Intro: So you want to save the world with clean energy, make money doing it. Confused about the economic and technical realities of residential and commercial solar batteries, heat pumps, EVs, want the real world scoop on new energy technologies, not manufacture hype. Then tune into the Weekly Energy Show hosted by Barry Cinnamon.
Insights from Barry’s 40 plus years in the solar and energy industry will help you understand the future ways we’ll generate and consume energy. And now here’s Barry.
Barry Cinnamon: Welcome to this week’s energy show. Now whether it’s climatech, cleantech, greentech, whatever. Big problems create big opportunities and venture capitalists thrive on companies that solve big problems profitably, and at least in many people’s eyes. Not everyone, but many people. One of the biggest problems we have is global warming, and it’s an ideal problem for VCs to attack.
And personally, I’ve been active in the clean tech field really here in California for 25 years. Um, but going back almost 45 years, I got my first job at a college working for a venture backed, concentrating solar company. It was great. I loved it. I did solar undergrad and I got a job in the solar business.
And then I lost my job within the first six months because their venture funding ran out. So I’ve been on the, both the successful and unsuccessful sides of Cleantech investing. But over the past 20 years, climate and Cleantech investing has been a hot category and one of the most successful venture firms is Energy Transition Ventures.
So my guest on the Energy Show this week is Neal Dikeman. He’s a partner at Energy Transition Ventures, and he and his partners at his firm have helped start up a number of the most successful clean tech firms, including both those in DG and Utility Scale Solar. And I got Neal over here. He’s all wound up, and we’re gonna really dive into this.
So welcome to the show, Neal.
Neal Dikeman: Well, thank you. Sorry I missed the email back way in October on getting on this earlier, but it doesn’t matter. This is good. I have spending, been spending literally the last week trying to figure out how to find and back some startups in, in, in your world in this residential, solar and vehicle to grid and home.
All the things that people have been talking about forever and I ought to be able to get, and my partner, Craig Lawrence, who used to be Excel partners back in the day, and then, and then he got up into, into the solar business for a few years, you know, he told me I cannot invest in one of these until I try and buy ’em.
So I have spent the last week trying to acquire myself a Ford Lightning with the vehicle to home package and failing utterly to even get quotes. And so I’m glad I’m on the show tonight because we need to figure this out. I’m very confused why I cannot have nice things.
Barry Cinnamon: All right, well, I wanna get a little bit of a pitch for energy transition ventures.
What’s the philosophy? I know what you’re interested in, so gimme a little overview please.
Neal Dikeman: So this is a early stage venture fund. You know, it’s kind of like all early stage venture funds. We try and find founders and give a few million dollars of checks to founders and help them go build a business. We are very excited.
We do everything in clean tech. If it has the word energy in it, it counts. Well. If we really like the business, we’ll make it fit ’cause well energy’s in everything. The tagline in the company is Energy is life and the rest is just details. But the thesis underneath boils down. We saw this fund in in 21, obviously one of the most brutal vintages and venture capital to come out of.
But we’re doing real well. We have some amazing founders. Portfolios doing great and part of it’s because of the thesis we run on. We started the group group. We sat down like, well we’ve been doing this a long time. What’s different than say 2000 5, 7, 8? Right? What’s new? Same thesis, same everything or what’s changed?
And what we came up with is the following, back then we called it alternative energy. ’cause it was more expensive than conventional energy. And if you didn’t have a great policy framework to underwrite to, you were gonna lose money because everything was about policy. That changed sometime and we’ll call it the twenty seventeen eighteen timeframe.
And I remember writing about this, say 20 12, 20 14, that you could see the crossover point for grid parity coming for solar batteries were still a bit farther out, but like you could see the numbers changing. So somewhere, you know, five, six years ago, all of a sudden in large slots of the world, solar started getting cheaper.
So the big thesis we have today is policy doesn’t matter. Well it does, but now it’s the only thing protecting gas and fossil from the energy transition is bad policies and bad regulators and building codes and all the rest. And this low cost wave with a terawatt of solar manufacturing capacity in China going, you know, flooding the world, couple of terawatt hours of batteries, the capacity out there.
This per year enough to rebuild the entire US grid is now there. We should have it all done. Like climate change should not, this is not a discussion anymore. There’s no point in having a debate except we never got a carbon price and we can’t seem to get all these batteries and solar plugged in because of the government.
So that’s kind of the thesis of ETV is this massive, awesome wave of low cost crystalline and silicon rule number one, never bet against crystalline and silicon. That is changing the world and we wanna ride those waves, find businesses that benefit when you can get a hold of cheap solar and cheap batteries and cheap electrons.
CO2. Well, it should be abated for $20 a ton, not 200. That’s just the way the world should work. There’s no reason not to. Hell. You could buy an oil company for 50 bucks a ton, maybe 40, and just shut the entire thing down if we wanted to do anything above that. Is is pipe dream fantasy wheat? Solar is a negative carbon price, but you can’t get a credit on it because you can’t pass additionality.
So this has been our, our thesis is. All economics this time, and that’s it.
Barry Cinnamon: Yep. And makes total sense. By the way, say hi to Craig. You know, I, I’d love Sun Power. I, I helped them out. Sunrun. We were the first customer, so you made a lot of intelligent investors back in, you know, the Cleantech one or two version, and now we’re in the new version, so coming
Neal Dikeman: back, so, oh, power and Sunrun, you know how those turned out.
Those are massive, huge, impactful companies in our world. And so I thought he was smart. I tried to get him to come. Joined my firm back then and, and he turned me down. I tried to get him to jump into a startup and do something with me a couple years later, and he turned me down. So it took me about a decade to get him to come jump into business with me.
Barry Cinnamon: All right, so I want to address a really good topic. It’s such an obvious question about getting your Ford Lightning to do what you want it to do, and I’ve approached the same thing about a year ago. I started saying, gee, solar’s really cheap. It should be cheap everywhere. It’ll eventually happen. When’s the best time for you to charge up your vehicle?
During the day. ’cause that’s when the sun’s there. And what are you gonna, where are you gonna charge it? You gotta charge it up at work. So we’re gonna assume that there’s gonna be eventually, ’cause it’s so dirt cheap, solar panels everywhere. The country
Neal Dikeman: works from home
Barry Cinnamon: now. You don’t have to charge it at work.
I mean that’s the beauty of this stuff. Yeah, well it, that’s where the sun is. That’s where it is during the day. Right. I don’t care where you charge it. Then what you can do, and here’s where we break the utility of people that don’t have a battery on the house to charge. Well, here’s where we break the business utility.
Both the batteries
Neal Dikeman: are almost free. Yeah. Yeah. Well, okay. Well, we’re gonna come to, we’re gonna come to the cost. I’ve done the calculation. Okay. You can go buy Powerwall for $770 a kilowatt hour, or I can buy an F-150 Lightning for $440 a kilowatt hour, and I get the truck for free. They give me a three truck and a 30% discount on the power wall.
That’s what they gimme. All I gotta do is let me plug it into the wall. I cannot get any of, okay, so let me tell. They’ll sell the product to gimme the product to plug into the wall
Barry Cinnamon: because they don’t wanna do it. And let me explain what will work, who and what’s happening. I would say they, as the car companies and ah, the car companies and the utilities.
So here’s what I did. ’cause I went through the same thing. I felt your pain. I have a solar system in my house. I got a couple of batteries, 20 kilowatt hours.
Neal Dikeman: What’s my real pain? Barry? Let’s stop my real pain. I want to invest in this sector. In fact, if you four people are listening, I will go buy as many of y’all’s lightnings as y’all want, as long as you’ll open up that port and let me pull my power out just like I can pull my gas out of the gas tank.
I’ll set up a whole company to do that and if not, we’ll set up a back wait, wait a million dollars of, of, of seed money to any entrepreneur who will go take out the utility and take out these silly car fees for four Beef. The home is the game changer.
Barry Cinnamon: Ford did it. They just don’t know what they did. No, they didn’t.
They can’t sell me the product. I’ve been to three four dealer. Wait, let ex, let me tell you what the product is. So here’s Sun Run. Yeah, they can’t even gimme a product. We can’t get a quote. What Sunrun was offering is not gonna do what you want it to do. And so what you want to do is you want to use that vehicle battery, which you charged up on your own time.
Heck, if, if you have a weak of cloudy weather, just plug it in at a high speed charger. You can plug it up that way, plug it into your house, and run your house from that. The way the utilities have rigged it is they don’t want you to do that unless you’re completely disconnected from the grid. So here’s what you can do with that forward.
It’s got a 240 volt, 9.2 kilowatt generator output, and you take a cord and you plug it into the truck and you plug the other end into a gateway. And the companies that sell a gateways that are pretty darn close to working, not yet, they’re firmware isn’t working, but you can plug it into a gateway, frankly.
Alright, let’s do the best of those. Which
Neal Dikeman: one do I need?
Barry Cinnamon: You need, well, I can tell you the people to talk to. Okay. You want to talk to people at Franklin who have a generated report input. Nase is doing the same thing. Do they
Neal Dikeman: listen to your show? Because I’m gonna go find their little CEO’s phone number and email and I’m gonna email ’em tomorrow.
Barry Cinnamon: Where, what town? New Rochelle Franklin.
Neal Dikeman: The Franklin people, do they listen to your show?
Barry Cinnamon: Yeah, yeah. I had ’em on the Franklin. People are headquartered in San Jose and actually in New Jersey, my home state. So Franklin will do it. Nase will do it. Once they’ve got the firmware working and you know, I got tour to their factory and they’re showing that capability, SolarEdge can do it.
And there was one other, and Tesla can kind of sort of do it, but I kind of focus on Franklin Enphase and Solar Edge. So you plug that truck into the generator input of their gateway, and when there’s a blackout, then it automatically pulls energy from the truck, power the house, 9.2 kilowatts. It’s plenty when the blackout stops.
You can go back to grid power, you can go back to battery power. Maybe even, you can stay on vehicle power as long as there’s plenty of juice in there.
Neal Dikeman: So you just told me they built this very nice, expensive system that is supposed to, you know, run my house and you need me to heck it through their little pro, you know, generator AC switch in the back.
Barry Cinnamon: Yes,
Neal Dikeman: yes. Okay. That’s nuts. That’s why. That’s nuts. It works. It’s got they built, they built a whole product that is supposed to simply seamlessly power my house.
Barry Cinnamon: How hard is it? They built it so that contractors can send 240 volts of AC power to a greenfield where somebody’s starting to build a house.
That’s why they built it. They didn’t think that people like you or me would say, Hey, let me plug that into my house so I can give the middle finger to the utility. They didn’t think about that, but that’s what you can do. I want,
Neal Dikeman: I wanna back a company. That enables. Normal Americans to quote the cord, meaning the utility line.
I want people to be able to Netflix the utilities back in the day, back in the day being 2000 years ago. Yeah. One of the Roman senators, Cicero would get up and he would, you know, give all his speech about Carthage and he’d, he’d end every speech no matter what it was about with cargo, Delinda est, Carthage must be destroyed.
The only motto that matters today is util X, the utility must be destroyed. This is why we can’t have nice things. If I can’t cut the cord, I at least want to cut them down to basically their, their base rate, customer charge. So they’re gonna do
Barry Cinnamon: right. They’re doing everything in their power to keep their monopoly.
And they make it difficult. There’s a law in California, probably other states too, that you can’t connect power from one building or parcel to another. I can’t run
Neal Dikeman: an extension for, from my, I know. I’ve, I’ve run through that. So, so you try and get a permit to run a, a piece of utility line across a property line.
Your life goes to hell.
Barry Cinnamon: Yep. Yep. You can’t do it. But what you can do is charge that truck up at home during the day, or at work, or even at a, a high speed charger and drive that electricity to another place. That’s why they’re getting screwed. That’s why this makes so much sense. You can drive the electricity in a big honking battery instead of just run a wire.
So let’s work on that and I can point you to the right. The right people, CEOs, whatever, at these three companies and you can talk to them and then, you know, oh, we’re big companies. We’re not sure we really wanna do that. And maybe you want to go a different direction, but it’s definitely possible and I am looking forward to the time and I’ve had conversations with this a lot over the last six months where I can disconnect my house from the grid.
I’ve got solar, I’ve got a couple of batteries. I’ve got, uh, Ford Lightning that gives me 9.2 kilowatts at 131 kilowatt hour battery. That’s the way to go. And the utilities will do. I mean, this is, you have to realize, you know, the utilities will do everything in their power to stop that because it’s such an obvious, easy thing.
Neal Dikeman: Well, that’s nice. I’m waiting for us today where I can buy a product where they have to scramble to try.
Barry Cinnamon: Yep.
Neal Dikeman: That’s exactly the world that we, we need here. Yeah.
Barry Cinnamon: Yeah. And
Neal Dikeman: we’re so close, like I’m, I’m calculating it up. Right. You know, we’re so, so, so close. The battery is free or the truck is free depending on what you wanna count.
Right. We, we’ve now established that. Yeah, the solar modules, I go on Facebook marketplace and people will sell brand new pallets of them for 25, 30 cents a lot. Just like, hey, you know, the, the cost is having to drive over in my pickup truck to pick them up. That’s the cost, like $2 a mile to bring ’em to me.
Like according to last guy I was looking for on Facebook marketplace. The hardware you, you told me earlier with the invert inverter for a home is what, 1500 2000
Barry Cinnamon: bucks? Yep, yep. Depends on the size. Okay. And
Neal Dikeman: so 1500 bucks or so somehow that, uh, yeah, that system, that Sunrun is building, they are without the charger.
They’re charging like four grand. And you know what? Price, it appears to be the same price, whether it’s a four kw or a 10 KW inverter. So literally I’m just paying for their packaging they use and there’s a target on top of that.
Barry Cinnamon: Yeah. The main inverter companies right now are making the same size inverter, whether it’s four kilowatts or 10 kilowatts, and exactly the same, and they just have software settings that allow it.
You know, we’re gonna allow it to go up to 10 kilowatts.
Neal Dikeman: 10 kw. Yeah.
Barry Cinnamon: Yeah,
Neal Dikeman: exactly. Yeah. So, yeah, skip, I’m looking at the hardware on this. So mean my house, I have 600 kilowatt hours to 2,400 kilowatt hours a month. I don’t pull very much. It’s, it’s just a normal house. There’s nothing, nothing fancy that’s,
Barry Cinnamon: that’s almost abnormal.
The average is a thousand. You gotta run the air conditioner more.
Neal Dikeman: So in August, I’m at 2,400 or so. Okay. Yeah. Right now in December I’m probably 600. Yeah. Right. So the, the f150, there’s enough batteries sitting in that thing to run my house for two, three days to a week. Yep. That’s, that’s just nothing, nothing go in.
I mean, this is awesome. So the modules, but let’s say I need, you know, 10 kilowatts of solar on my roof. Now granted that’s, I probably can’t fit that much on my roof ’cause I have some big, pretty oak trees. That’s why I don’t have it on my roof now. Let’s say I went and put that on there. That’s $2,500 off of, you know, from the distributor right now for the materials.
$1,500 for the inverter. Now I’m gonna have to pay 4,000 to get the little Sunrun package, unless I do your hack. But, so, but let’s, let’s say we can get, get just a good product direct. I need a, a charger, which the inverter should be the charger, but somehow they’re not making that for me yet. So let’s call it $2,000 plus my 2,500 or 3000.
Let’s round up to five grand. Every piece of material I need to take my house off. The grid shows up on a pallet in the front lawn. So five grand is less than I’ll pay for the furnace or the HVAC when I go have the HVAC redone. But somehow the bid quotes you get from, from the solar people, they, they’re like, Hey.
We would like you. What’s your utility bill? We’ll give you a cheaper rate. We’ll finance it. PPA, they pay that due a huge commission, and all of a sudden I get, I’m paying like, well, hang on. This is an awful deal. I’ll tell you what, I’ll give you five grand, how many hours it take to do that. What do you want?
A hundred dollars an hour, $200 an hour, doesn’t matter. I’ll pay you by the hour and for, I’ll just stick it on my credit card. I know people who buy for refrigerators that cost more than this. So, Neal, Neal,
Barry Cinnamon: I wanna point you in the direction of something that I know is gonna be solvable, which is this vehicle to home.
And I’m gonna give you some of the caveats about why solar isn’t cheaper. Because in 2007 I was scratching my head and, ’cause I was a big installer in California, I said, why is it $6 a wat here? I, I said, why is it $6 a watt for solar in California and it’s $3 a watt in Germany. This was in, you know, this is almost 20 years ago.
Exactly. And I went to Germany and I met with like six or seven solar companies with my friend Jeff Brown. And we just drove around having a great time drinking beer and driving at different times, obviously, and we could never get an answer. I don’t speak German. And I was at one of the last places and I said, show me the paperwork you have for connecting.
And, and they looked at me like. Paperwork. What paperwork? Paperwork, what paperwork? And I’m like, ah. And so they had an invoice with how much it was gonna cost with what they were installing. And then they went to the internet and they went onto this thing called the KFW Bank. And financing was automatic.
And so it continues. Average solar cost in California is probably around $4 a watt, in spite of the fact that you can get the stuff really cheap. There should be a 10th of that, but it’s not. In order for companies to stay in business and make a profit, it’s higher and it’s mostly the paperwork, but there’s a lot of other stuff, so I don’t want to get dive into it.
But the good news is you’re absolutely right. We have this benefit of making energy and the more panels we make. The farther we go down the learning curve, the cheaper it is. So it went from a hundred dollars a watt to $10 a watt to five to one. Now they’re selling them in China for 20 cents. A wat or less, 10 cents a watt.
So it’s coming down. It’s kind of like a, the panels now free
Neal Dikeman: in the equation. It, the panels are free that over 5, 10, 15, what? Pick any amount of years. The module is effectively free. The battery is almost free. Ford is giving you an entire truck. If you buy their batteries. It’s like, would you like a toaster or a truck with that?
I would like the truck piece. Yeah. Yeah. So I, I agree. What, you still got four? It’s, that’s, well, we’re not gonna change that anytime soon. I’m just, even if panels were free. Yes. Are, we’re Barry. We’re gonna back somebody who wants to change that. Okay. We’re going to, that is the game.
Barry Cinnamon: And, and there’s some big improvements.
There’s something called the solar app that was created that, that Israel, that’s, that’s saving some time.
Neal Dikeman: In, I called every single customer that NRA had on that solar app I got on the phone with, I introduced them to like three or four or five cities. Yeah. And like, Hey, call up city administrator. Having to meet people.
I know you should use this. It’s awesome. I talked to a customer like, oh yeah, it’s all online. It’s very great. I don’t have to drive out to the middle of nowhere anymore for all these, these permits and inspections. Yeah, just, we just sign off. It’s fantastic. But it’s not being used. Here’s using it.
Barry Cinnamon: Yeah.
Well, we’re using it and initially we didn’t use it because we installed batteries in almost a hundred percent of the systems, but now we’re using it in most of the jurisdiction’s that Great. Oh,
Neal Dikeman: can you not do batteries in it? I guess. Okay. Well, no,
Barry Cinnamon: no. Now you can. Initially you couldn’t and, and now, because there’s all kinds of battery regulations now we’re doing, but that’s not the issue.
You know what? The bigger issue that’s killing us right now. Utilities are dragging their fee, pg e and the others, they’re making it so difficult. They’re creating so many rules, they’re delaying everything. And that’s an absolute nightmare. And I gotta, you know, we gotta make payroll. You gotta keep, you gotta charge enough money so that you can survive for six months while the utilities get around to reviewing your application three times and correcting the three mistakes and finally accepting it.
So there’s that utility business model that’s in the way. And so, but one thing, I’d love to get your insights on this, what happens when energy. Is not, I mean, 64 cents a kilowatt hour is what it’s here in California. What happens when electricity, even from everybody, is 10 cents a kilowatt hour? And Neal, that’s what it is when you’re putting in solar for $4 a kilowatt hour.
But let’s say it’s only 10 cents, what industries does that blow up? I mean, you
Neal Dikeman: know, 10 cents. I have no interest in paying 10 cents. The wholesale power rate in Texas is free. Two, whatever, you know, it’s, uh, yeah, I, it’s the, the expensive part. Energy is already free. Very, the only thing that’s expensive is power.
Power is not free. Energy is now free. Distribution’s not free. Labor is not free. The energy is. Freight. Like when we talk about you want your German story, what about this German balcony thing that made the news, you know, call it 18 months or so ago, where Germany decided, okay, we’ll just let you plug generations straight into your wall socket.
As long as it’s less than 800 Watson magically this Oh. People in agency problem of, of tenants and renters and multifamily apartment, it, they can, they’ll never do it. Oh yeah. They’ll, you gotta plug it in without having to call for some inspection or, or the government. They’ll just plug it in and they’ll generate, we knock a
Barry Cinnamon: third load.
Yeah, I, I responded to a DOE proposal on that about in 2012 or so, and it was plug and play solar and we looked at that exact application and I developed, I don’t know if you know, but we came out, my company Akina, came out with very first. AC module, you could plug it into the wall. We did this in 2009 or so.
First AC module, got UL listing for it and everything, so it was kosher. But the electric code rules are that if you’re gonna plug it into a wall socket, it has to only put out as much power isn’t gonna fry any of the wires. So that’s a problem in Germany. There’s a way with a relatively small system you can get around it.
Nobody in the US is gonna be able to sell that unless they can prove to the local inspector we won’t change
Neal Dikeman: the rule, we’ll change the code.
Barry Cinnamon: Well, you can’t change the code because the problem is the wire in the wall. But there are devices that you can use that would keep the wire in the wall from overheating.
So there’s a way to do that. Now the interesting thing about Germany, ’cause I I kind of was all over that, that story too. Put it on, put it vertical on the wall. I
Neal Dikeman: have, I have rewired entire houses. For $5,000, like the whole thing. Every fixture, every switch. Yeah, all the wires, the breaker box, all of it.
Okay. I literally just won’t pull all the wires. You can re-plumb a house through five or $7,000. You can Sure rewire it.
Barry Cinnamon: It’s not hard. Yeah, it’s not. Also not hard just to take five of those things, plug ’em all together. A company called Soul Pad tried and they never really got that got too far. But you take five of those things and each of ’em is putting out, say, I don’t know, pick a high number, 400 watts.
You got 2000 watts. You run a circuit and you put it into your electric panel. You could do that. One of the dilemmas, and this is where Germany has an advantage, there is such a high latitude that vertical is not so bad, but you get to Houston, you know it’s, it’s 90 degrees. You really want the thing tilted at 20 degrees, but it doesn’t matter.
You’re still gonna get energy if it’s on a south facing or west facing or northeast facing roof. If you put it on the north, you’re not gonna get Why. If I
Neal Dikeman: don’t have to call an installer and if I don’t have to deal with the government. Then it really doesn’t matter if I only make half the performance off of it.
The module is so cheap. They’ll sell you a module online for 60 bucks.
Barry Cinnamon: Yeah, yeah.
Neal Dikeman: No, I know.
Barry Cinnamon: Yeah. And that gadget that they’re selling in Germany probably goes for like 500 bucks for each, and it puts out three, 400 wa.
Neal Dikeman: That’s a huge margin in it. And they’re buying.
Barry Cinnamon: Yep. Yep, yep, yep.
Neal Dikeman: What do we have to change?
Can, can you get me a list of the things that we would have to change to accomplish that here? What laws do I gotta change?
Barry Cinnamon: The hardest thing to change is the National Electric Code, which goes in like six year code cycles. But true, there are ways but that, but
Neal Dikeman: I don’t have to change that because the city’s adopted.
Well, can I just hand a model law to a city and say National Code, except. This Right to generate permitless solar right here.
Barry Cinnamon: Well, you have the right to generate, but they’re not gonna allow you to do anything. They don’t have a right
Neal Dikeman: to generate. Well, they’re not, they, they have the right to make it so hard that your right to generate those to zero.
No. That’s what’s happening.
Barry Cinnamon: You have the right to generate as long as it’s generating safely. No city will allow you to put anything if the inspector right or wrong thinks that, oh, it could cause a fire. And they all rely on the National Electric Code to define that. So, alright, let’s keep going. Let’s talk about the utility business model.
How do we change that? That’s the biggest impact. The vehicle to
Neal Dikeman: grid the vehicle to home. Vehicle home. The only way to change it. The only way practically. Is to buy some of the utilities and just shut ’em down or take the vehicle to home and create competition. It’s like Netflix. It’s cutting the cord until the cord cutting is physically possible.
They will still continue to cause us to not have nice things, and climate change will not get solved. The moment you can cut the cord, we will force the change. That is why this is so important. There’s nothing more important than unleashing the massive amount of batteries out here to allow individual homes to plug in and getting the cost of solar down to the 50 cents.
A lot that it should be. So that we can have nice things. The only way we’re solving climate change is that if we fail to do that, we’re not gonna solve it. Hey, so I guess a question, ‘
Barry Cinnamon: cause candidly, Sunrun and Tesla are the two companies that were closest to being able to do this, and they also do a lot of virtual power plants.
You know, I kind of scratch my head and and think, you know, why haven’t they done this? And I have kind of a paranoid conspiracy reasoning. And the reason is that Tesla likes to sell utility batteries. And Sunrun likes to sell virtual power plant concepts to utilities. So both of those companies, in my mind, may be conflicted when they look at trying to do exactly what you and I want to do.
So we gotta go around them. That’s the way I would
Neal Dikeman: say I, I mean, I don’t believe, I don’t generally subscribe to conspiracy theories. I generally look at what their incentives are. Right. You know, Tesla over the years has been very busy selling cars, and now they’re very busy selling batteries. My guess is if Elon had not bought Twitter and he was bored, he would’ve gone and dealt with this.
Maybe he’ll get to it in 2030. It’s like all the pieces are in place. Sunrun, I don’t know. I was never involved in that company, so I don’t know the, the culture and the opportunity, I mean, but what they built with Ford looks to me, if I could buy it and it didn’t break when I tried to plug it in and the comms would work in whatever issue with the Ford.
Communications was thick. That’s for four grand. That solves my problem, I think. But I can’t get one because literally the four pillar can’t, I can’t figure out how to host in the po. No, you don’t.
Barry Cinnamon: You don’t wanna buy it ’cause it doesn’t work. I mean, there was four or $5,000 worth of hardware, five or $6,000 worth of installation, aggravation, pain in the neck, configuration, and at the end of the day, it’s still going to not do what you really want it to do, which is.
Use your Ford truck as the primary source of electricity for the home.
Neal Dikeman: Ah, gotcha. So, so what, what you would think I need, and which I, I probably agree is what you think I need is a battery system where I’m running, I’m running my power line in through my battery, down through my inverter, into my battery, and I’m running my home in a microgrid, in a semi island in microgrid configuration.
Said, and where I’m just feeding the, feeding the car into my own battery. I need, essentially that’s, well, of course that little Sunrun thing. It’s got little black start battery in there, which only has to happen because, well, you don’t have a battery on the house. And if I follow correctly, I’ve got like three times the power electronics I need on all this stuff because it’s not wired up together and I shouldn’t need a charger.
Because the inverter should be able to do the charging if you design it to do so, but they didn’t do that. So it’s just extra hardware and stuff. But it still should do most of the job.
Barry Cinnamon: Yeah. You know what’s interesting, and I’m also looking at this, all the car companies are trying to subscribe to a new vehicle to grid protocol, which allows them to take DC power outta the battery, which is kind of great.
Why verdict it? And then you can take that DC power, put it into a box that’s gonna send AC back to the grid, or put it into a box that’s gonna put AC into your house. Right? What Ford did accidentally. And what Tesla did accidentally with the cyber truck is they put a fricking nine kilowatt inverter in the truck.
Not that expensive. When you do it in volume and you can pull that AC power, you need it from your house, split phase 240 volts into the house. It should work. It’s very close to working. And you know, those three companies that I mentioned are pretty close to making it happen, and that’s
Neal Dikeman: where I would start.
What they didn’t do is set that up in a way. Where it’ll simply load, follow straight out of the ports. They, it’s like that’s my pro package to, you know, run my power tools when I’m out on a job site, which is cool. I want that too. But yeah, all you had to do was configure that so that I could go straight into a transfer switch with a little automated clip thing, and all I gotta do is plug it in and finds home provisions and goes, I don’t need.
I don’t need, I just need it to load. Follow the box. Now. Have you seen the GM product? I got a chance to, uh, to get the little demo of that today, online with the, they just rolled it out, the GM storage system. It’s supposed to compete with the Powerwall. And then a few months ago, the, the vehicle to home package that they’ve got, that one’s about five grand on retail, but it’s a five grand on retail that includes the charger.
So it’s pretty much the same as what Ford is, is trying to sell. And they, at least I can get ’em on the phone and. And walked through it. She took me, spent two hours or an hour or an hour walking me through the, the various configurations. I can download the manuals. It looks like it does this job.
Barry Cinnamon: Yeah. All of those, of those, not the DC
Neal Dikeman: configuration you’re describing, but it looks like it does the job.
Barry Cinnamon: All of those systems, and I dug into the, the GM system earlier. Much earlier this year when there was some information on it. They’re all kind of designed to support utility, virtual power plant and vehicle to grid programs. That’s how they designed it. That’s what those boxes do. They don’t make it easy to do what you want.
This is not
Neal Dikeman: worrying about. Yep. I have no interest in supporting some utilities. Still a little program. I have an interest in cutting the cord. I don’t think consumers have any interest. Vehicle to grid or DER, they never did. We had technology to do. My mom on our house in the eighties, we had a little box from, uh, what’s now gunpoint.
And that little box, it’s h, l and P. That’s the little box allowed you to basically allow them to monitor your ac. You just kind of stuck it on the AC and it allowed them to chop the ac. Yep. And, and they gave you few dollars a month back for it. That box’s been gone a long time. Nobody cares. I don’t want to support them.
I want to cut the cord. We’re in. You’re in California. I’m the same way. I, Houston Grid did not work.
Barry Cinnamon: Yeah. I want to cut the, there’s, listen, there’s no altruism from customers to their friendly utility. There’s no such thing as a friendly local utility. They’re making tons of profit, which that’s the way they’ve rigged the rules.
That’s what we’re able to do. So let’s, so you and I, let’s follow up more issue
Neal Dikeman: what solar installers, why are they making too much money?
Barry Cinnamon: Ask the ones that are going bankrupt.
Neal Dikeman: Well, okay. How are they going bankrupt when the cost of their supply keeps falling and costs virtually nothing? I’ll tell you what’s wrong.
Something’s wrong here. How do we, what? Why is it happening? ’cause because
Barry Cinnamon: suddenly, well, in California and this is happening elsewhere, suddenly their business gets more complicated. It’s harder to sell. There’s delays. So here’s a bizarre fact. When solar modules were
Neal Dikeman: to sell is ’cause they overpriced at $4 a wat.
Of course it’s hard to sell. Well for a dollar a wat they’ll move like hotcakes,
Barry Cinnamon: but then they can’t afford the two and a half dollars a watt cost to run the business. That’s kind of my reality. Why do you
Neal Dikeman: want and half a watt to run the business? That makes no sense. Why are we even talking about it in Watts?
It’s like, okay, the package, the hardware package to run my house is, call it. Five, 6,000 bucks. Actually, probably less than that. It’s probably $4,000 in hardware. I can probably nickel it down to three, maybe 12, $8,000 or $10,000 in hardware if I were buying the battery. Just a full hardware stack, that’s to run my whole house.
The labor to do it is not that many hours, so something’s wrong. The, the materials markup on the effect material. So, so ho hold
Barry Cinnamon: on. I agree. And in Australia and in Germany, it’s half the price and there’s vibrant companies that are selling at $2 a wat, not $4 a watt, but trying to run this business as leanly as possible.
We’re not gonna magically fix that, but I think with the right policies, we can get to this point where we’ve got. We’re able to disconnect from the great cut in the court, as you said. So anyway, that’s something that we should talk about more. I can introduce you to some of the people. Do you have any comments at all about, you know, how we can improve the policies that are gonna make it better?
You know, what do you think of the new administration and how are they gonna help us change this?
Neal Dikeman: So if we’re lucky, the new administration will just get rid of policies, randomly, policies, regulators, like just get rid of things, just subtract. And hopefully, if we’re lucky, they’ll randomly get rid of one of the ones that’s blocking us.
The only thing protecting Fossil is the government and these building codes, bad policies, electrical code, and all the rest. Otherwise, fossil would be absolutely screwed. Henry Hub Gas today is half the price on a real basis that it was when I started working in the oil pack in 1997. It’s still $2 in change on MB to U and $2 on M and the dollar’s down.
50 cents on the dollar since 1997. In inflation, it’s like, and solar is still cheaper. The only thing protecting them is these silly little rules. So the question that we’re interested in, number one, is what rules, what law, at what levels have to change for us to have. Take the whole shebang, fix this. So there’s, let’s go get some king.
Barry Cinnamon: So there’s, there’s hard things to change and I kind of ran into this. The really, really hard things to change are changing all the rules involved as to why our wages are high, why it’s so hard to get permits, you know, et cetera. Yeah. The one thing that we can change that’s gonna. Really help this specific thing is change the utility business model and change it so that they don’t make more money as they make electricity more expensive.
That’s what we have to change, and, and, and
Neal Dikeman: I, I believe the only way to do that is to get vehicle to home. One company making vehicle to home and solar on your little roof. Cheap enough so that customers can start, if not cutting the cord, dialing back their power use so far en mass that the utilities throw a fit, try and create exit fees and revamp the model.
And in that chaos we will get the, the lines company, the rate based model broken and rebuilt. So, but in Tel then there’s, the only other way to do it is to buy the utility and change it yourself now, which isn’t that expensive. I mean, yeah, Tesla could buy a CenterPoint for like a few percent of its market cap.
It’s like for pg e. What’s pg e’s market cap right now?
Barry Cinnamon: I don’t know, but they made $2.3 billion in profit last year, which was amazing. I dunno what the market cap is. It’s amazing. ’cause they, they were bankrupt, you know, they went bankrupt seven or eight years ago. So I agree. And the way to do that is to figure out how to make a viable vehicle to home system when you run the numbers.
And I’ve got some economist friends and, and that have done this is, we are at that point. Where economically it makes sense in every sunny area with high electric rates to go. To cut the grid. To cut the cord.
Neal Dikeman: Except, except for the installers. No. Even you have to break off No. Even, no.
Barry Cinnamon: Wait, wait, wait, wait.
No. This is at market prices that as you point out ridiculously high and I don’t what to do about it. Ridiculously high cost for solar and battery. Even at that price, it makes sense to go to cut the cord. As long as you have vehicle to home. So that’s what we need to solve. Correct. That’s just like you said, find the right startup, push ’em, have ‘
Neal Dikeman: em,
Barry Cinnamon: partner with GM and Ford.
We what
Neal Dikeman: looking for, we are looking for teams that are interested in creating this, this change. And I don’t care if they have to tell us, look, the only way to be successful is change the law. As long as they can tell me which law and which politicians who we gotta send the lobbying and the campaign contributions to and what model of law we gotta right to fix it.
And we are looking for teams that are want to fix vehicle to home. No matter what it takes, and we’re looking for teams that want to drive the price down. I don’t care if you make any margin. I want the whole market. I wanna change all of it. Yeah. So what I don’t want is something that comes in is like, thinks $2 a lot is acceptable.
That is unacceptable. If it’s not a dollar, a lot or less. We’re not interested. I don’t wanna talk about it because I can see the cost of the hardware and I can see the number of labor hours, and it is unacceptable that we cannot work a business model to make money yet at these levels.
Barry Cinnamon: All right, so the latter is tough, but I understand completely, and I’ve been trying to find this for a year and encourage.
The big companies to do this. How can people get in touch with you at Energy Transition Ventures? If they have an idea on how to reduce the cost of solar dramatically, and I’m really personally interested in anybody that knows how to solve this vehicle to home problem so that it makes it easy for people to disconnect from the grid.
What’s your phone? What’s your email? What’s your URL?
Neal Dikeman: So Energy Transition Ventures is the website. If you go to LinkedIn, you can find me. All my information is published there and frankly, I respond to messages there faster than I do anything else. Yeah. So just come find me. We are, we’ve been investing since 21.
We still got dry powder. These are the areas that we want to invest in. You know, we are looking for teams that wanna launch it and we’ve just kind of been running into, you know, teams that are accepting the status quo is okay. And that’s what we need to find is the teams like, look. I want dollar per watt and less 50 cent per watt home solar.
I want to get the cost out and figure out how to make it easy to cut the cord. Let’s kind of figure out how right. I just need to back, as Craig says, I’m not allowed to go work on the business anymore. I’m supposed to find founders and invest in them, but we gotta find a few to back.
Barry Cinnamon: All right. That sounds good.
You gonna do
Neal Dikeman: this for me, Barry?
Barry Cinnamon: This
Neal Dikeman: is like you.
Barry Cinnamon: I’ve been trying to do this for years and years. Like I can’t think of anybody I hate more than the utilities. On the other hand, at the rate they keep ratings raising electric rates. They’re my best marketing partner. 64 cents a kilowatt hour electricity going up 10 or 15% a year is a great way to sell, as you point out expensive solar.
Okay. One more question and I don’t want to kind of digress. Okay. What do you do for fun?
Neal Dikeman: Well talk about this on podcasts. I’ve got a number of little projects. I do my latest little project. I’ve got a couple of antique buildings up in a small town in Texas called Calvert that we’re about to restore.
Yeah. Haven’t been restored in a long time and it’s fun. I like fixing old things. Yeah. Then I go fishing and hang out with my family and, and kids and stuff. That’s pretty much it. I’ve become a boring individual. I was much more fun back in the day, I think.
Barry Cinnamon: Well, you’re a lot of fun now, and I think the other solution to our energy problem is somehow harness all your energy, enthusiasm, and excitement and somehow plug that into the house.
So anyway, with that, that’s all the time we have on this week’s energy show. Thanks Neal for joining me on this week’s podcast. And thanks to all of our listeners for tuning in. If you missed any of today’s show. You can always go to the Energy Show [email protected] and listen to the podcasts.
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