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

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One of many world’s largest installers of photo voltaic + storage power programs 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 Fee, however naysayers try to squelch the dialog.  Be a part of host Invoice 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 shoppers; and what critics are saying and doing to sideline the hassle.

Listed below are a couple of 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 selection and higher reliability… [we offer] a very significant development towards the state’s personal environmental objectives. But 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.”


“…. However while you have a look at what a microgrid means to individuals and push on it just a bit bit, it actually signifies that they’ve selection.”


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


“……:now we have virtually 40,000 prospects, On Puerto Rico, over 30,000, which have battery storage alongside their photo voltaic programs. And if you happen to have a look at what occurred within the 10 days behind the hurricane, solely 59 of our programs, our storage programs 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

Invoice Nussey:

Welcome all people to the newest episode of the Releasing Power podcast. I’m Invoice Nussey, the host and the co-founder of the podcast. Actually excited to dive in at present on, I feel, probably the most 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. Tremendous thrilling although. However as all the time, I wish to begin out by thanking everybody who’s investing a couple of minutes of their extremely busy schedules to pay attention in and study and be a part of what we name the native power revolution.

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

And most of you recognize who they’re, however if you happen to’re not accustomed to Sunnova, they’re one of many main photo voltaic installers on the earth, definitely in the USA. They’ve pioneered numerous improvements. They’re working in a number of the most essential elements of the nation, the California, which we’re going to speak about at present. For these of you who’ve learn the e-book, I talked about Sunnova’s groundbreaking work in Puerto Rico, placing photo voltaic plus battery all through that island sooner than simply about anyone.

And they’re as much as one thing so huge and so new. A whole lot of you already know what it’s. However earlier than we soar into this unimaginable story that they’re serving to inform for this business, I wish to take a couple of minutes simply to start out off with a little bit background on Michael, as a result of most of you keep in mind if you happen to’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 only decide on Michael at present.

And needed 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 feel your mother and father are in all probability anticipating you to be the CEO of AT&T. The place did you go unsuitable 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 excellent query. I completely loved my time in telecommunications about 15 years working throughout the nation with loads of manufacturers that finally turned the AT&T model on the finish of the day, constructing nice providers throughout that business. However what introduced me into power is the concept that every thing that we do in our society is predicated on power. You possibly can have the most effective cellular phone on the earth, however if you happen to don’t have the power to energy, it doesn’t do you a lot good.

On the finish of the day, I feel what’s actually driving our economic system and driving our progress as a inhabitants and constructing on our means to be people and ship nice innovation is power. It’s actually the core. And the concept that we will be part of that and particularly within the clear and distributed house, be supplying power and power safety to shoppers is a motivator that helps me get away from bed daily and drive me by means of every thing that I do.

Invoice Nussey:

I feel everybody who listens into this feels the identical manner. And we’re all extremely glad that you just made the swap as so many individuals who pay attention into our podcast are doing as effectively. So earlier than we get into at present’s sizzling subject, let’s do some catch up. So John, you had been on the podcast a couple of years in the past and also you talked a little bit bit concerning the imaginative and prescient that you just had been casting for Sunnova. And also you guys are based mostly in Houston, which is, you talked a little bit 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 USA turned considerably notorious for its grid struggling a winter in the past. And we had been all pondering of you and Sunnova and your entire 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:

Properly, it’s not simply Texas but it surely’s different areas of the nation as effectively that basically been seeing a decline in reliability within the centralized system. Most individuals name {that a} grid or the grid. There is no such thing as a grid that goes throughout your entire nation. It’s a set of regionalized grid programs. And while you have a look at Texas, it personifies that regionalization, let’s consider, of the grid. We’re, for probably the most a part of the state, considerably remoted deliberately from the opposite larger programs, if you’ll, from the japanese and western interconnects. And that additionally obtained loads of notoriety, let’s consider, in that storm.

On the finish of the day although, it actually wouldn’t have made that a lot distinction as a result of there was loads of stressing that was on the japanese aspect by way of the japanese interconnect. And they also had been present process their very own stresses.

The Texas state of affairs fairly merely is that Texas has been rising sooner than most different areas of the nation for variety of years, continues to take action. And actually we had put a market based mostly system in place, not not like in California as an illustration, the place on the wholesale aspect of issues, you had impartial mills that may are available in, provide energy, receives a commission for it and so forth. However there was not likely a mechanism to cost reliability. The truth is, reliability within the centralized system for over a century has basically been mandated as what we name a reserve margin of 15%.

And even that, on a system-wide foundation, that may very well be wonderful if you happen to observe it. Texas was beneath it, that 15%. However while you begin moving into people, whether or not they’re companies or properties, that doesn’t do you a complete lot of excellent. They are saying, “Properly, the system was wonderful, however the energy line to your home failed for no matter motive.” 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.

After which once we obtained into the Winter Storm Uri, lastly there’s know-how that’s clear and is supplied 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 effectively will be part of the answer, and software program that may optimize these properties to basically have their very own energy and have the ability to function off the grid, so to talk. In order that was one thing that, by way of the demand for that means to function off the Texas system or the ERCOT as we name it, clearly if you happen to had a service from Sunnova otherwise you had one thing from considered one of our rivals, you had been in nice form. And if you happen to didn’t, you weren’t. And it was just about that straightforward.

So all people 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, although it’s been effectively over a yr since that occasion.

Invoice Nussey:

Properly you guys had this imaginative and prescient years and years in the past. And once I was writing the e-book and studying about the place this mattered probably the most, I went right down to Puerto Rico and delighted to see that Sunnova was the most important supplier of photo voltaic and battery programs, definitely considered one of, in Puerto Rico, the most important.

John Berger:

By far.

Invoice Nussey:

By far. There you go. So that you guys are pioneering this concept and placing hundreds and hundreds of those programs in place when everybody else was nonetheless questioning how essential 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 study from that? Did it work? Did the imaginative and prescient come true?

Michael Grasso:

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

Invoice Nussey:

40,000. Wow.

Michael Grasso:

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

Invoice Nussey:

Unbelievable.

Michael Grasso:

So over 30,000 programs carried out incredible 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 programs for as much as 10 days or extra. It simply tells you about each the resiliency that we’re capable of present by means of Sunnova, and likewise the frailty of the grid that’s working on the island, and why it’s so crucial that we give you a greater resolution for these shoppers as a result of they didn’t have entry to grid provide. And the shoppers that had been depending on the centralized grid discovered themselves in a state of affairs the place they didn’t have energy and that energy outage prolonged for such a big time period.

Invoice Nussey:

It’s a sport changer. And what’s so cool about our primary dialog at present is you guys are taking this, what appears to many to be a visionary, to all of us appears type 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. However earlier than we do, let’s lay the groundwork on this. Why change within the grid is difficult, notably within the state of California the place we’re going to focus in a second.

You’ve obtained an unimaginable rat’s nest of rules and regulators and legal guidelines. Rat’s nest isn’t a good phrase. Really, when it really works and it has labored for many years, it’s efficient. However while you wish to drive change and also you wish to enhance issues, you don’t wish to take the stuff you’ve discovered in Texas and Puerto Rico and also you wish to take it to the following logical step, it may grow to be an encumbrance. So give us a fast schooling on what an innovator in native power is going through relating to rules and jurisdictions and legislations, notably in California.

John Berger:

So yeah, I feel it’d be nice, Invoice, to return and simply have a fast historical past of how did we get right here with our system and the best way that we’ve arrange. And if you happen to return effectively 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, basically, you may have power sources or BTU and then you definately’ve obtained conversion gadgets that takes that BTU and makes it an electrical energy, as expressed in megawatt hour, kilowatt hour, no matter.

For those who 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 definately 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 obtained into the entire struggle on AC versus DC that we, I feel, all know of. We all know clearly who received that struggle. It wasn’t Edison.

And the explanation I supply 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? As a result of if you happen to have a look at the opposite gas sources, coal, that was positively one thing that you just want to see centralized by way of the BTU and the conversion machine, once more, the steam turbine. Then you definitely go into oil. You can get, as now we have heating oil on the properties. That’s honest. However once more, the conversion machine was way more environment friendly on the centralized system.

After which nuclear. Fairly certain we’re not going to have nuclear energy vegetation 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 feel we are able to all agree. And then you definately get into gasoline. Fuel is a little bit fascinating. Clearly, now we have the gas and a few of our mills run on pure gasoline, and so you will get that to the top level by means of a pipeline system. However once more, the conversion machine, the mixed cycle turbine, way more environment friendly on a big scale centralized foundation. Wind is certainly one thing you must do on a centralized foundation. Proper?

Photo voltaic and batteries, let’s take that. No, these are inherently distributed applied sciences. And so, you have a look at the daylight, it falls most locations on earth, proper? Distributed. The know-how, 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 cellular phone. That’s clearly distributed. So what that has finished, and that is the place lots of people don’t perceive, is that for the primary time in historical past, now we have a decentralized BTU supply, the solar, and now we have a decentralized conversion know-how which is photo voltaic and batteries and now software program load administration, et cetera, et cetera.

So all meaning if you happen to had been to take a step again, that you just had been going to have a elementary change within the centralized system. Now what we imagine, going again to Michael’s telecom roots, is that the long run will look one thing much like what we noticed with the arrival of telecommunications revolution within the Nineties and past, which is that the centralized system will nonetheless exist. It nonetheless serves a number of the massive buildings, like huge skyscrapers and so forth very effectively. And we in all probability is not going to see the top of that in our lifetime. However 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’s that share? I don’t know. No person is aware of. 40%, 50%, 60%, 70, 10, who is aware of? However it’s positively going to be lots smaller. And due to this fact, you’re going to see a drop within the centralized energy vegetation of every type, together with, over a time period, there’ll be an increasing number of restricted demand for even issues like wind and photo voltaic farms, as an illustration. And so while you’ve obtained the opposite aspect, decentralized, that’s going to develop like loopy. And that’s precisely the sample that we’ve seen during the last 15 years and we expect that that sample will proceed to speed up by way of its progress. In order that’s how we obtained right here.

Now, the opposite aspect of that, the regulatory aspect is, effectively, how did we find yourself with basically a system of socialism and communism the place shoppers don’t have any selection? And that was a deal that was finished by a robber baron and made a deal and stated, “Hey look, let’s have as a social good to go to at least one wire to go to at least one residence” as a result of there was a number of wires being run, not not like what occurred within the cable business. After which while you have a look at the deal that they made, they stated, “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 while you have a look at what’s modified not too long ago, it’s that, “Wait a minute, I’ve obtained these decentralized gas and conversion applied sciences that I need in the home. My demand from the utility aspect, as a result of I’ve them, as a result of I even have LEDs and different demand aspect administration or know-how gadgets that cut back my demand, you may not, as a public utility commissioner or the CEO of a monopoly energy like a utility, predict and rely on load progress.” And so now the sport has modified, as a result of I’ve all these fastened prices and every thing is fastened as a utility, I’ve obtained curiosity prices, I’ve obtained gas prices, these can fluctuate, however I’ve hedged them out. However I’ve additionally obtained loads of capital prices and I’ve obtained union contracts and I’ve obtained all this stuff that I’m piling on an increasing number of prices as they transfer ahead in time, however I’m promoting much less and fewer and my progress price’s lots lower than I assumed.

Within 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 Avenue determined to do was fry a trillion {dollars} within the oil and gasoline business as a result of they had been so excited concerning the potential. These days at the moment are gone. The Wall Avenue’s determined that they don’t like us frying that type of cash anymore. They lastly stopped doing that, took them a very long time. However then the oil and gasoline business stated, “We’re bored with it as effectively. And so we’d really like that trillion again plus possibly two or three trillion extra as a result of we really must make a return on our funding.”

And that’s completely affordable. And while you have a look at what’s taking place proper now, that’s precisely what’s taking place. In order that profit that the utilities have gotten for the final 15 years is gone. The truth is, if you happen to return 25 years, 60%, 60% of utility charges had been made up of curiosity on the debt that all of them maintain an excessive amount of, and gas value at present or a yr in the past is 30%. So the place do we expect it’s all going from right here with gas and rates of interest? Approach up, proper? And that’s certainly what we’re seeing, and the utility charges are responding.

So the speed of worth 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 an increasing number of individuals eager to go and get providers like Sunnova to achieve out to options. And it additionally drives them to do what? They need selections. Companies modified, their life has modified, they’re working from residence, they obtained these new applied sciences like we’re speaking that rely on 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 desire a extra decentralized, extra dependable power supply, a less expensive power supply, they usually need to have the ability to select who gives them that service. And so now, now we have set ourselves up right into a state of affairs the place we’re at loggerheads with the present system. We all know how we obtained right here, it labored for some time, however there isn’t a different business within the American economic system that’s so socialistic, so communistic within the kind with these co-ops. And there’s a motive for it. It doesn’t work. Lengthy-term, it doesn’t work.

The truth that it labored this lengthy, we are able to all debate about that in several time intervals, the eighties and nineties, they clearly felt prefer it wasn’t working then. Once more, we obtained to bail out due to the shale revolution. And it doesn’t matter what the purpose of the place you assume it stopped working by way of the time is, there isn’t a debate at this time limit 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 want to see some management out of the federal Congress and the state legislatures to indicate shoppers that they’re listening to them and that they’re going to provide them selection and that they’re going to provide them alternatives so know-how and innovation and progress and alternative can enter the ability business for the primary time in a very long time in American historical past and actually remodel our lives for the higher.

Speaker 1:

Investor owned electrical monopolies have been the predominant enterprise mannequin for delivering electrical energy to most Individuals for over a century. It’s a enterprise mannequin that has performed an essential function within the improvement of our nation. However 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 previous monopolistic mannequin and are offering people and communities with higher freedom, extra selections and extra financial flexibility relating to their very own power.

The epic battle happening between new applied sciences and freedom of selection versus a century previous enterprise mannequin are entrance and middle within the Sunnova micro utility proposal that the California Public Utility Fee should think about. This can be a story that is perhaps unfolding in California at present however will quickly be one we see enjoying out all throughout America. For California, the story of how the utilities advanced is lengthy and wealthy and, in its earliest days, was full of innovation and daring financing schemes. However over time, that legacy has didn’t sustain with evolving applied sciences, and the price and penalties are rising yearly.

This can be a story value studying about, value studying about. And among the best assets for this can be a nationwide bestselling e-book from the reporter and Pulitzer finalist, Katherine Blunt known as California Burning: The Fall of Pacific Fuel and Electrical – and What It Means for America’s Electrical Grid. We advocate you think about studying Blunt’s work as a result of this can be a story that may grow to be more and more essential to all of us within the very close to future. Within the meantime, let’s get again to Invoice, John and Michael to study much more about Sunnova’s work in California at present.

Invoice Nussey:

So by means of your holy owned California subsidiary Sunnova Neighborhood Microgrids in California, you wish to be the primary photo voltaic and storage targeted, 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 group property together with the distribution infrastructure which is in entrance of the meter as a part of an built-in microgrid group. So that you’re calling this the Sunnova Adaptive Communities.

And at present, 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 also you guys are mainly, “That 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 in opposition to the established order.” So let’s begin with this query. Nice imaginative and prescient. You’ve obtained in all probability no viewers extra excited than the Releasing Power podcast viewers that wishes to see you do that. That is your finest viewers ever.

However simply to stage set, why go do it by yourself? Why don’t you go do a CCA and a number of 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 means of our power as a providers providing that’s particular to the wants of a group. We’re constructing the potential so that customers are in charge of their power, and that that power that they obtain is extra resilient, more economical, so a lower cost, 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 shoppers to get the answer that Sunnova is bringing to market, we must be able to offer the complete service resolution. 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 taking good care of it. It’s making certain that the capabilities that we’re deploying are holistically provided.

And if you consider the best way that the utilities go to market at present, if we had been to construct a group, for instance, and work with the utility, simply as we noticed occur in southern Florida with a number of the work that was occurring down there with a number of the applied sciences that they’ve partnered between the utility and different entities which have microgrid applied sciences, they price base it. Proper? The utility is constructed on a price based mostly price of return as John identified. They’ll look to price base that which signifies that the area people isn’t essentially going to get the financial profit that you’d need them to get from them having a individually custom-made and designed resolution.

I feel 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 domestically deal with a singular group in a manner that’s completely different and distinct from how they may must 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 can be offering.

We delight 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 best way that we’re bringing the opposite instruments and capabilities to market is in a manner that provides that client 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 total have a state of affairs the place the patron goes to be in management in a manner that will get to the outcomes that they’re searching for, 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 client.

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 capable of ship on the commitments that we’re making an attempt to make.

Invoice Nussey:

It’s an excellent imaginative and prescient. So paint an image for us, when this neighborhood exists, hopefully very quickly, what’s it going to appear 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 vital different is perhaps saying, “Properly, what’s the sq. footage and is there room for the infant?” I’m pondering what number of kilowatt hours within the batteries and what’s the scale of the photo voltaic panels? However typically, if I reside on this group you’re fascinated about, what’s it going to appear like?

Michael Grasso:

Yeah. So to begin with, we wish to work with a neighborhood utility. The concept is that we’re related to the native utility however that we’re in charge of the purpose of connection. So typically instances known as the purpose of frequent coupling. So there’s really a disconnect swap, 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 essential. However contained in the group 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 will be a mix of providers, identical to we offer at present. So we’re already offering photo voltaic on the rooftop, battery storage on the wall, offering load management applied sciences, doubtlessly even a secondary supply of power, all behind the meter for every of the native residents. Then on the community aspect, we might be having some centralized assets. This will are available in a mix of several types of approaches. So this may very well be parking buildings that go into frequent house. This may very well be a floor mount group array. This may very well be different kinds of ways in which we might deliver technology to the group. It might additionally embody 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 setting that’s going to be scalable to the scale of the properties and the group’s wants. Every residence ought to generate a couple of 100% of the ability it wants on an annual foundation. On the entrance of the meter aspect, we’d have a few of that backup energy that we would want for the group 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. After which we are able to management all the completely different ways in which the power is managed throughout the whole thing of that group.

The explanation we wish to be related to the utility domestically is as a result of we would like to have the ability to provide the native utility with extra power when now we have an extra technology. And there are probably going to be instances the place it will be extra environment friendly for us to attract a few of our power from the native utility versus producing it domestically or utilizing what now we have saved domestically. In our software for SCMC, what we stated was we anticipated 80% of the power that was required from that group to be generated inside it and 20% would come from the native utility. We will clearly scale that up. It simply requires extra land or extra know-how to deploy.

Invoice Nussey:

You possibly can keep related to the grid on this imaginative and prescient. I feel it’s essential. So clearly at present, you guys are placing in hundreds of photo voltaic battery programs in California and all around 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 doubtlessly. 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 obtained your entire nation buzzing about this and why regular individuals which can be pals they usually’re all for clear power are having these divisive discussions and debates about what the heck is Sunnova doing? They’ll’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 massive deal of simply going from my home to my neighborhood?

Michael Grasso:

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

John Berger:

Properly, it completely does. And you recognize what? A microgrid, that’s a time period that Michael walked the Sunnova Adaptive Neighborhood, and that’s what we expect a microgrid is. However if you happen to 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 all people, not fully, however you get the purpose, why the fascination with this? Why is all people, to your level, now simply so excited up in arms if you happen to’re against it, which is basically the monopolies and their supporters. They’re in all probability being funded by the speed payers, by the best way, by means of the utilities. That’s one other difficulty that I feel is a little bit of graft and corruption.

However while you have a look at what the microgrid means to individuals and actually push on it just a bit bit, it signifies that they’ve selection. That’s what the best way 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 every thing you need inside the bounds in your home, however you can not select your energy supplier. Take into consideration that. You can not try this in your personal home. If I wish to run a wire over to my neighbor, Michael and I had been residing subsequent door to one another, as an illustration, and he had a little bit 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.

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

Invoice Nussey:

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

John Berger:

So what they’re searching for is free…

Invoice Nussey:

However it’s not all the time what individuals from Texas and the electrical energy aspect of Texas would agree with. In order that feels like a distinctively Texan perspective. And it definitely resonates. And individuals are shocked to study that, if you happen to and Michael wish to share Christmas mild energy between your homes, it’s unlawful. And in order that’s what you guys try to vary. And so inform us a little bit bit concerning the course of as a result of I feel that… We don’t must get into the deep particulars, as a result of boy, I feel 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? In the event that they wish to see this go ahead, who have they got to inform? What’s this course of?

Michael Grasso:

Proper. So we filed an software with the California Public Utilities Fee 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 expect our software ought to be heard.

Invoice Nussey:

Wait a minute. What do you imply simply get a listening to? Are you able to clarify what meaning?

Michael Grasso:

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

Invoice Nussey:

Proper.

Michael Grasso:

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

Invoice Nussey:

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

Michael Grasso:

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

Invoice Nussey:

Why?

Michael Grasso:

Precisely. 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 offer extra selection, higher reliability, and a very significant development towards the state’s personal environmental objectives. But, the CPUC’s Public Advocates Workplace is making an attempt to [inaudible 00:36:46] us and forestall us from being heard, and we don’t know why.

Invoice Nussey:

Properly, I’ve finished a little analysis into this. And one of many suggestions we get on our podcasts, lots of people take time to share, they stated we don’t ask arduous questions. So I’m going to ask you a tough query right here, Michael and John. So a number of the of us who don’t like this say that, effectively, if you happen to guys and the house builders construct this actually cool neighborhood that, by the best way, I’d 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 if you happen to guys find yourself taking on 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 massive 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 capable of pay. I write about this extensively within the e-book, so anyone that wishes to get my perspective, which I’m certain traces 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 feel it’s nonetheless a query as to what’s the dependency on the bigger macrogrid for this area people. If we’re working a 100% independently, after which on the identical time providing to offer power again to the centralized grid, which clearly we might do in areas which they usually have greater energy wants and decrease means to serve, as a result of the brand new communities are going into areas which can be usually more durable to achieve 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 won’t have the ability to present. However once more, it begins with us getting a seat on the desk, having a chance to have a severe dialogue about our software and permitting us to have the ability to put in a business place the place we are able to symbolize the wants of the group, the wants of builders, the wants of plenty of different constituents.

And now we have lots of people which can be constructive on our software. We’ve plenty of backers that may like to see this a minimum of 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 struggle to get our voice heard and have the ability to transfer ahead with this software.

John Berger:

A few different factors so as to add on what Michael simply stated, Invoice. First, we’re more than pleased and count on to offer microgrids to low earnings communities. And no one ever stated that one way or the other we weren’t going to try this or considered one of our rivals wouldn’t try this. Why would they not? Significantly while you have a look at a number of the provisions they usually not too long ago handed IRA regulation, proper? In order that’s one. The second is, the explanation why utilities, and that is the place it will get a few issues combined in right here that shouldn’t actually be combined and they need to be pulled aside and checked out individually, which is, the utilities lengthen basically 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 best way, low earnings and horrible credit, there may be some overlap, but it surely’s not one for one. There’s loads of individuals who make some huge cash that they’ll’t discover a option to pay their payments. Most of our prospects are center earnings, center class, and there’s loads of prospects on the market that don’t make a complete lot of cash however pay their payments on time each single month. And so I simply wish to guarantee that that’s understood. However while you have a look at the credit score wrap, and that’s what the utilities have in each state, together with Texas, it’s all socialized. Proper?

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. However 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 should be equal. We should always have a credit score wrap prolonged to us on the behind the meter and actually it’s prolonged to the shoppers to provide them a greater possibility, higher providers.

And I feel that if you happen to have a look at a number of the actions by the federal authorities by means of the IRA, a number of the IRA provisions and the infrastructure invoice provisions, you’re beginning to see a few of that begin to materialize. Particular person states have finished a few of this as effectively. And so if you happen to might implement that on a big scale foundation, state by state, by way of offering that very same credit score reps, so equal remedy on each the entrance and the meter and behind the meter, then immediately the world seems to be lots completely different. And also you see that folks aren’t discriminated in opposition to as a result of they’ve poor credit score or don’t make some huge cash, and also you open up every thing.

And that’s what we’re making an attempt to do, is say, “Hey look, we’ll guarantee that all people is served as effectively. We’ll play by the identical guidelines as all people else. We simply need individuals to have entry to those new applied sciences, these new providers the place they’ll get a greater power service at a greater worth.” And if the knock on impression, that is what I’ll end with, is that the utilities, the monopolies lastly, as a substitute of spending cash to become profitable… And that’s actual, it’s not hyperbole, it’s actual. That’s how the system works. The more cash they spend, the more cash they make.

If I had that system, Michael and I’d be billionaires by the top of this podcast. Okay? We will try this. They could 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 economic system isn’t doing in addition to it might and it has during the last couple of years. Why can’t they determine how you can reduce prices? They usually’ve by no means needed to. The truth is, once more, the more cash they spend, the more cash they make. So if that’s an impression the place they really really feel competitors to go on the market and discover extra environment friendly methods of…

Invoice Nussey:

Gents, I adore it. I adore it. I’m going to share, there’s so many patterns in historical past, and the battle that you just guys are mounting in opposition to the traditional knowledge that the easiest way to serve prospects is thru monopolies and scale economies. I’ll learn you a little bit speech from Could, 1976, the CEO of a little bit firm on the time known as AT&T, John deButts. He spoke to an viewers and he stated, and I’m studying from the quote, “The place the phone corporations disadvantaged solely of the contribution of frequent prices that revenues from their discretionary providers 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 if you happen to permit competitors on our community, it’s going to lift all people’s prices. And that is an argument from virtually 50 years in the past. And what ended up taking place is that, on this case, the US authorities determined possibly they’re exaggerating, possibly it isn’t that dangerous. And they also stated AT&T, “No, you’re not going to get to have this absolute monopoly anymore.” And what ended up taking place? Properly, there’s virtually no argument, the web was created as results of AT&T not proudly owning the monopoly of cell phones. The iPhone, proper?

The whole thing of Silicon Valley largely emerged as a result of the US authorities stated that monopolies are actually useful in some methods, however simply the sweeping, this one firm will get whole management, possibly not so nice. And so there’s echoes of historical past right here. And I’m hoping that you just’re submitting with the CPUC, and I’m hoping you may have an opportunity to have a public dialog about it the place you may put your perspective within the hundreds 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. Sure.

I feel that that is completely unequivocally the way forward for the grid. It’s a query of how lengthy can it’s delayed and postpone. However there isn’t a query that you’re promising, and I imagine you, 100% higher service, cleaner for the setting, 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 observe you and share your journey with our readers and listeners as you go struggle this.

And if there’s something we are able to do, please tell us. And actually, 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? Since you’ve obtained 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. For those who don’t have, or haven’t appeared into photo voltaic and power storage in your residence, you have to get off the sofa and do it. For those who haven’t finished it for your small business, it’s best to give us a name. We might help you with that. So I feel it begins with doing what’s essential in your yard.

After which I feel second, you have to 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 resolution, that it’s essential if not for at present, then for tomorrow, that you just get entry to cleaner renewable assets, that these are distributed evenly throughout the native utility. And that ought to come from corporations like Sunnova, working with the utility, and that these providers want to lift the bar as a result of now we have extra power demand coming at us sooner than we are able to think about with electrical autos and different power consuming gadgets.

And we don’t have the availability to satisfy it. And it’s going to proceed to ramp up and impression our day-to-day lives and our means as Individuals to do the issues that we would like and must do, in addition to the getting old grid goes to get extra frail over time. It’s already extraordinarily frail, but it surely’s going to worsen. And the mix 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.

Invoice 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 arduous to think about that that is even a struggle, however it’s. And John and Michael and their groups and all their supporters are placing up an excellent struggle to make what appears to be an apparent resolution, clearly out there. And so I hope you’ll take their recommendation and chime in, let your voice be heard, study this. For those who reside in California, this can be a nice time to go write some letters. And we’re cheering for you guys. And tell us how we might help additional.

In order we wrap up, Michael, we’ve already put John Berger by means of this. So we’re going to only put you thru the lightning spherical questions, which is similar 4 questions we’ve requested, I feel, 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 house are wired. So the primary query for you is, what excites you most about being within the clear power enterprise?

Michael Grasso:

I feel that clear power is the one enterprise on the earth, particularly with photo voltaic and distributed assets that Sunnova presents, gives 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 symbolize the place all people wins on this business.

Invoice Nussey:

For those who might wave a magic wand and alter only one factor, what wouldn’t it be?

Michael Grasso:

That each one shoppers, residential and business, throughout this nation get off their couches and request a photo voltaic quote.

Invoice Nussey:

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

Michael Grasso:

From Sunnova.

John Berger:

He stated from Sunnova can be ultimate.

Invoice Nussey:

Sure. Proper.

Michael Grasso:

I feel that was a fairly, [inaudible 00:49:05].

Invoice Nussey:

You’re a advertising and marketing officer.

Michael Grasso:

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

Invoice Nussey:

I adore it.

Michael Grasso:

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

Invoice Nussey:

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

Michael Grasso:

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

Invoice Nussey:

I adore it.

Michael Grasso:

Name us at present.

Invoice Nussey:

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

Michael Grasso:

This doesn’t go in opposition to technology, however definitely, it’s going to be the electrical car. It’s going to vary the best way that we take into consideration power on this nation, and it’s going to level out and expose all the issues within the centralized monopoly distribution community. And shoppers are going to be informed they don’t have power or can’t get entry to power after they want it. And as an American, we don’t wish to hear that. So I feel EVs are going to actually level out the truth that we want a greater distributed grid.

Invoice Nussey:

And the ultimate query as we wrap up this unimaginable dialogue at present. I’m certain you each get requested from pals, household, neighbors, individuals that you just mentor, what can individuals do as people who aren’t essentially within the business such as you guys are daily? What can they do to make a distinction? And you will have already answered it, however be at liberty to say it yet one more time if you happen to like.

Michael Grasso:

For those who’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 world chief. The way in which that we’re going to try this is being on the forefront of getting clear, renewable power and having sufficient power to provide all of our wants. And the easiest way to try this at present is supporting photo voltaic.

Invoice Nussey:

I adore it. I adore it. And one of many issues that we ask our friends, we didn’t must ask you guys, you’re execs, however say, don’t pitch your organization. However 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 wonderful of us can do for you. We aren’t paid by you guys. We’re simply huge followers. And I feel 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 valuable time with us at present and we want you super success and God pace together with your imaginative and prescient for altering the way forward for power.



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