Residential solar is becoming residential solar + storage + VPP

Volts

In this episode, I chat with Sunrun CEO Mary Powell about how residential solar is evolving into much more than just panels. We dive into Sunrun’s expansion as a “clean energy lifestyle” brand, Mary’s belief in a customer-led energy transition, and alternatives to the tech bros' virile obsession with nuclear power.

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David Roberts

Hello everyone, this is Volts for November 13, 2024. "Residential solar is becoming residential solar + storage + VPP." I'm your host, David Roberts. Last month, I was in Brooklyn for the third annual DERvos conference celebrating distributed energy resources or DERs. It was truly a blast.

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Most conference sessions are, if we are being honest, boring — someone droning on in front of a PowerPoint slide with too much text on it — but these were different: real, urgent discussions among people operating at the cutting edge of technology, business, and regulation. Not only was everyone on stage involved with fascinating work, everyone in the audience seemed to be.

Mary Powell

I don't think I've ever experienced a higher concentration of interesting people. If you can make it next year, it is highly recommended! (You can watch all the sessions at the DER Task Force website.) Anyway, at the event, I had the pleasure of interviewing Mary Powell, the CEO of Sunrun. Powell was on Volts last year.

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This conversation was a chance to catch up with her about what has changed since then, which it turns out is a lot. It was cool to hear about this market shifting toward whole-home electrification and virtual power plants. I hope you enjoy the conversation as much as I did.

David Roberts

Hello, everyone.

Mary Powell

What a fun chair setup. Woo hoo, hi! Let's go.

David Roberts

I've been joking that this is the greatest concentration of Volts' guests ever assembled in one place. So, I've had many of you on my pod, and many of you will come on the pod in the future. So, welcome to everyone. I'm just going to jump right into it. So, Mary, two, three years ago, you could have described Sunrun pretty simply as a company that sells solar panels to people and puts them on roofs. I don't think that captures what Sunrun is anymore. So, what is Sunrun? What kind of business are you?

Mary Powell

Yeah, we have evolved a lot. So, first of all, it's just so nice to be with all of you here today and so awesome to be with you in person. And like, let's go Volts. Like, let's cheer. Come on. Woo. We need —

David Roberts

You can do the Elon thing.

Mary Powell

Exactly. That's awesome. We need you. We need you, we need your voice. We need everybody in the audience. You know, I've been doing this work of what I've called "accelerating a customer-led revolution to a better energy future for all of America" for a long time. And the work that you're doing every single day to amplify and get the word out there that we're not waiting for technology and innovation to happen, it's happened, it's here and we need to radically accelerate it. So it's just awesome to be here.

And I want the Sunrun team to stand up, Sunrun team, because I was actually telling them like — let's give them a round of applause — like let's go! Right there, those are our warriors that are helping to take us from, you know, as you said, a company that for a long time frankly sold solar panels and put them on people's roofs. And that was a good thing for a while. Right. But ultimately what we really need to be is a clean-energy lifestyle company. And what we really need to do to accelerate this dramatic consumer-led revolution is make it super easy for customers to adopt technologies that can not only improve and transform their own lives, but then through that magnificent team I just had stand up, that can be leveraged all those technologies to make the grid more affordable and resilient for all.

So yes, we made a hard pivot. I made a hard pivot when I came to Sunrun, from a company that sold solar and about 12% of the time sold you something else. So, about 12% of the time, a customer bought a battery, that was the primary thing. Occasionally, then we had them buy an EV charger, occasionally some other things. And we radically focused on how do we amp up, you know, particularly storage. Right. To really create that incredible distributed power plant that we now have. And I'm proud to say that now 56% of our installed customers have solar plus storage.

And not just that, like that. It's amazing. It's amazing. We've done that in a very short period of time.

David Roberts

You have some battery-only customers now? Is that, is that —

Mary Powell

We're heading that way. We are heading that way. I think, as I mentioned to you, I very much also want us to be innovating. We have that on our product roadmap to be providing storage as a storage-first solution for customers that may not have the right situation for solar or may just have a preference for storage plus other kinds of technologies like we're working with SPAN. So, it's ultimately about having our consumers become part of that revolution and then have us work with them to turn their home and their electric vehicle into s mart, controllable load for them and then using that same smart, controllable load to drive down the cost of the grid.

David Roberts

So, you say 56% of solar customers are getting batteries too. What about the EV chargers? Are they a meaningful percentage yet? Are they growing? How big of a piece of the puzzle?

Mary Powell

I would say it was really important to me that we start providing EV charging as a part of our offering. Because so many customers, as we all know, one of the cool things about solar and storage, but I would say maybe solar a little bit more, is it's really a gateway drug to additional electrification. So what we found, even when I was running a utility at Green Mountain, I always used to say, "Geez, these utilities are so shortsighted because really what happens is they go solar and then they want an EV and then they go to heat pumps."

So yes, we launched an EV charger, if nothing else, just to inspire that thinking and accelerate that thinking. And we now have a couple thousand customers with EV chargers. One of the really exciting things though was also our partnership on the Ford F-150 Lightning. So yeah, woo. Like it's really a big deal. This is what's fun about doing these events because you get amazing briefing documents from your team and you find out things that you had no idea. And I knew that we were doing a really cool partnership in Maryland using our F-150s to support the grid.

What I didn't realize is, like one of those customers, just like one customer with his Ford electric F-150 that is backing up the grid, he's chosen to do it so many times that he's gotten seventeen hundred dollars in credits. Think about how powerful that is in accelerating the consumer-led revolution, also to electric vehicles. When we can scale that kind of technological solution for the grid, that is also a strong value proposition for the customer.

David Roberts

Is it your, your vision that the electric vehicle charger becomes a standard part of the offering or was that just sort of like an experiment off thing? Like are you trying to push that into the standard customer package?

Mary Powell

I would say what I want to do is meet customers wherever they are on the clean energy lifestyle journey. So, our vision is to, we're launching an expanded solar offering as well, which I think will inspire more storage, will inspire more electrification in the home. And so, my desire frankly is just to meet customers wherever they are on the journey with solutions. So, I don't think it's so much as like pushing that everybody should have one as much as becoming that beloved trusted partner on their clean energy journey. And I feel like that's what I hear.

I spend a lot of time talking to customers. I call customers every week. I work in our Lowe's stores. I've knocked on doors with our folks that are out in the field. And you know, more and more, what I hear is customers want exactly what we're trying to do, which is to be that trusted partner to meet them where they are and provide solutions, and in some cases, that they didn't even realize they need. I was in Massachusetts last week, meeting with a bunch of potential customers, and, you know, it was just fascinating to walk them through the journey of why they were initially interested in solar.

And then by the end of the conversation, they're interested in storage, they're interested in EV charging, they're — because they're thinking of it from the perspective of "What are all the features and benefits I can have to make my life feel more stable, more secure, and cost-effective?"

David Roberts

One sort of negative question, we'll get it out of the way earlier: I just wanted to kind of ping you on what kind of damage did the NEM decision in California do? I know it hit your stock price. It hit the stock price of every solar company, I think. I know you've had to slash some of your teams. What's your take on that? Are you just writing California off and trying to go a different direction? Are you still fighting that battle? Like, what is — what's your take on California?

Mary Powell

So, my take on that, you know, it was just dumb. Like, my take was — it wasn't actually directionally, directionally, it wasn't dumb at all. Like, and I actually think some of the most exciting stuff I've seen around the country has actually been inspired by regulators. You know, I ran a utility for a long time. I'm glad that there's more and more, like, little signs of life going on. But, like, the reality is, like, regulators are actually what's inspiring a lot of good stuff that has happened around our country. And so to me, what was painful about it was that it directionally, it was good, right?

Like, directionally, the notion of getting more storage on the grid, "Hot damn, Hallelujah." I mean, I did that as, you know, as a utility way back in 2014, 2015. It's an amazing asset if we can have both solar and storage on the grid. The dumb part was, why do it in such an incredibly abrupt, abrasive way? Like that was. I mean, I remember talking to folks in California at the time in the "for what it's worth" category of just like, "Hey, like, directionally it seems good. This is not providing for a smooth transition." So, Sunrun, you know, I feel bad in some ways because I feel like we were disproportionately favored in that because we did have storage expertise and we really leveraged it to dramatically increase our storage expertise and to really pivot the company.

But as we also know, a lot of, you know, definitely the solar-only sales dealers, the smaller companies, the mom and pops, like, it was very, very devastating. And it also was at the same time as interest rates were going up, which also just compounded, making it a more challenging time to do such an abrupt transition. So it goes that old adage we all learned when we were kids, "It's not what you do, it's how you do it." How they did it was dumb.

David Roberts

When you say "directionally correct," do you mean that you agree that solar was being compensated at too high a level?

Mary Powell

No.

David Roberts

What do you mean by directionally correct?

Mary Powell

What I agree with is — no, and in fact, like, that was part of the, you know — separating the noise from the truth is always hard. That's why what you do is really important. So no, the reality is how people were getting compensated for solar had already shifted dramatically in California. The part that was directionally correct was the encouragement of storage. Like, that was the part that to me does make a world of sense. How do we inspire more customers and how do we make the math work for more customers to have storage? So, thank you for that clarification.

You know, again, having run a utility, we would never have been the first utility to — we actually asked regulators if we could pay customers to go solar. And then we were the first to create a virtual power plant in Vermont with Tesla with their Powerwalls. And you know, we wouldn't have been doing that if A) we knew it wasn't great for customers and B) if it wasn't a path to actually lower the cost of the grid for all. So the math that utilities do is still — that was my other frustration with the California transition is if you read anything about it, which I'm sure most of this audience did, it was all based on a look back study.

And I must have said to, I don't know, hundreds of people, "When can we start looking forward? When can we start looking forward?" So, it was dated information. So, we had so much noise that was inaccurate. Like, one of the most profound was the notion that it's like wealthy people and it's being subsidized. Like, "Well, clearly you haven't been out talking to customers lately because like 50% of the customers we're talking to today are low to moderate income customers." Long-winded answer.

David Roberts

Let's talk VPPs. Everybody loves VPPs these days.

Mary Powell

Yeah, let's go, VPPs.

David Roberts

Just to start with, how many, like, give us a sense of the scale, the percentage of what you've sold that you currently have enrolled in a VPP, is it still a pretty small percentage of the deployed systems?

Mary Powell

Well, again, I'm so glad I came here because I got to have lunch with my team and oh my gosh, like, the scaling that this team has done in the last year is just incredible. I mean, I'm an impatient person that wishes that the whole energy system was way further along than we are. That said, it's quite remarkable now to be like tens of thousands of customers are participating in programs. We had 16,000 in our California program. And we see a path to really ramp that up dramatically. So, you know, we're above 20,000 and we are seeing a path to many more than that.

And now that we're attaching at such a significant rate, you know, we're sitting on top of 7.6 gigawatts of solar and 1.8 gigawatt-hours of storage already.

David Roberts

This is what you've already sold and installed on houses?

Mary Powell

Yes, this is what we've already sold and installed on houses. So, when you think about that, like from a, you know, and again, I call them as, you know, I like to call them distributed power plants. Because there's nothing virtual about them. They're there, they're distributed power plants. And they again can offset peakers. And the grid, as you know, 10% of the plants on the grid are there for 1% of the time. So, having these incredible assets behind the meter in homes, helping those homes and also helping the grid, is powerful.

David Roberts

So, if I'm a homeowner and I have Sunrun panels and a battery that I bought a couple of years ago, but I'm not currently enrolled in a VPP, do you come to me and ask me to enroll? Like, are you going back to existing customers and saying, "Hey, it's us again. Do you want to do this extra thing?"

Mary Powell

"Yeah, they're all nodding yes. Yeah. But yeah, we've actually moved — one of the exciting things this year that happened is we did move more to like an auto-enrollment. So again, you know, in California, the program that actually, it so happens my house was in. Right. You basically got a notice saying, "You're going to be included in this program and you can opt out. If you stay in this program, you get $700." I think one customer that I still want to talk to because I want to be like, "What's your deal? Like, what's your deal? Why didn't you want 700 bucks?"

You know, because it also, like, we also say, like, it won't affect the performance of your storage for your home or for the reliability.

David Roberts

And you haven't run into any, like, privacy, "I don't want you messing with my stuff" type of —

Mary Powell

That's probably why that one — or it might have been five customers. I don't know. It was, it was less than a handful. But, yeah, I think there are always going to be those folks that say, "Yeah, leave me alone." But for the most part, yeah, it works very elegantly.

David Roberts

And so when you think in terms of a DPP, are there multiple discrete DPPs, or do you just imagine sort of like deploying your entire installed base as a single entity?

Mary Powell

Well, I mean, you know, the way America's energy system is set up, it's not really conducive to dispatching your entire fleet all across the nation in different parts of the country at the exact same time. Right? Because what we really have is a patchwork quilt of utilities, regional operators, etc. But yes, the vision is very much directionally that. Again, we're now at a 56% installed rate of solar plus storage. We're moving rapidly.

David Roberts

Do you have a target rate? Is your target rate 100%?

Mary Powell

I mean, I'm a very practical person, so I think at the end of the day, I'm not sure that 100% you'll ever get. Like, I mean, and again, I've sold enough customers myself to know that, like, you're always going to get that customer that says, "Mary, I live right across the street from that substation and I've never had an outage in 20 years." And it's like, "Okay, whatever." Like, what I do say to them, though, is another area why storage is so important — so I don't think we're going to get to 100, but I think we're going to get a lot — because the other thing it can do, as we all know here, is future proof you against regulators who love complexity and utilities that love complexity.

And consumers, in my experience, don't love complexity. Like, your average consumer does not want to go home and think about their energy. Like, I know maybe in this audience you guys do; you're freaking outliers.

David Roberts

Weirdos.

Mary Powell

You're not your average American that I talk to every day. Your average American has maybe two jobs. They have a lot going on in their life. They don't want to think about it. They just want a beloved, trusted partner that they know is optimizing their home to make it the most affordable it can be, which a utility is not set up to do.

So, another area where storage is so powerful is that as regulators and utilities complicate everything and definitely rates, it can also really help them because it can, you know, again, using California as an example, you can shift energy around and you can just, you have that customer's back through all of that complexity. So, it gives me more and more arguments with the person that lives across the street from the substation.

David Roberts

Well, that was sort of my next question. Like, if I'm a customer who doesn't experience outages or doesn't really view them as a problem, if that's not a motivator for me, are there other reasons for me to get a battery? Like, is the value that you can pull out of my battery for your VPP, sharing some of that value with me, is that enough to induce me to get a battery in and of itself?

Mary Powell

Not yet, but that is 100% coming, in my view. So again, as a utility operator, yes, I was serving a customer base that wanted clean energy. I wanted clean energy. That was a part of why I leaned in so hard to distributed energy resources. But I would say equally as important was the fact that the grid is so economically inefficient. Equally as important is the fact that the grid is not built at all for the kind of climatic events we're having now. So, yes, I think there are many reasons that within three to five years, and then you see, AI is creating a lot of capacity demands.

Electrification is creating a lot of capacity demands. Utilities have not really inched forward in how to deal with those demands in an economically efficient way. Right. So, the grid is as economically inefficient as ever. It's like 40% economically efficient, which means it's inefficient. It's getting worse. So, what you're going to see is utilities — you know, again, we've scaled it. Now we're at like, at least tens of thousands of customers in these programs. I have no doubt in my mind that regulators will likely be pushing utilities to leverage resources like we have in a very dramatic way in the next three to five years.

And then, that will open up the ability for us. Like right now, at the sale process, we don't have sophisticated data and stability of programs to be able to say, "Hey, why don't you go? And then you're going to likely also get X hundreds of dollars every summer." Right. But as we are able to do that, that will absolutely open up the aperture of customers that will want storage and will put it in their homes. So, it's a very virtuous cycle.

David Roberts

So, the supply crunch pushes utilities towards DPPs, raises the value of DPPs, which raises the value that a customer can get out of a battery and brings more customers, is the theory.

Mary Powell

Yep.

David Roberts

Well, this is a question I've had about these DPPs for a long time, and I don't even know if I can articulate it particularly well. But once for the consumer, the primary source of value shifts from resilience against blackouts, which is like, I've always thought is, like, important in some places and some concentrated places. But it's not really like a universal thing. Like, I wouldn't pay that much money because we rarely have blackouts where I live. But once the value is coming from the DPP.

Mary Powell

Where do you live?

David Roberts

Seattle, we have very good hydro. But, like, once the value for the customer is coming primarily from their participation in this DPP, what is the remaining rationale for sizing the solar and battery to serve that building's load, as opposed to just maxing out by putting as much solar as it'll hold, putting as big a battery as it will tolerate?

Mary Powell

Have you been, like, spying on our meetings? So, first of all, yes, that's actually very much the direction we're moving. Because one of the things we find — you know, I used to say when I was at Green Mountain, I remember hitting this point where I said to the team, "Oh, my gosh, like, one of the biggest challenges we have is that Americans are in kilowatt denial." Like, they really are. Like, they don't — I would say, you know, 80%, 90% maybe of the high bill complaints we would get were not high bill. I mean, they were like, "Yeah, it's a problem."

Like, you're using a lot of energy. I'll never forget this one guy I had to deal with. Oh, my gosh, it turned out he had put a tropical fish pond in his backyard in Vermont. Like, literally, we changed his meter. We had done all this stuff because he was convinced it was our fault. And there was a tropical fish pond in the backyard. So it's a real thing, and we experienced it. Even I could tell some really fun stories. It's wild. Anyway, kilowatt denial, I love it. So, yes, we experienced the same thing. A lot of customers, they go solar and then they immediately start using more energy because they're feeling better about their energy.

It's the same thing I found with efficient light bulbs. Honestly, I don't know if you guys know this data. Same thing. People who put in efficient light bulbs, their bill usually goes up for a cycle or two because they feel so good, they leave them on all the time. So, we are very much trying to move towards future-proofing, future-proofing the customer's experience, future-proofing for the grid, and really moving more towards sizing and scaling to where we know and where we have the data that customers are moving versus where they are today. So, we see that as incredibly important.

Back to your point, though, on the value proposition of storage, I mean, it is remarkable to think that for 90% of the customers we're selling to right now, solar plus storage, in many cases, they're able to do that in a way that actually still saves them a little money. And in many, like, the vast majority of the cases, the worst case is it's a bill swap. So, I would say, like, it still is a very compelling value proposition because it's not just about, are you preventing yourself from having outages? It is about future-proofing at an equivalent cost to what you're already paying your utility.

David Roberts

Typically is the standard, just one Tesla powerwall per customer? Is there a standard battery installation or does it completely depend?

Mary Powell

It depends.

David Roberts

And do you push? Like why not two, why not three? Are you pushing?

Mary Powell

Right. Well, I mean, we want to meet the customer where they are. So, I talk about customer obsession all the time. I think ultimately, that drives the best outcome for any organization. So, we do go through the process of meeting them where they are and trying to figure out what works best for them. More and more, you are seeing customers that want whole home backup. So again, you live in a stable area. Most of California, I mean, I literally couldn't believe when I started living in California, the lack of reliability and the cost. And the lack of reliability, particularly with safety shutoffs, is just really profound in a lot of parts of the state.

New England, you have a lot of weather issues. Look at Florida, look at Texas. So, you're seeing more and more of that instability for customers across the country and that desire. So, it really ranges. It ranges. But yeah, anywhere from one to three, I would say.

David Roberts

When you think about a DPP, is there some ideal mix of generation and storage? Some ideal mix of solar and batteries? Do you want more batteries? More solar? Couldn't you theoretically do it with just batteries? Like what's, how do you think of the ideal mix for one of these things?

Mary Powell

So again, just real time. So, if you're just looking at it from the lens of customer obsession and providing the best value proposition for a customer, I'm going to say solar plus storage is the best solution. And then, I'm also going to say it's the best solution from a grid perspective. Because again, I've lived through multi-day outages in California. And you know, I was a Sunrun customer before I was Sunrun CEO, right? And I had solar plus storage plus EV charging and I actually had a SPAN panel, right? So not only could I go for literally probably weeks, but I also had the ability — like this is always where I sound like I feel like running a commercial. But like I feel like Crazy Eddie from New York years ago. I don't know if anybody remembers Crazy Eddie, but it's like all for one easy monthly payment. Like I had all of that —

David Roberts

No money down.

Mary Powell

No money down. No, no, seriously, no money down. One easy monthly payment that was more than paid for by my savings from my utility bill. And I had the ability, like with solar plus storage, like I didn't have to have the worry of, well, SDG&E said it's gonna be — well, they originally said it was gonna be 24 hours, then it was 48, then it was 72. And I didn't have to worry if it turned into a week because I had the ability also to monitor it and then also make the decision, "Okay, I'm not going to charge the car, but I am going to run this pump."

Like, that's the kind of amazing technological innovation we can do that improves the lives of customers, but then also becomes a really valuable grid asset. So, I think solar plus storage is still the killer app. It's better as a grid resource too. I'd rather, if I had to choose, I'd rather have both. But again, I want to be able to meet customers wherever they are. So, if there's a customer that has a totally shaded roof and nothing fits for solar, I'd love as a clean energy lifestyle company someday to be able to offer an amazing solution for them too.

David Roberts

Also, in terms of VPPs, you're using the customer's rooftop solar and their home battery. But the big powerhouse for most customers is their vehicle, the EV. The EV batteries are bigger than home batteries. And so, it seems to me like if you're competing in the DPP space, whoever gets to the cars first wins.

Mary Powell

Yeah, we got to the cars first.

David Roberts

I know you; I know you've done this.

Mary Powell

We got to stay there, but we got there first.

David Roberts

You've done this thing with, you know, three customers and their Ford trucks, which is not nothing but like, are you, is that part of the business plan to go after, like to be the one who does the charger so you can deploy the car as part of your DPP?

Mary Powell

Yeah, I mean, yes, you're right. It's a, it was a proof of concept, what we're doing. But our partnership with Ford on their F-150 was ahead of the pack, right on the bidirectional charger. Ultimately, again, what I see is most important is to be the one that actually owns the space around controlling the electric load of the home. So, if you have electric vehicles then, that are a part of that overall infrastructure, and you have the ability to work with the customer to coordinate all of that load in a way that works best for you, with rate structures, best for you, for your life, and then dispatch that.

So, yes, we're working very much in that space of being in that more sophisticated place of being able to control whole home and transportation load.

David Roberts

So, when you say "whole home," I mean, is there a limit to the devices that you could control? Like, you could see yourself eventually coordinating not just solar and batteries, but the water heater, the stove, and the —

Mary Powell

Yeah.

David Roberts

And the heat pump and everything you're going to —

Mary Powell

Yeah, I mean, that's one of the reasons why I was really pleased to have us — again, we're learning as we go — but we were one of the first to deploy SPAN panels because, again, there's multiple solutions, but that's one powerful solution that's available now that gives a more sophisticated customer experience and also provides you with more sophisticated capabilities of control if you work in partnership with those customers.

David Roberts

So, you were selling SPAN panels with your —

Mary Powell

Yeah, we're actually doing very well with them in Texas right now.

David Roberts

Texas. Everybody. This room loves Texas. It's the weirdest —

Mary Powell

Go Texas. Texas likes to go big, so let's hope they go big with DERs.

David Roberts

Well, so there's no limit to the number and variety of appliances and devices you can control. Is there a limit to the appliances and devices that you plan to sell? Like, would you sell a heat pump alongside the rooftop solar and the battery at some point? Would you sell a heat pump hot water heater? Like, do you have any limit to sort of like the home electrification products?

Mary Powell

Like, you know, we started talking about ourselves as a clean energy lifestyle company for a reason. So it was so much about not being your mother's solar company, but really transitioning into a company that was about providing a suite of clean energy technology products to improve your life, take advantage of electrification, and then turn all of that into an asset that works for you and works for the grid. So, everything is open. We're having lots of conversations about what that means and what that could look like, whether it's as simple as just simple partnerships where you're a Sunrun customer.

We just actually deployed something on our app the other day that was such a cool, momentum-building thing for storage. Just on our app, we rolled out a "push this button if you're interested in doing a storage retrofit." Because the vast majority of our customers still are solar only because of our legacy. And we literally had like just hundreds and hundreds of pings, right out of the gate. So as we think about our app experience and our future, and we think about providing more opportunities for engagement for customers, it could be something as simple as a partnership where you get a discount if you want to go with XYZ, and then it creates opportunity for us.

But it's, you know, our core right now is looking at how do we set up the generation capacity for the home and the transportation, and how do we set up the storage capacity for the home and ultimately transportation.

David Roberts

I guess this is sort of a variation on that question, maybe take it a little bit more abstract and get a little speculative with it. But you know, I, especially over the last year or two, see people coming at this space from all different directions. Like some people are just selling batteries or just selling heat pumps, some people are coordinating this appliance or that appliance or just thinking about vehicle to grid with the vehicle. And then there's a whole host of companies that are purporting, trying to make it easy for the customer to do whole home electrification.

Like, there are lots of different sizes and angles on this same market. And it just seems to me like — I don't know anything about business — but it seems —

Mary Powell

Well, then keep going.

David Roberts

It seems to me like this is a market that is crying out for some level of vertical integration. There's going to be some sort of Google or Tesla that comes along and you get the little branded heat pump and the branded solar panels. So, it's seamless. You know, you're sort of like one-stop shopping. There's one company. What level of vertical integration do you think is going to end up happening here? And are you going to try to be that?

Mary Powell

So, we see the world similarly. I mean, we do like, and I actually think the fact that we are vertically integrated, you know, we own sales, we own the operations, we have the technology, we have the product relationships, we have the depth of experience, we have the financing arm, I think it puts us in an enviable position for sure. And you know, to your point, I mean, even the pilot I did way back when in Vermont that Bill McKibben wrote about in The New Yorker. Right. It was for the exact same reason that you highlight. Like I was, I was saying the fact that we're coming at consumers from so many directions is actually confusing them and slowing down the energy transition.

Because I found consumers, even in little old green Vermont, right, that were paralyzed because they're like, "Ah, should I invest in efficiency? Should I do the weatherization? Should I do this?" So, they kind of froze and —

David Roberts

I'm a homeowner frozen in that exact position.

Mary Powell

Let me help you. Right, exactly. So, it's almost like their desire to want to make that next step was slowing them down because they had — so that's like literally what we did at the Borkowski's house in Rutland, Vermont. Right. We did like the full suite for what we were trying to get to was actually then when I stumbled upon Sunrun, I was like, "Oh my gosh, it's so much easier to do it at Sunrun." First of all, because we were a utility and nobody really wants a utility ultimately to do that because we're monopolies. But it was a proof of concept, right?

To show that really, what we needed to do was give the Borkowski's a transformation and have it be one easy monthly payment. I mean, that's what moves consumers. So, this is your suite of options. This is how you could do it. You could walk out of Best Buy with $149 a month or like $699 a month. Right? It's like, how do we bring that to the clean energy experience?

David Roberts

There is an argument to be made, I wouldn't make it, but it's there to be made, that if consumers are confused and what you need is a single trusted point of contact through which to do all of this, you could make the argument that the utility is exactly that entity and that utilities are either going to be in the way of all this or you put them in charge of it, let them rate base it, and then give them the incentive to do it. What's your take on that?

Mary Powell

Well, my take on that is, the first thing is like, they're not trusted. So, like, no, I mean, and honestly, like running a utility, the first thing I set about to do was to have us become trusted. Because we weren't. And we did go from like 50% customer satisfaction to 94% and 92% trust year over year over year. We were an outlier. Still an outlier. So, they're not. And then the other thing I would say is like, let's let the market work for customers. So, even with what we did, we were trying to do it in a way —

I think we were the first to create the BYOD, bring your own device, right? Because we were trying to do it in a way that encouraged innovation and new suppliers. So, the challenge was saying utilities should be in the position of providing new, cool suites, product suites of consumer technology. Like, first of all, it's going to take them through a three-year regulatory process and by the time they launch the product suite, two of the products are going to be outdated, I'll guarantee you. So, I feel like it's really built for the free market.

We want competition. I mean, I want competition at Sunrun. Like, we all up each other's game. That's the point of it, right? Is that everybody's trying to outdo each other in being that next better solution for customers. So, yeah, why would we not want that and want like a slow — like, utilities are built for slow and no. So it's like slow. No. By the time, even the Powerwall program that I originated in Vermont way back in what, 2016, I think they've just now scaled to maybe 4,000.

So, I think we need the ability for the market and innovators to work and for there to be a suite of consumer solutions.

David Roberts

Well, I can't argue with you because I agree with you. So, we're almost out of time. Final question. For my final question, I want to loop it all the way back to the first panel. So, there's all these data centers getting built. They need power. They say they need this very special kind of power that renewables can't provide. So, they need steady, reliable, dispatchable power. And so, they're building nuclear plants. What? Why? Why aren't they spending that money on DPPs? Why? Like, these are big distributed power plants that can provide always-on steady baseload power.

And, like everything else in the universe, they're cheaper than nuclear plants. So, what is the problem?

Mary Powell

Well, the other thing is, it's just like, oh, my word — like, I mean, I've built utility scale generation. It takes forever. Well, no, the thing is, it's also like, we'll all, like, the planet will be burned down by then. Like, I built Vermont's largest wind farm, which is not that large, by the way, because it is Vermont. And I had, like, massive support, massive community support. It still took like four years to build a tiny little wind farm. Okay, so, like, the thing that worries me is, like, even if I said, "Well, that is a good solution." Like, it's getting slower, not faster.

Like, we went from NIMBY to BANANA: Build Absolutely Nothing Anywhere Near Anyone. Like, that's, we don't —

David Roberts

I learned a new term at a conference last week. It was a conference full of, like, ski towns, western resort towns, NIMSBY: Not In My Second Backyard.

Mary Powell

Okay, there you go. That's why I think it's BANANA. I think it's BANANA. But back to your question. Like, we're under NDAs, so I can't talk about them specifically, but we are talking to data center players and there's a couple of different, really cool models that we're looking at. One is about leveraging existing communities where we already are, like, duh, like. Right. So, if you're going to put a center in the midst of where we already have amazing resources, and the other is a more bespoke model where we could actually work creatively with a utility which does like — you know, we need those regulators.

How many regulators are there here? Raise your hands. I love you. Go change the world. Like, please. We need you desperately. Like, the system is built because we need you to force them. Like, that's the system. So anyway, one that could be very, very powerful is more along the lines of what you're talking about, which is like, how do we go to consumers together and say, "Here, if we do this kind of distributed power plant, we can support this kind of economic development, we can have these data centers."

It's a just, radical collaboration that has incredible benefits for everyone.

David Roberts

And cheaper and faster —

Mary Powell

Yeah.

David Roberts

than restarting a giant nuclear plant. Do you, are the tech bros open to this? Because I feel like something, some of these guys, I feel like what they love about nuclear power is it feels virile.

Mary Powell

Yeah.

David Roberts

You know, whereas like virtual.

Mary Powell

Well, that's it. There you go with that virtual word. That's why I've never liked it.

David Roberts

Not quite manly. It doesn't have hair on its chest. Are you running into any — ?

Mary Powell

I got a lot of hair on my chest. I'm ready to take them on.

David Roberts

You would think, of anyone, you know, speaking of Camus Energy earlier, you would think if anyone would understand the cumulative power of distributed operations, it would be these tech companies that have built their fortunes on distributed computing. Right? So, how did the reception go?

Mary Powell

I think it's just the force of a hundred-plus-year-old way of thinking about things. That's why I always say, you know, I am a big fan of "culture eats strategy". Any company I've worked at or am leading, I focus a lot on the culture because that's how we ended up getting to the innovation at Green Mountain. It's because I started on the culture and, you know, we have a 100-plus-year-old culture and way of thinking about it. And so, as I like to say, it's not their fault, they just need to change.

Like, and that's why we need enlightened regulators, and that's why we need enlightened governmental leaders, and that's why we need enlightened folks to push against the force of a 100 plus year old way of thinking about things.

David Roberts

All right, well said. Thank you so much. Thank you, Mary.

Mary Powell

Right. Awesome.

David Roberts

Thank all of you.

Mary Powell

Thanks.

David Roberts

Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.