.

You’ve received an unbelievable rat’s nest of laws and regulators and legal guidelines. Rat’s nest just isn’t a good phrase. Actually, when it really works and it has labored for many years, it’s efficient. But whenever you wish to drive change and also you wish to enhance issues, you don’t wish to take the stuff you’ve realized in Texas and Puerto Rico and also you wish to take it to the following logical step, it might probably develop into an encumbrance. So give us a fast training on what an innovator in native power is dealing with on the subject of laws and jurisdictions and legislations, notably in California.

John Berger:

So yeah, I believe it’d be nice, Bill, to return and simply have a fast historical past of how did we get right here with our system and the way in which that we’ve arrange. And in the event you return nicely over a 100 years in the past and even return into the race or conflict between Edison and Westinghouse/Tesla, with the Niagara Falls, what you’ll discover is that, primarily, you’ve gotten power sources or BTU and then you definitely’ve received conversion gadgets that takes that BTU and makes it an electrical energy, as expressed in megawatt hour, kilowatt hour, no matter.

If you return to even that Niagara Falls, the very first main centralized plant, you had the BTU, which was the falls, that’s clearly centralized. And then you definitely had the conversion machine which was the steam turbine, which was made way more environment friendly to have massive scale. So what did you do? You generated the electrical energy there on the falls and also you wired it out. And that’s precisely what they did. And this received into the entire battle on AC versus DC that we, I believe, all know of. We know clearly who received that battle. It wasn’t Edison.

And the rationale I provide up that he didn’t win is that he was simply too early. Now, it was 130 years plus too early, however he was a bit early. And why was he too early? Because in the event you take a look at the opposite gasoline sources, coal, that was positively one thing that you simply want to see centralized by way of the BTU and the conversion machine, once more, the steam turbine. Then you go into oil. You might get, as we’ve got heating oil on the properties. That’s truthful. But once more, the conversion machine was way more environment friendly on the centralized system.

And then nuclear. Pretty positive we’re not going to have nuclear energy crops in our yard anytime quickly. I do know some individuals could have some imaginative and prescient of that, however that’s not going to occur with fission. I believe we are able to all agree. And then you definitely get into gasoline. Gas is somewhat fascinating. Obviously, we’ve got the gasoline and a few of our mills run on pure gasoline, and so you will get that to the top level by a pipeline system. But once more, the conversion machine, the mixed cycle turbine, way more environment friendly on a big scale centralized foundation. Wind is certainly one thing it’s a must to do on a centralized foundation. Right?

Solar and batteries, let’s take that. No, these are inherently distributed applied sciences. And so, you take a look at the daylight, it falls most locations on earth, proper? Distributed. The expertise, the conversion machine of the photo voltaic module, it clearly is distributed. And the battery, all of us in all probability have one in our pocket proper now with the cellphone. That’s clearly distributed. So what that has carried out, and that is the place lots of people don’t perceive, is that for the primary time in historical past, we’ve got a decentralized BTU supply, the solar, and we’ve got a decentralized conversion expertise which is photo voltaic and batteries and now software program load administration, et cetera, et cetera.

So all which means in the event you had been to take a step again, that you simply had been going to have a elementary change within the centralized system. Now what we consider, going again to Michael’s telecom roots, is that the longer term will look one thing just like what we noticed with the appearance of telecommunications revolution within the Nineties and past, which is that the centralized system will nonetheless exist. It nonetheless serves among the massive buildings, like huge skyscrapers and so forth very nicely. And we in all probability is not going to see the top of that in our lifetime. But it’s not going to be a 100% of the system for everyone anymore. It’s going to be one thing fairly a bit lower than that.

What is that proportion? I don’t know. Nobody is aware of. 40%, 50%, 60%, 70, 10, who is aware of? But it’s positively going to be loads smaller. And subsequently, you’re going to see a drop within the centralized energy crops of all sorts, together with, over a time period, there’ll be increasingly more restricted demand for even issues like wind and photo voltaic farms, for example. And so whenever you’ve received the opposite facet, decentralized, that’s going to develop like loopy. And that’s precisely the sample that we’ve seen over the past 15 years and we predict that that sample will proceed to speed up by way of its progress. So that’s how we received right here.

Now, the opposite facet of that, the regulatory facet is, nicely, how did we find yourself with primarily a system of socialism and communism the place customers don’t have any alternative? And that was a deal that was carried out by a robber baron and made a deal and mentioned, “Hey look, let’s have as a social good to go to 1 wire to go to 1 residence” as a result of there was a number of wires being run, not not like what occurred within the cable business. And then whenever you take a look at the deal that they made, they mentioned, “Okay, we’ll allow you to try this as a result of we see electrical energy demand rising so far as the attention can see.” And for over a 100 years, they had been proper. It did.

And whenever you take a look at what’s modified lately, it’s that, “Wait a minute, I’ve received these decentralized gasoline and conversion applied sciences that I need in the home. My demand from the utility facet, as a result of I’ve them, as a result of I even have LEDs and different demand facet administration or expertise gadgets that scale back my demand, you’ll be able to now not, as a public utility commissioner or the CEO of a monopoly energy like a utility, predict and depend on load progress.” And so now the sport has modified, as a result of I’ve all these mounted prices and all the pieces is mounted as a utility, I’ve received curiosity prices, I’ve received gasoline prices, these can differ, however I’ve hedged them out. But I’ve additionally received a number of capital prices and I’ve received union contracts and I’ve received all this stuff that I’m piling on increasingly more prices as they transfer ahead in time, however I’m promoting much less and fewer and my progress price’s loads lower than I believed.

In the meantime, what occurred about 15 years in the past was we had a fracking revolution, which was centered right here in Houston. And what we determined to do or Wall Street determined to do was fry a trillion {dollars} within the oil and gasoline business as a result of they had been so excited in regards to the potential. Those days at the moment are gone. The Wall Street’s determined that they don’t like us frying that sort of cash anymore. They lastly stopped doing that, took them a very long time. But then the oil and gasoline business mentioned, “We’re bored with it as nicely. And so we’d really like that trillion again plus possibly two or three trillion extra as a result of we really need to make a return on our funding.”

And that’s completely cheap. And whenever you take a look at what’s occurring proper now, that’s precisely what’s occurring. So that profit that the utilities have gotten for the final 15 years is gone. In truth, in the event you return 25 years, 60%, 60% of utility charges had been made up of curiosity on the debt that all of them maintain quite a lot of, and gasoline price in the present day or a 12 months in the past is 30%. So the place do we predict it’s all going from right here with gasoline and rates of interest? Way up, proper? And that’s certainly what we’re seeing, and the utility charges are responding.

So the speed of value will increase has elevated and we proceed to see that that’s going to final for years to come back, and it’s all going to feed on itself. It drives increasingly more individuals desirous to go and get companies like Sunnova to succeed in out to options. And it additionally drives them to do what? They need decisions. Services modified, their life has modified, they’re working from residence, they received these new applied sciences like we’re speaking that depend upon electrical energy. And so their demand for reliability and at a greater deal has elevated dramatically and can proceed to extend to the purpose the place no centralized utility can present that stage of reliability.

And so the place we discover ourselves is individuals need a extra decentralized, extra dependable power supply, a less expensive power supply, they usually need to have the ability to select who offers them that service. And so now, we’ve got set ourselves up right into a scenario the place we’re at loggerheads with the prevailing system. We understand how we received right here, it labored for some time, however there isn’t a different business within the American financial system that’s so socialistic, so communistic within the kind with these co-ops. And there’s a cause for it. It doesn’t work. Long-term, it doesn’t work.

The undeniable fact that it labored this lengthy, we are able to all debate about that in numerous time intervals, the eighties and nineties, they clearly felt prefer it wasn’t working then. Again, we received to bail out due to the shale revolution. And it doesn’t matter what the purpose of the place you suppose it stopped working by way of the time is, there isn’t a debate at this cut-off date it’s not working for individuals. So it doesn’t matter what occurs, we’re going to see an enormous change within the system, and we’re going to have that very same as simply within the Nineties with the Telecommunications Act.

We’re going to wish to see some management out of the federal Congress and the state legislatures to point out customers that they’re listening to them and that they’re going to offer them alternative and that they’re going to offer them alternatives so expertise and innovation and progress and alternative can enter the facility business for the primary time in a very long time in American historical past and actually rework our lives for the higher.

Speaker 1:

Investor owned electrical monopolies have been the predominant enterprise mannequin for delivering electrical energy to most Americans for over a century. It is a enterprise mannequin that has performed an necessary function within the growth of our nation. But the promise of assured returns, the dearth of competitors in a tidal wave of latest applied sciences have all lastly caught up with this mannequin. And the rising threats of local weather change are making the fashions shortcomings much more obvious. These new applied sciences are disrupting the outdated monopolistic mannequin and are offering people and communities with higher freedom, extra decisions and extra financial flexibility on the subject of their very own power.

The epic battle happening between new applied sciences and freedom of alternative versus a century outdated enterprise mannequin are entrance and middle within the Sunnova micro utility proposal that the California Public Utility Commission should take into account. This is a narrative that may be unfolding in California in the present day however will quickly be one we see enjoying out all throughout America. For California, the story of how the utilities developed is lengthy and wealthy and, in its earliest days, was crammed with innovation and daring financing schemes. But over time, that legacy has didn’t sustain with evolving applied sciences, and the price and penalties are rising yearly.

This is a narrative price studying about, price studying about. And among the best sources for it is a nationwide bestselling guide from the reporter and Pulitzer finalist, Katherine Blunt referred to as California Burning: The Fall of Pacific Gas and Electric – and What It Means for America’s Electric Grid. We suggest you take into account studying Blunt’s work as a result of it is a story that may develop into more and more necessary to all of us within the very close to future. In the meantime, let’s get again to Bill, John and Michael to be taught much more about Sunnova’s work in California in the present day.

Bill Nussey:

So by your holy owned California subsidiary Sunnova Community Microgrids in California, you wish to be the primary photo voltaic and storage centered, you name it micro-utility in California. You wish to be licensed to personal and function power as a service which you name nano-grids behind the meter, and neighborhood property together with the distribution infrastructure which is in entrance of the meter as a part of an built-in microgrid neighborhood. So you’re calling this the Sunnova Adaptive Communities.

And in the present day, you simply can’t exit and make these. It’s such an apparent concept. So many individuals love this concept. Such an apparent concept. And you guys are mainly, “This is the shot heard around the world,” that is the, “We’re going to strive to do that and also you’re going to go up towards the established order.” So let’s begin with this query. Great imaginative and prescient. You’ve received in all probability no viewers extra excited than the Freeing Energy podcast viewers that desires to see you do that. This is your finest viewers ever.

But simply to stage set, why go do it by yourself? Why don’t you go do a CCA and among the different mechanisms that California has created for a few of this independence? Why don’t you’re employed with the utilities and simply allow them to take it over? Why do you guys wish to do it this manner?

Michael Grasso:

Yeah. So for Sunnova, that is about making a buyer expertise by our power as a companies providing that’s particular to the wants of a neighborhood. We are constructing the potential so that buyers are in charge of their power, and that that power that they obtain is extra resilient, more economical, so a cheaper price, and is clearly cleaner than they’d in any other case get in the event that they’re simply a part of utility personal infrastructure.

So why go about it on our personal? I imply, it’s actually about the truth that to ensure that the customers to get the answer that Sunnova is bringing to market, we have to be able to supply the total service answer. They want to have the ability to get entry to the Sunnova power expertise, which is Sunnova constructed, Sunnova managed, proper? It’s our technicians caring for it. It’s guaranteeing that the capabilities that we’re deploying are holistically provided.

And if you consider the way in which that the utilities go to market in the present day, if we had been to construct a neighborhood, for instance, and work with the utility, simply as we noticed occur in southern Florida with among the work that was occurring down there with among the applied sciences that they’ve partnered between the utility and different entities which have microgrid applied sciences, they price base it. Right? The utility is constructed on a price primarily based price of return as John identified. They are going to look to price base that which implies that the local people just isn’t essentially going to get the financial profit that you’d need them to get from them having a individually personalized and designed answer.

I believe you even have the truth that utility is holding to sure service stage agreements throughout all of their properties, and are they going to have the ability to regionally deal with a singular neighborhood in a approach that’s completely different and distinct from how they could need to deal with all of their community and services? And that’s all assuming that they’re going to make the identical stage of funding, have the identical stage of consideration that Sunnova could be offering.

We pleasure ourselves on the truth that we’re driving for the best resiliency of a uptime customary, if you’ll, for that power useful resource. And that the way in which that we’re bringing the opposite instruments and capabilities to market is in a approach that provides that shopper the arrogance that there’s going to be somebody there to predictively analyze their wants, that we’re going to make sure that the power provide is being generated, that the power goes to be delivered, that the load goes to be met, and that we’re going to general have a scenario the place the patron goes to be in management in a approach that will get to the outcomes that they’re in search of, which is economics that make sense to them, which can be aggressive to the native market, after which energy resiliency. It’s all about financial management and power safety for that shopper.

And we are able to’t try this particularly in a relationship with a 3rd occasion the place we’re not within the driver’s seat and in a position to ship on the commitments that we’re making an attempt to make.

Bill Nussey:

It’s an ideal imaginative and prescient. So paint an image for us, when this neighborhood exists, hopefully very quickly, what’s it going to seem like to the people who reside there? The nerd people who reside are like me they usually’re going to be poking round saying, “Hey, what are the tech specs on this place I’m shifting into?” My important different may be saying, “Well, what’s the sq. footage and is there room for the child?” I’m considering what number of kilowatt hours within the batteries and what’s the dimensions of the photo voltaic panels? But typically, if I reside on this neighborhood you’re excited about, what’s it going to seem like?

Michael Grasso:

Yeah. So to start with, we wish to work with a neighborhood utility. The concept is that we’re linked to the native utility however that we’re in charge of the purpose of connection. So usually occasions referred to as the purpose of widespread coupling. So there’s really a disconnect change, if you’ll, between what we construct and the place we join with the native utility. And I’ll come again to why that’s necessary. But contained in the neighborhood itself, Sunnova is requesting permission to construct its personal distribution infrastructure. So we wish to management the wires that go between the properties and between the power sources that we’ll present.

For every of the properties in the neighborhood, it could be a mix of companies, identical to we offer in the present day. So we’re already offering photo voltaic on the rooftop, battery storage on the wall, offering load management applied sciences, probably even a secondary supply of power, all behind the meter for every of the native residents. Then on the community facet, we’d be having some centralized sources. This can are available in a mix of several types of approaches. So this could possibly be parking constructions that go into widespread area. This could possibly be a floor mount neighborhood array. This could possibly be different sorts of ways in which we might deliver technology to the neighborhood. It would additionally embrace centralized storage in the neighborhood to go with what’s behind the meter on every of the premises.

And so working collectively, we’re creating this natural atmosphere that’s going to be scalable to the dimensions of the properties and the neighborhood’s wants. Each residence ought to generate a few 100% of the facility it wants on an annual foundation. On the entrance of the meter facet, we’d have a few of that backup energy that we would want for the neighborhood so we are able to function our personal community, excuse me, power web metering infrastructure between the entrance of the meter and the behind the meter. And then we are able to management all the completely different ways in which the power is managed throughout the whole thing of that neighborhood.

The cause we wish to be linked to the utility regionally is as a result of we wish to have the ability to provide the native utility with extra power when we’ve got an extra technology. And there are seemingly going to be occasions the place it could be extra environment friendly for us to attract a few of our power from the native utility versus producing it regionally or utilizing what we’ve got saved regionally. In our software for SCMC, what we mentioned was we anticipated 80% of the power that was required from that neighborhood to be generated inside it and 20% would come from the native utility. We can clearly scale that up. It simply requires extra land or extra expertise to deploy.

Bill Nussey:

You can keep linked to the grid on this imaginative and prescient. I believe it’s necessary. So clearly in the present day, you guys are placing in 1000’s of photo voltaic battery methods in California and everywhere in the nation. And so now, your huge proposal, the shot heard around the world, is you’re simply going to attach these up and put a centralized photo voltaic storage in another technology property probably. So it appears tremendous apparent that if you’ll be able to put it in somebody’s residence that it’s best to simply construct a wire the properties collectively.

So clarify why that is one thing that’s received the complete nation buzzing about this and why regular individuals which can be mates they usually’re all for clear power are having these divisive discussions and debates about what the heck is Sunnova doing? They can’t probably be constructing wires to attach homes. That’s simply anarchy. I imply, I’m being facetious, however individuals had been actually… The galvanizer in your proposal, what’s the large deal of simply going from my home to my neighborhood?

Michael Grasso:

I think it has one thing to do with monopolistic management, however I’ll let John begin off the response on that.

John Berger:

Well, it completely does. And what? A microgrid, that’s a time period that Michael walked the Sunnova Adaptive Community, and that’s what we predict a microgrid is. But in the event you ask 50 individuals, they’ll provide you with 50 completely different solutions. And the fascinating factor about it’s, then why, if it means one thing completely different to virtually everyone, not utterly, however you get the purpose, why the fascination with this? Why is everyone, to your level, now simply so excited up in arms in the event you’re against it, which is de facto the monopolies and their supporters. They’re in all probability being funded by the speed payers, by the way in which, by the utilities. That’s one other situation that I believe is a little bit of graft and corruption.

But whenever you take a look at what the microgrid means to individuals and actually push on it just a bit bit, it implies that they’ve alternative. That’s what the way in which I see it. If I wish to do one thing with my home, I get to do it. And in America, you are able to do all the pieces you need throughout the bounds in your home, however you can not select your energy supplier. Think about that. You can not try this in your individual home. If I wish to run a wire over to my neighbor, Michael and I had been residing subsequent door to one another, for example, and he had somewhat little bit of storage left over as a result of he purchased an additional battery. I can’t try this as a result of some monopolist, some bureaucrat tells me I can’t do it.

Well, if I wish to do it, why couldn’t I do it? It’s only a wire. He in all probability took the facility to run his Christmas lights he’s about to place up. So we’re simply buying and selling. You can’t try this. That’s loopy. And that’s why it fires individuals up. They’re like, “It’s my home. This is nuts. I’m going on to do what I wish to do. This is a free nation.” And it’s a free nation except you begin dealing within the energy business within the United States.

Bill Nussey:

You sound like somebody from Texas, I’ve to say that.

John Berger:

So what they’re in search of is free…

Bill Nussey:

But it’s not at all times what individuals from Texas and the electrical energy facet of Texas would agree with. So that seems like a distinctively Texan viewpoint. And it actually resonates. And persons are shocked to be taught that, in the event you and Michael wish to share Christmas gentle energy between your homes, it’s unlawful. And in order that’s what you guys try to vary. And so inform us somewhat bit in regards to the course of as a result of I believe that… We don’t have to get into the deep particulars, as a result of boy, I believe all of our brains would soften, however who has to approve this? What are you guys in the course of doing and the way do individuals debate it? If they wish to see this go ahead, who have they got to inform? What’s this course of?

Michael Grasso:

Right. So we filed an software with the California Public Utilities Commission to have the ability to kind our personal micro utility. That’s actually the mission and the imaginative and prescient of SCMC that we’ve been speaking about. And at this stage, we’re actually simply making an attempt to get a listening to to plead our case, to inform our story about why it’s that we predict our software needs to be heard.

Bill Nussey:

Wait a minute. What do you imply simply get a listening to? Can you clarify what which means?

Michael Grasso:

So with our software, we’re requesting permission to maneuver ahead to develop into our personal micro utility.

Bill Nussey:

Right.

Michael Grasso:

But what we’re seeing within the market is that the IOUs, so the investor owned utilities, and, consider it or not, the CPUC’s owned Public Advocates Office try to silence our software they usually’re making an attempt to get it dismissed as an alternative of permitting us to really go in entrance of the CPUC and be heard as an actual ongoing alternative.

Bill Nussey:

So I’m confused right here Michael. So the individuals which can be paid by the state of California to characterize the residents of California, the advocates, proper? So I might suppose that, on the very least, one thing that’s going to speak about alternative could be one thing they’d demand to listen to. And you’re saying in any other case. I simply wish to ensure that I’m listening to that proper as a result of it sounds somewhat loopy if I’m… Is this proper?

Michael Grasso:

That’s precisely proper. They’ve made a number of filings towards our software, a protest and a movement to dismiss the applying with none public listening to.

Bill Nussey:

Why?

Michael Grasso:

Exactly. We’d like to have that query answered for us additionally. Our software permits the patron to get a greater price. There’s no diminishment of their security. We present extra alternative, higher reliability, and a very significant development towards the state’s personal environmental objectives. Yet, the CPUC’s Public Advocates Office is making an attempt to [inaudible 00:36:46] us and forestall us from being heard, and we don’t know why.

Bill Nussey:

Well, I’ve carried out a little analysis into this. And one of many suggestions we get on our podcasts, lots of people take time to share, they mentioned we don’t ask laborious questions. So I’m going to ask you a tough query right here, Michael and John. So among the of us who don’t like this say that, nicely, in the event you guys and the house builders construct this actually cool neighborhood that, by the way in which, I might like to reside in. I occur to be very lucky and I’m rich sufficient to afford to reside in a pleasant residence like this. And in the event you guys find yourself taking up this method, then your prospects who reside on this neighborhood is not going to be contributing a reimbursement to the higher grid.

And so the grid nonetheless must be paid for the large one and the cash taken out from the income not paid will find yourself pushing the price of the grid on different households who usually are not a part of the tremendous cool neighborhood and it’s going to lift the charges and a few of these individuals aren’t in a position to pay. I write about this extensively within the guide, so anyone that desires to get my perspective, which I’m positive strains up with Michael and John’s, however why don’t you inform us the way you guys deal with that in order that we are able to hear your perspective on it?

Michael Grasso:

Yeah. So I believe it’s nonetheless a query as to what’s the dependency on the bigger macrogrid for this local people. If we’re working a 100% independently, after which on the similar time providing to supply power again to the centralized grid, which clearly we might do in areas which they usually have larger energy wants and decrease capability to serve, as a result of the brand new communities are going into areas which can be usually more durable to succeed in in California as land continues to get used up, we’re really doing a service to the grid.

And we welcome conversations to speak about business relationships again to the centralized grid and the way we are able to share energy and/or present extra capabilities that they may not be capable of present. But once more, it begins with us getting a seat on the desk, having a possibility to have a critical dialogue about our software and permitting us to have the ability to put in a business place the place we are able to characterize the wants of the neighborhood, the wants of builders, the wants of various different constituents.

And we’ve got lots of people which can be constructive on our software. We have various backers that will like to see this at the very least transfer ahead. And the one individuals which can be opposing us proper now, once more, are the IOUs, the labor unions who work for the IOUs, and the CPUC who’s being funded by, or the PAO who’s being funded by the CPUC to really help issues like this. So it’s actually complicated why we are able to’t get a seat on the desk. And we’re going to proceed to battle to get our voice heard and be capable of transfer ahead with this software.

John Berger:

A few different factors so as to add on what Michael simply mentioned, Bill. First, we’re very happy and count on to supply microgrids to low revenue communities. And no person ever mentioned that in some way we weren’t going to do this or one among our opponents wouldn’t try this. Why would they not? Particularly whenever you take a look at among the provisions they usually lately handed IRA legislation, proper? So that’s one. The second is, the rationale why utilities, and that is the place it will get a few issues blended in right here that shouldn’t actually be blended and they need to be pulled aside and checked out individually, which is, the utilities lengthen primarily credit score and promote energy to of us that they know they’ve a good suggestion, however they’re not going to pay them.

And by the way in which, low revenue and below-average credit, there may be some overlap, nevertheless it’s not one for one. There’s loads of individuals who make some huge cash that they’ll’t discover a solution to pay their payments. Most of our prospects are center revenue, center class, and there’s a number of prospects on the market that don’t make an entire lot of cash however pay their payments on time each single month. And so I simply wish to ensure that that’s understood. But whenever you take a look at the credit score wrap, and that’s what the utilities have in each state, together with Texas, it’s all socialized. Right?

The people who pay their payments, pay for the people who don’t pay their payments. Now, I’m not making some extent of whether or not that’s good or dangerous. It’s only a truth. It’s a truth. But what’s additionally a truth is that there’s not a top quality on either side of the meter. The entrance of the meter and the behind the meter must be equal. We ought to have a credit score wrap prolonged to us on the behind the meter and actually it’s prolonged to the purchasers to offer them a greater choice, higher companies.

And I believe that in the event you take a look at among the actions by the federal authorities by the IRA, among the IRA provisions and the infrastructure invoice provisions, you’re beginning to see a few of that begin to materialize. Individual states have carried out a few of this as nicely. And so in the event you might implement that on a big scale foundation, state by state, by way of offering that very same credit score reps, so equal therapy on each the entrance and the meter and behind the meter, then instantly the world appears loads completely different. And you see that folks aren’t discriminated towards as a result of they’ve poor credit score or don’t make some huge cash, and also you open up all the pieces.

And that’s what we’re making an attempt to do, is say, “Hey look, we’ll ensure that everyone is served as nicely. We’ll play by the identical guidelines as everyone else. We simply need individuals to have entry to those new applied sciences, these new companies the place they’ll get a greater power service at a greater value.” And if the knock on affect, that is what I’ll end with, is that the utilities, the monopolies lastly, as an alternative of spending cash to earn money… And that’s actual, it’s not hyperbole, it’s actual. That’s how the system works. The extra money they spend, the extra money they make.

If I had that system, Michael and I might be billionaires by the top of this podcast. Okay? We can try this. They could also be compelled to vary that mechanism and really drive the monopolies to determine methods to chop prices, which all of us are having to do proper now because the financial system just isn’t doing in addition to it might and it has over the past couple of years. Why can’t they determine minimize prices? And they’ve by no means needed to. In truth, once more, the extra money they spend, the extra money they make. So if that’s an affect the place they really really feel competitors to go on the market and discover extra environment friendly methods of…

Bill Nussey:

Gentlemen, I find it irresistible. I find it irresistible. I’m going to share, there’s so many patterns in historical past, and the battle that you simply guys are mounting towards the traditional knowledge that one of the simplest ways to serve prospects is thru monopolies and scale economies. I’ll learn you somewhat speech from May, 1976, the CEO of somewhat firm on the time referred to as AT&T, John deButts. He spoke to an viewers and he mentioned, and I’m studying from the quote, “Where the phone firms disadvantaged totally of the contribution of widespread prices that revenues from their discretionary companies present, they’d face the need of accelerating the common residents invoice for primary service as a lot as 75%.”

And what that mainly means is that, the AT&T as a monopoly was arguing that in the event you permit competitors on our community, it’s going to lift everyone’s prices. And that is an argument from virtually 50 years in the past. And what ended up occurring is that, on this case, the US authorities determined possibly they’re exaggerating, possibly it isn’t that dangerous. And so that they mentioned AT&T, “No, you’re not going to get to have this absolute monopoly anymore.” And what ended up occurring? Well, there’s virtually no argument, the web was created as results of AT&T now not proudly owning the monopoly of cell phones. The iPhone, proper?

The entirety of Silicon Valley largely emerged as a result of the US authorities mentioned that monopolies are actually helpful in some methods, however simply the sweeping, this one firm will get complete management, possibly not so nice. And so there’s echoes of historical past right here. And I’m hoping that you simply’re submitting with the CPUC, and I’m hoping you’ve gotten an opportunity to have a public dialog about it the place you’ll be able to put your viewpoint within the 1000’s of advocates that wish to see you. And we’ll be there within the viewers holding our lighters up for you guys to get this listening to and to have the ability to construct this neighborhood. Yes.

I believe that that is completely unequivocally the way forward for the grid. It’s a query of how lengthy can it’s delayed and delay. But there isn’t a query that you’re promising, and I consider you, 100% higher service, cleaner for the atmosphere, fairer to all of the people, and extra dependable in a world that’s more and more unreliable. So I’m actually excited and we’re cheering for you guys and we’re going to comply with you and share your journey with our readers and listeners as you go battle this.

And if there’s something we are able to do, please tell us. And in truth, proper now, whereas I’ve you, as a result of we’re going to wrap up in only a minute, however whereas I’ve you, what’s it that folks might do to assist? Because you’ve received an viewers right here that’s actually enthusiastic about this. What can individuals do to assist your trigger that can assist you ship this service to prospects of California and the entire nation? What can they do?

Michael Grasso:

From my standpoint, it begins with them turning into extra of an advocate for distributed power. If you don’t have, or haven’t seemed into photo voltaic and power storage in your residence, you could get off the sofa and do it. If you haven’t carried out it for what you are promoting, it’s best to give us a name. We may also help you with that. So I believe it begins with doing what’s necessary in your yard.

And then I believe second, you could make your voice heard. So discuss to your native politicians, discuss to your representatives, discuss to these in your political sphere of affect and allow them to know that you really want a greater answer, that it’s necessary if not for in the present day, then for tomorrow, that you simply get entry to cleaner renewable sources, that these are distributed evenly throughout the native utility. And that ought to come from firms like Sunnova, working with the utility, and that these companies want to lift the bar as a result of we’ve got extra power demand coming at us quicker than we are able to think about with electrical autos and different power consuming gadgets.

And we don’t have the availability to fulfill it. And it’s going to proceed to ramp up and affect our day-to-day lives and our capability as Americans to do the issues that we wish and have to do, in addition to the getting older grid goes to get extra frail over time. It’s already extraordinarily frail, nevertheless it’s going to worsen. And the mixture of these two issues means you’re not going to have power and also you’re not going to have power safety. And that’s not good for anyone. So step up and make your voices heard.

Bill Nussey:

To everybody listening in, these are the individuals, their colleagues, their supporters are those which can be pushing for the vanguard of the way forward for power. It’s laborious to think about that that is even a battle, however it’s. And John and Michael and their groups and all their supporters are placing up an ideal battle to make what appears to be an apparent answer, clearly out there. And so I hope you’ll take their recommendation and chime in, let your voice be heard, find out about this. If you reside in California, it is a nice time to go write some letters. And we’re cheering for you guys. And tell us how we may also help additional.

So as we wrap up, Michael, we’ve already put John Berger by this. So we’re going to simply put you thru the lightning spherical questions, which is identical 4 questions we’ve requested, I believe, virtually a 100 of our friends, which simply tells us about the way you’re wired and offers our listeners an instance of how the leaders, the change makers on this area are wired. So the primary query for you is, what excites you most about being within the clear power enterprise?

Michael Grasso:

I believe that clear power is the one enterprise on this planet, particularly with photo voltaic and distributed sources that Sunnova provides, offers an answer that’s each good for the client, good for the investor, and good for the planet. I can’t discover a higher business to characterize the place everyone wins on this business.

Bill Nussey:

If you may wave a magic wand and alter only one factor, what would it not be?

Michael Grasso:

That all customers, residential and business, throughout this nation get off their couches and request a photo voltaic quote.

Bill Nussey:

Excellent. All proper. [inaudible 00:48:59]. Sorry.

Michael Grasso:

From Sunnova.

John Berger:

He mentioned from Sunnova could be excellent.

Bill Nussey:

Yes. Right.

Michael Grasso:

I believe that was a reasonably, [inaudible 00:49:05].

Bill Nussey:

You’re a advertising officer.

Michael Grasso:

I wish to get the ball rolling right here. It’s going to movement to us, I do know. But I simply have to get individuals shifting as a result of they’re apathetic about power and that’s the problem we’ve got on this nation is, too many individuals are too apathetic about power.

Bill Nussey:

I find it irresistible.

Michael Grasso:

And that’s why the class’s not rising as quick accurately. I imply, we’re [inaudible 00:49:23].

Bill Nussey:

The excellent news, that was not even a remotely thinly veiled pitch, John. So I’m fairly positive everybody’s going to know who they’re purported to name. All proper. So leaping on…

Michael Grasso:

Www.sunnova.com. [inaudible 00:49:36].

Bill Nussey:

I find it irresistible.

Michael Grasso:

Call us in the present day.

Bill Nussey:

I find it irresistible. All proper. What do you suppose would be the single most necessary change in how we generate, retailer and distribute electrical energy within the subsequent 5 years?

Michael Grasso:

This doesn’t go towards technology, however indubitably, it’s going to be the electrical automobile. It’s going to vary the way in which that we take into consideration power on this nation, and it’s going to level out and expose all the failings within the centralized monopoly distribution community. And customers are going to be instructed they don’t have power or can’t get entry to power once they want it. And as an American, we don’t wish to hear that. So I believe EVs are going to actually level out the truth that we want a greater distributed grid.

Bill Nussey:

And the ultimate query as we wrap up this unbelievable dialogue in the present day. I’m positive you each get requested from mates, household, neighbors, individuals that you simply mentor, what can individuals do as people who aren’t essentially within the business such as you guys are every single day? What can they do to make a distinction? And you’ll have already answered it, however be happy to say it yet another time in the event you like.

Michael Grasso:

If you’re not supporting the answer, you’re supporting the issue. So step up, make your voice heard, get on the bandwagon with distributed power. It’s cleaner. Let’s depart a greater legacy for our kids, our grandchildren, for generations to come back. Let’s put this nation able the place we are able to proceed to innovate, the place we proceed to be a worldwide chief. The approach that we’re going to do this is being on the forefront of getting clear, renewable power and having sufficient power to produce all of our wants. And one of the simplest ways to do this in the present day is supporting photo voltaic.

Bill Nussey:

I find it irresistible. I find it irresistible. And one of many issues that we ask our friends, we didn’t need to ask you guys, you’re professionals, however say, don’t pitch your organization. But darn it, I’m going to pitch your organization. So if you wish to try this, go to www.sunnova.com and see what these advantageous of us can do for you. We usually are not paid by you guys. We’re simply huge followers. And I believe that your imaginative and prescient is one which I hope everybody takes to coronary heart. So John Berger, Michael Grasso, thanks for spending your extremely treasured time with us in the present day and we want you great success and God velocity along with your imaginative and prescient for altering the way forward for power.



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