FREEING ENERGY

Podcast 075: Nico Johnson: What’s the connection between Tequila and Freeing Energy?

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Listen in as the renowned clean tech leader and host of the top clean energy podcast Sun Cast, Nico Johnson, shares outtakes from two days of in-depth discussions with Freeing Energy author Bill Nussey.  Johnson teases out major themes and insights from Nussey in this wide ranging discussion, distilled down into one fascinating interview for Freeing Energy Podcast followers. Plus, Nico shares his own top takeaways along with a surprising story of his journey into the world of tequila and how it relates to Freeing Energy.

Here are some of the highlights from their discussion…

“… I’ve genuinely found no better resource… for approaching this sector and gaining fluency in the vernacular, the underlying concepts and the impact on our culture than the Freeing Energy Project and the book.”


“So if you’re thinking through the lens of how do I start a business or find a career in this transition, this is in [Freeing Energy]… it’s a manual, it’s a manuscript from the future. [The book] says here, follow me, cause Bill has really done a lot of the hard, heavy lifting…”


“…If you don’t have an uncle Ken telling you, you might be doing something wrong or asking, have you thought this through, then you probably aren’t looking at a problem that’s hard enough to solve.”


You can also listen to this podcast and others in our series on these platforms:

Listen on Apple Podcasts
Listen on Spotify
Listen on Google Podcasts

Additional Information

SunCast Media – Episodes 421 and 422: Freeing Energy, Bill Nussey’s Roadmap For The Clean Energy Transition
The Freeing Energy book
For more information about the Freeing Energy book check out our website. You can order it on Amazon today!

Transcript

Sam Easterby:
What’s the connection between tequila and freeing energy.

Nico Johnson:
And he wanted to really figure out how as a technologist and even as a venture capitalist, he could understand where the greatest opportunities were and where the money might be deployed. And if there are a way that he could shine a, a spotlight for folks to really wrap their head around it. And I think that he did really well on that in freeing

Sam Easterby:
Energy, listen, in as renowned clean tech leader and host of the top clean energy podcast, Suncast Nico Johnson shares outtakes from two days of in depth discussions with freeing energy author, bill nusy Johnson, teases out major themes and insights from nusy in this wide ranging discussion distilled down into one fascinating interview for freeing energy podcast followers. Plus Nico shares his own top takeaways along with a surprising story of his journey into the world of Taka Hila and how it relates to freeing energy,

Sam Easterby:
Hello and happy new year, welcome to 2022 and the freeing energy podcast where the local energy revolution is unfolding right before your ears with each and every episode. We really appreciate you taking the time to join us. I’m Sam Easterby and I’ll be your host today. Now, if you follow clean tech podcasting, you’re in the right spot today, so do not adjust your dial. The voice you hear today is one heard around the world, and it’s the voice that’s heard as the host of the most popular podcast on solar energy and clean tech in the world with well over 400 episodes and counting and no telling how many downloads they’ve got. But, uh, our guest today is Nico Johnson, 15 years, solar veteran, clean energy investor advisor, and executive coach. And of course the host of the, a world famous Suncast podcast, Nico, welcome to the free energy podcast.

Nico Johnson:
Sam it’s truly an honor and a pleasure. And, uh, I can’t tell you how long I’ve looked forward to having an intro like that on the free and energy podcast of which I am a huge fan.

Sam Easterby:
Well, we are certainly glad to have you as a, a guest and as a listener. Uh, now I’ve been working with bill Nussy, uh, for some years now and, uh, but I’ve never had a chance to sit down with him for two days to talk about, uh, freeing energy, the freeing energy world, the freeing energy book, but recently you caught up with bill and like I said, you spent literally two days with him really going deep into the freeing energy book, as well as, uh, into bill S’s background. What was that journey like? And what did you take away from those two days?

Nico Johnson:
I got a chance for the better part of 48 hours to really soak, uh, time with bill. I made him dinner and, uh, we just hung out by the campfire and he told me countless stories, uh, many of which will probably never make it onto any public, uh, channel. And the purpose was for me to hear the backstory reason that the freeing energy project needed to live, which is a lot of what I do on sun gas. And what folks tuning in today are gonna get to hear is a one hour version of what was a three hour conversation that we actually recorded. We condensed it down to two hours. So if you can’t get enough on this one hour, then the two hour version is over on the Suncast feed. I’d love it. If you guys go over and listen to that there, cuz it’s truly a bunch of stories that we just couldn’t fit into. The one hour version and Sam, I came away with a handful of understanding about how folks might be thinking about building a business or a career in clean energy, which is what we really focus on at Suncast. The first was this idea that everybody’s got uncle Ken in their life. And as you listen to this interview, that will become, that’ll become apparent to you. Um, his uncle Ken served a really important role

Sam Easterby:
When he asked seriously, bill, if you thought this through a and I would argue as someone who’s made a living and a life out of trying to unlock the patterns behind entrepreneurship with regard to the clean tech, the clean energy transition. If you don’t have an uncle, Ken telling you, you might be doing something wrong or asking, have you thought this through, then you probably aren’t looking at a problem that’s hard enough to solve. And, and that cuz that’s really where I learned that bill has spent his entire career is at that intersection where folks find problems too hard to solve. And he finds technology that can unlock the pathway. And the story about him siding that clean energy in particular, the energy sector a hundred year plus, uh, sort of dinosaur was about to be disrupted. And he wanted to really figure out how as a technologist and even as a venture capitalist, he could understand where the greatest opportunities were and where the money might be deployed.

Sam Easterby:
And if there are a way that he could shine a, a spotlight for folks to really wrap their head around it. And I think that he did really well on that in freeing energy, I’ve had a chance to read the book I think you have as well. And it’s a, it’s a great story. It’s one that, uh, lots of people need to take it a little deeper dive into. And if you don’t have a chance to, to jump into the book itself, listening to Nico’s interview with bill, I think is a great start, uh, for understanding some of the key things that, uh, bill, uh, exposes in the book and brings, brings to life through the stories that he tells. Were there any, any other particular aspects about the book that really stood out to you?

Nico Johnson:
Yeah. You know, one thing I ask by way of helping you short circuit, which chapters to look at is I ask him depending on where I’m at in my journey, along the clean energy sort of understanding what is gonna benefit me. And, and he goes into detail there for, for what kind of where you’re at in life. Um, a fun fact that sort of blew me away. A couple of things that blew me away. The first is, uh, bill highlights a statistic that I was totally unaware of that the industry that is the third largest federal lobby, which is utility, is the single lowest for R and D spend. That’s the electrical utility. It spend less than one 10th of their budget annually on research and development. IE, there is no technological evolution coming time. Soon for electric utilities. It’s not in their budget, it’s not in their interest yet.

Nico Johnson:
They lobby for federal subsidies as one of the truly big industries. And I wanna tell you something about where the current incumbent is that we really are seeing a disruption around, you know, and I think bill does a great job of navigating that this isn’t an us versus them. Conversation is just traditional disruption at its best. And, uh, he brings in some Clayton Christensen, um, one of my favorite authors as well, uh, in terms of how to really properly think about it. The thing in the book that surprised me the most and he hints at it on the cover from the outside end was this idea that even charging electric vehicle charging truly is a Trojan horse. And I’d love for folks to just, um, get a chance in the interview to unpack it. I wanna unpack it here, but how EV charging is a Trojan horse for what we need to see happening at scale around regulation.

Nico Johnson:
So that distributed, renewable power in particular, solar can proliferate at, at a, at a rate and a scale we haven’t seen yet. Um, the other, and this is in chapter one, I immediately identified wow, the scale of what we’re talking about. I don’t think people have yet wrapped their heads around in from 56 to 95, 19 and 56, 19 95 in the us, we invested around 450 billion in the us highway system. If you fast forward to right now, Goldman Sachs predicts that the energy transition alone is a 16 trillion industry and current energy secretary Grano says that it by 2030, it’s a $23 trillion expense, uh, or investment, depending on how you look at it. And a few other things that you’re gonna get out of this interview that, uh, if, as though those aren’t interesting enough is this idea of a no inventory business, how will it thrive? What will it look like?

Nico Johnson:
Where is there gonna be outsized growth from a technologist’s perspective? And bill does a healthy job of making some, uh, hypotheses, some very educated guesses on where the industry is going and where the disruption is likely to occur. And, and along with that, as an entrepreneur, thinking about what’s currently being under served. So if you’re thinking through the, a lens of how do I start a business or find a career in this transition, this is in, for me, it’s a manual, it’s a manuscript from the future. that says here, follow me, cuz bill has really done a lot of the hard, heavy lifting

Sam Easterby:
Nico, what a great, uh, great background in terms of the, of the time that you spent with bill. So let’s jump right into the interview. Here is Nico Johnson and bill NSY discussing freeing energy

Nico Johnson:
By all accounts, including your own, you have no energy industry experience and you’re not a journalist.

Bill Nussey:
Definitely not, not an academic.

Nico Johnson:
Nope. What gave you the confidence that you could write a book in an industry that you’ve never been a part of?

Bill Nussey:
Well, it’s actually kind of the reverse. Mm. How do you get to know an industry? You know, nothing about, mm and, uh, roll back to 2016. One of my close friends, Mike calls me late at night, uh, 8:00 PM. I was sure it was some of, one of our mutual friends was sick or something. And he, I figured out what you need to do. I said, okay, what do I need to do? And he says, you’ve been talking about this energy stuff. And I was at IBM at the time. Mm. And he said, we’re getting tired of hearing about it. And it’s time for you to do something. I said, that’s the problem. I, I’m not sure what to do. He says, well, that’s why I’m calling you. He said, when you started at silver pop, which was a marketing tech company, I sold IBM.

Bill Nussey:
He said, you knew all about marketing. I said, no, you know, I didn’t, I, I didn’t know anything about it. And he goes, remind me how you learned. And I said, I wrote a book. Mm. And he said, that’s why I’m calling you with an expletive. And it was the biggest idea I’d ever had in my life. And I felt like my brain was literally at 110 degrees. And I ended up leaving IBM giving my notice 36 hours later. It was probably the most. I stayed for three months to wind out wow. All the projects we were working on. But it was the biggest idea I ever had. And the beauty of it is that you can call up the smartest people in the world and ask them the dumbest questions. Yeah. And build a network all at the same time. And it has worked wonderfully.

Bill Nussey:
It’s one of the ways I met you and I have met, I’ve interviewed 320 people on six continents. I’ve climbed to the top of wind turbine ladder, straight up 300 feet. I’ve sat in the headquarter offices of JCO and other solar companies that have been to factories, mud huts in Africa. It has been the adventure of a lifetime. And I’m so grateful that Mike gave me that idea. And then of course, once the idea was out, a lot of my other close friends and family, like, you gotta do this. Okay. I’ll spend a year write a book. I

Nico Johnson:
Love it. That was four years ago. Four and a half years ago. Yeah. You are. We call in the book. You said that there was a moment where quote, it all clicked. And I think that several listening will maybe identify with that. But the, the majority of us have heard folks say, yeah, it clicked. And, and maybe we have no context around what that looks or feels or sounds like at the time you were one of the top 100 executives at IBM, silver pop had been acquired. You had no lack of opportunity to grow. No lack of, of income. You had a successful exit from previous, uh, companies. What it, what clicked, what did you feel in that moment that compelled you now, now is the time for me to move beyond this fantastic opportunity I’ve got here at IBM and try something new. Again,

Bill Nussey:
There was really two big, maybe three big moments. The first was we were sitting around a table like this with IBM executives. I, and we had all the phones and the press people and the wall street journal and New York times, and everybody, the financial times were all running about how my company had been acquired. Yeah. It was a wonderful moment. And I was so overwhelmed. I thought I wanna remember this. So I stepped out when there was a break and I sat in a small conference room myself, and about 10 or 15 seconds. I’m like, holy cow, look, I just made a ton of money. Yeah. And I’m gonna be well respected because I sold IBM and I’m gonna be working at IBM for a while. And then it hit me that I don’t know from where it just hit me like a lightning ball, but there are all these people I’ve read about and met who have devoted their lives to a cause.

Bill Nussey:
And these people don’t have the financial resources or the network or the comfort or the experience that I do. And yet they’re devoted themselves to it. How could I do any less? And that was really the first thing that set me off on a journey that staying directly in tech, as I had done for 25 years previously, was their way to go. And that was some of the things along the way. And then the last one was when I was at IBM and we were looking at all the industries where IBM might use, I O T had a team of folks working on it. And we looked at every imaginable industry, but, and they were just going by the teams were writing things up and there was this one electricity. And I, I, I, a million years ago, I got electrical engineering degree. Let, let me look at that.

Bill Nussey:
I’m curious where that’s going. And we were shocked. We were all shocked. How T digitized electricity is it’s the whole electric grid is we all depend on this powering what we doing here, actually, we’re powered by solar right now, but generally powered by the grid. It’s just a gigantic single analog circuit. It, I couldn’t believe it. So at first I was like, this is a huge opportunity for digitization mm-hmm and I caught my interest, but then I got more and more interest. And there’s this thing called solar. I don’t know if you’ve heard of it, but it’s this thing where you can take those sun and turn a dry, I cleaned into electricity. And when I was, and, and there was these trends where it’s getting cheaper and cheaper, like every other technology I’d ever seen. And I thought to myself, there’s a really good chance that solars could become the least expensive way to generate electricity in human history. Yeah. And I said, now that’s interesting because if that happens, this isn’t just a digitization story. This is an apps, the loo disruption, and sure enough it’s already happened. But that was what triggered me into clean energy was this is gonna be a disruption, just like we saw with personal computing. We saw with digital marketing, we saw with mobile phones, technology is gonna disrupt the industry. And I had to be part of it. Yeah.

Nico Johnson:
How given the incredible breadth of history of the end energy sector, how do you distill the specific framework and steps that you’re gonna utilize to come up to speak quickly on an industry and learn where there are opportunities? Can you talk to me a bit about how you thought about that and how that ultimately informed of the structure of the book?

Bill Nussey:
That’s a great question, man. And while I was at Greylock, which is a venture firm, I worked at for a while, I looked at 3000 business plans, literally and met hundreds of entrepreneurs. And one of the skills that helps in venture capital is to be able to assess the structure and opportunities and risks within an industry or a segment that you aren’t familiar with. And how do you do that? And so having spent years there, I had a little muscle memory on how to go after it. But in general, the question is the question that all strategists, corporate strategists, the McKinseys of the world, the it’s the, how do you take a complex and infinitely, flex, nuanced situation and break it into pieces that are bite size and can be actioned. And you do that through a, I think a heuristic process, if you don’t mind my using that word.

Bill Nussey:
Yeah. But it’s both, you feel your way through it, right? It’s a bit, it’s more art and science and you talk to people, you try to get the most credible people as you can find. And some people who are brilliant will give you their perspectives, but it doesn’t make sense to you. And some, someone who may not be as demonstrably brilliant, but they can explain it to you in a way that makes sense to you. You start to form this model. Yeah. And then sometimes there’s a hole in the model. So how can I learn that? And, and I can read, but the really wild part about the book is I, I haven’t really thought about it until you asked the question. There were weeks where I lived in spreadsheets. I lived in the E I database. I have pulled down million tens, hundreds of millions of data points and analyze them with statistical Ana analysis, packages and spreadsheets have a massive database that I created for all the, the data that was relevant to local energy from the EIA and IEA and others.

Bill Nussey:
And then the other time I’m talking to people and then the other time I’m researching science papers and trying to see what this word means. Cause I don’t know what it means. Someone once said of me that they thought my superpower was curiosity. And I’ve always reflected on that. And I think I just really went where my curiosity took me, but I’ll, I’ll wrap up the answer with something that my wife would be nodding vigorously for that the problem with the curiosity driven approach is it has to be contained with the reality of what are you with it. So I chase down a lot of there’s versions of my book out there that are really even another 50,000 words longer. Yeah. And they’re just sitting on the cutting room floor cause they were too broad. And so in the last two years, I had to really narrow the topic down to what it is now, which is a book for innovators for how to navigate the clean energy industry and the transition. I

Nico Johnson:
Wanna spend a lot of time I’m here in what your vision for the journey the reader goes through is and who the op ideal reader is with the key concepts. Are they gonna unpack, but let’s start with who you believe ultimately should read the book,

Bill Nussey:
Man. That was a big part of the journey because as yeah, as the book was very early, people were saying, who are you writing it for? Yeah. And that was both a practical tactical question. Who’s your audience. Yeah. And was also an emotional question because as a writer, I can’t even think of myself as a writer, but as a person who was writing, I was trying to picture, who’s gonna read it. And that changed over the time. And it was about a year and a half ago COVID was getting underway. And I had a lot of time where I could focus that I wouldn’t normally have had, it became really clear. And so the dedication to the book, and it’s mentioned several times within the book is that this is for the thousands and thousands of innovators who have not yet joined this industry, but we expertly need you yeah.

Bill Nussey:
To join this. One of the most important movements in human history. Yeah. And the good news that book tries to get across is that you can do so much more than the important things you’re doing, like voting and advocating and writing letters. Yeah. Because today that’s the only knob that people think they can turn to affect the transition away from fossil fuels the entire book’s about things that you can do, not necessarily as an individual, but as an innovator is somebody who wants to be the first person in their neighborhood to have solar mm-hmm is somebody who wants to teach a class or write a letter to a legislator that, that may have a perspective that legislator hasn’t heard before. But there’s also things like building companies in investing or joining a company, joining us a nonprofit advocacy group. This is now the time for individual actions to start taking place. And two years ago it was too early. Now is the time. And that’s what the book’s about. And it’s written for all those people that are thinking mm-hmm can I do something and how would I do it? Yeah.

Nico Johnson:
Thank you. I, I think that by and large, we have two categories of people, those who are thinking about getting in the industry and those who are already in industry, usually mid to senior level folks that are trying to conceptualize what it looks like for them to move up or move out and start their own business entrepreneurs, entrepreneurs. And I have a heart for folks in the oil and gas industry and for folks in the tech industry who for the most part, well, meaning have entered into career year that is either a dead end emotionally or morally or financially because the industry is gonna lose their base. And the fossil fuel industry just won’t have investment from the, their previous investment base. And they’re nonetheless talented and well meaning and, and intelligent with those folks in mind. And some of them are employee minded and some of them are entrepreneur mind. I think that a lot of them are finding our show, cuz they’re entrepreneur mind, if you could recommend, I don’t know, maybe three chapters of the book for those folks. And they’re just skimmers. Where would you contextually want folks to spend time in the book? And then I want to get into our audience. What chapters you think are gonna resonate for the Suncast audience?

Bill Nussey:
I think someone coming from the traditional energy industry, mm-hmm many that I have had the privilege of meeting are still set in a world view that is just outdated. Yeah. And so there’s a couple chapters in the book technologies to fuels and then the battle for public opinion. Mm-hmm and I have seen some jaws drop when people, even people in our industry mm-hmm, read it about, first of all, the solar is so far and above the best source of energy. And so any first principles, ways it’s completely different than wind. It’s completely different than biomass. And it’s certainly different than fossil fuels. And one of my favorite stats for example, is that there’s in the month, this month that we’re recording this, there will be more sunshine hitting the earth in terms of energy than mm-hmm, all the reserves of all the fossil fuels and all the uranium.

Bill Nussey:
Yeah. So in one month the sun is gonna generate more energy at a know, a bazillion miles away and hitting the earth. This earth will have more energy and all reserves put together. So the degree to which that’s available, inspires people to realize that while we, Hey, there’s probably a role for biomass. There’s definitely a role for wind, but solar is in a unique position amongst all their energy sources. And by the way, it’s the only one that gonna be continuing to plummet in cost, continuing to plummet. So it’s not just bigger and better. It’s also gonna be half and soon a quarter of the cost of any other way to generate electricity. So that would be the folks who come from a worldview that they want to have it challenged mm-hmm , but people that have accepted that, Hey, solar’s the, the, the runaway trained it it’s working.

Bill Nussey:
It’s the best bet I would say. How, how do you apply that is there’s other chapters in the book, the chapters on patterns of innovation. If you’re a strategic thinker like me and you wanna understand the first principles, but the part that I think most people who are thinking, what’s my entry point, the chapter on billion dollar disruptions. Yeah. And if you really know the industry, there won’t be too many surprises there, but hopefully there’ll be some surprises about why and what like, like why, what role will hydrogen play and why? And also there’s a lot of people, particularly earlier in their careers that are really trying to connect our hearts with their jobs. And so one area where clean energy plays a role that we don’t you and I don’t think about every day, but for outside the us and low income parts of the world and Jim Rogers actually, who you mentioned a moment ago, really put my head in art around this.

Bill Nussey:
He was devoted to this in the final years of his life is, has a book called lighting Africa. And, uh, I subsequently went there a few times. And so also in the chapter on disruptions is how small scale energy systems are disrupting the almost non-existent grids in the poorer parts of the world. Yeah. And for some people that’s actually the most motivating thing to do. Yeah. Yeah. It’s actually freeing in many profound ways. The main reason I use freeing by the way has, there’s lots of, I play with it in the book. Mm. But the main thing for me is freeing it from, uh, 100 year old monopoly laws. Yeah. And we, by the way, we need monopolies, we need utilities. I wanna be absolutely clear that. Yeah. Not only do they have a role, but we need them to survive and thrive through the transition.

Bill Nussey:
That’s inevitably gonna happen to the industry and to them. But the laws are so over the top locked down monopolies. Yeah. That it just doesn’t allow for anything remotely like competition and you, people will point to California. Listen, we opened up competition in California. Enron came in it wrecked, California. The state almost went bankrupt and that’s the pro that was zero to 50. Right. So it’s no competition. Tons of competition. Yeah. I, I, I say to people that, uh, when you, when they talk about that kind of competition, it’s saying you, you to get in shape. And so your answer was okay, why don’t I get a complete heart lung and spleen transplant? And let’s see if that helps. So that’s what they did, right? Say Nico, just eat better exercise a little more. You can do these small things that are obvious without changing the entire competitive landscape of the industry that are safer and more incremental. But unfortunately it requires substantial mindset changes. And that’s one of the reasons I wrote the book so that people could realize that this is survivable. It’s amazing business opportunity, including for the incumbents. But I suspect the incumbents will not be the biggest winners just because that’s the bitter pill of being an incumbent. Yeah.

Nico Johnson:
Bill, you know, I’d love to hear your opinion. What do you believe are the two big breakthroughs that made the current electric grid

Bill Nussey:
Possible? The most important invention Edison gifted the world with was the idea of a centralized grid, sharing resources like a, in that case, a coal generator, right. And lighting up a whole square mile of Manhattan. Mm-hmm with one switch of a large coal generator and it fundamentally changed the economics of electricity. Yeah. Fundamentally, previously only people that had electricity. Well like JP Morgan, he had his own coal plant in his own house. And so Edison just, and what the really key point that people miss about innovation. And then I talk about this a lot in the book is that it wasn’t that he invented white bulb. It wasn’t, he didn’t invent nearly anything that made the grid work. He pulled it all together. Right. And I love to, and I love to point to Tesla’s model S Elon Musk’s contemporary company. There wasn’t a single part in a model S that you, the BMW and Ford didn’t have access to.

Bill Nussey:
Yeah. He didn’t invent some warp engine that no one else had. He just took all the existing parts and put them together in a way in his teams that no one had ever done and created arguably the best car ever made and Edison did the same thing. He put together parts of a were available to everybody and he put them together in a second, in a better way than anyone had ever thought about. And so there’s too much focus on the latest science breakthrough and the latest gizmo that’s gonna do something. And the people that will win in this coming decade or two are the people that take the existing parts and put them together in really creative ways. Right. And so that was the, for first big thing that made the grid possible. And the second one, which gets almost no credit was the invention of the regulated monopoly.

Bill Nussey:
Right? And it’s, it is so unique in the annals of business history and its success for going on a hundred years, unchallenged in any way, this Testament to the brilliance of the design, although with things like solar and batteries, it’s wildly outdated, but without a regulated monopoly, it’s highly unlikely that the United States and most of the developed world would have electricity at the affordability and safety that we’d take for granted. And that invention changed the world. And he doesn’t get a lot of credit for it. In fact, in many ans he is a bad guy in the history of electricity. Yeah. And I had never heard of him. I was at dinner with Jim Rogers and he says, have you ever heard of Sam Insel? And I said, no. He said, this is the guy you need to study. This is the guy that no one pays attention to. And we are all here because of him. And some people consider him, he heroes, some people consider ma villain, whatever you consider him to be. We wouldn’t be here without him. And his story is so fascinating and go forward, whatever he created has survived the test of time, but it needs to be changed now. And I think he would vociferously agree by the way, I hate to put myself in his incredible shoes, but believe he would say, listen, dudes, it’s time for at least some minor tweaks,

Nico Johnson:
The scale of investment for what many are referring to as climate tech. But we’ll look at like just clean energy and, and infrastructure around clean energy is unprecedented. You map out in the book from 19 56, 19 95 invested 550 billion in the us highway system. Can you give a quick timeline between that and energy secretary Grantham’s grand vision for the investment that we might see and clean energy from here to 2030.

Bill Nussey:
When I talk to people who are thinking about this industry, or they’re asking me, Hey man, why aren’t you doing crypto or AI or something that a software person like yourself should do? And the answer I always come back to is this is the one of, if not the biggest business opportunity in the history of humanity and Amry, Levis, who I quote throughout the book has a really wonderful Amery way of describing it. Mm-hmm , but it’s a once in a civilization, it’s a once in a species transition. And, and he said it many different ways, but all of them get it, the magnitude of this. And so many people are familiar with the wealth created and the change, the societal change that the broad tech industry, whether it’s the internet or mobile phones or Facebook or Amazon, all grouped together, all those companies over the last 25 years have taken in a total amount of venture invest at a trillion last 25 years.

Bill Nussey:
Wow. And so that’s an enormous amount of money. And when I tell people that the smallest estimate for the next 25 years in clean energy of investment is 15 trillion. And that the politicians actually decide to do something about, this is more likely to be 25 to 30 trillion in the next 25 years. It’s, there’s just no precedent. It’s orders of magnitude larger than anything we’ve ever tried to do as a species. And the great thing is because it’s so politicized and because it governments talk about it and they have giant cop conferences and all these things, which are critical, but people put it in the same bucket, climate investment, they put it in the same bucket is healthcare and childcare and education in the military mm-hmm , which are things where the government spends an enormous amount of money. And they hope to make a better country, a better society. And they hope in the decades or years and decades it follow that mm-hmm, higher educational create a higher benefit for citizens. And that’s. So when clean energy falls into that, it gets, it loses the most important point. This isn’t a make the country better. This is I’m gonna put in a dollar and we a dollar 20 back. This isn’t like anything else the government talks about

Nico Johnson:
Doing, yeah, this is something that actually was uncle Ken’s core argument, wasn’t it? Yes. He, he pointed to what many want to use as the whipping post of the clean tech industry Lyra and the $500 million loan guarantee, which I’m not just the government, but investors lost out on any, he quotes something. I I’ll use a different term for what you were just referring to in healthcare in education. It’s rightly characterize that as a handout because we want to lift people out of poverty. We want to improve their lives. Wanna provide a social, uh, safety net. Uh, we wanna improve their lives in a way that individually they can’t possibly do. And while I would argue, it’s worthwhile, like we did in the last a hundred years, invest in the personal safety net of having electricity in every home to make sure that we can reduce the number of, of deaths due to cold. Like we saw in Texas, this, this past winter, you characterize it in the book, as you just said, an investment, not a

Bill Nussey:
Handout as a direct economic return. And people talk about the SRA, which is part of the loan program office, which is now run by our friend jigger. Shaw. That fund is according to what I’ve read has returned more than the average low risk fund has returned to the government, to the citizens of the us. That fund was the reason Tesla survived in its early days. That fund is the sole reason that the Georgia is still building the nuclear power plant, cuz while they lost 500 million on SRA, the government did, I bet on the vog power plant is over 10 billion. Yeah. And knock on wood it’ll work out and be successful. Whereas the one it’s twin in South Carolina didn’t, it was shut down and cost 10 billion. But that fund has done a lot of things that aren’t just about solar. And aren’t just about handouts. It’s intended to have a return and I’m optimistic. That will be one of the many things the us, it does to push this industry forward. But these are not handouts. Uh, some things are, but for the most part, these are investments that return direct financial dividends to the us, uh, us citizens,

Sam Easterby:
Nico, you know, it’s always nice to hear, uh, from, uh, directly from, from the author, but it’s also nice to hear from other people and what they think about the work that, uh, particularly in this case, that bill has, has done. And here’s one review that we’d like to share with our listeners, the previous division president at general electric Tracy Moore had this to say about freeing energy.

Speaker 4:
Freeing energy is a fantastic read for electric grid, newbies and veterans alike. There’s a massive shift going on in the electric grid and the world’s transition to clean energy, not because of climate, but because clean energy is now less expensive. Freeing energy provides a comprehensive explanation of what, why and how this is happening. Whether you simply wanna understand it or wanna play a role in shaping and accelerating it.

Nico Johnson:
You know, Tracy rightly points out that wherever you are on your journey, freeing energy is an apt companion to help you get from an concept to next steps.

Sam Easterby:
Now back to Nico and bill for more,

Nico Johnson:
I wish that we had the time to go through every chapter. The key concepts really center around a few things that I wanna make sure that we do cover local energy. The, that this is a co a qu a concept around technology is not a few yields. You talk about it kinda economies of volume. You go into something that I think would be really interesting for us to extract and talk very specifically about. I think it’s a model that you created called five orders. The, and then you mentioned not just the, what you call BL E OS big local energy opportunities, but specifically in chapters five and six, you go into with the five orders, how one can think about disruption and innovation. So let’s take a crack at the very first one. Your core thesis is that this is all really at its base about local energy. Can you help me understand what is local energy and why did, and how did you come to that as your main thesis for the book?

Bill Nussey:
There were two years and laying awake at night in that journey because as I got into the book a year into it, it became increasingly apparent that the power and entrench of the existing utilities and I interviewed in the first two years, I interviewed the CEO of Georgia power who impressed me. Yeah. And he had a great vision and I thought he was a F fine person. I was impressed with him and his acumen as a business person. But I could tell he had a world view that he wasn’t looking to embrace risky things that might make his business better because there’s hundred years of legislation in Georgia that says, don’t do that, don’t take risks. And so he was doing a wonderful job for the things he was being asked to do by his legislator and by his public utility commission. And I became despondent because I was like, how can you in innovate rapidly?

Bill Nussey:
How can you get venture investors to join an industry where it’s gonna take 20 years to get a return? And they have to spend two thirds of the money working with lobbyists and lawyers to get things through the regulatory process. And that’s when I stumbled into local energy. And I realized at first I was dismissive of rooftop solar because it’s it’s, it still is a fragmented, relatively inefficient industry. But what I realized was those people could move on any access they wanted. They could buy this solar panel. Yeah. Or they could do solar tiles, or they could buy a micro inverter or a, a string inverter, or they could create software. A Tesla makes power wall batteries that have gorgeous user phases. They could do anything. And all of a sudden there was a competitive market. And I started to see, and I, at that time it was the very beginnings power wall still hadn’t shipped, but I was starting to see, wasn’t just, here’s some stuff we would like to sell to you utility to a utility, but you can buy it too for your roof.

Bill Nussey:
It started, people started saying, this is commercial and industrial community scale solar. These are independent markets for where competition is actually happening. And then I got excited and then I realized that’s where the innovation is gonna come in. And then I realized that’s exactly what happened to computers. That’s exactly what happened to media. That’s exactly what happened to every other disruption. And if you read my favorite book in the world, innovators dilemma from Clayton Christensen, that the last two words in the title of my book from the outside end IBM and the other large companies were happily making their mainframes and selling ’em for what would be 10 or 20 million a day, and a bunch of hygiene, optional kids in garages in Silicon valley with greasy hair and soldering irons created what is today, the dominant model for computing. And we’re going to see those same kids in garages, making systems for homes and villages in Africa and schools in Puerto Rico. And that kind of innovation is getting unleashed as we speak Nico, that’s what’s happening now. And that’s what I’m excited about. That’s entirely what the book’s about. See, I got excited about it, cuz this is like my religion. I love it. I

Nico Johnson:
Love it. Bill along the lines of the abundance of energy available, there’s never before in history been a time where there were so many options to consumers and at such a scale and price, to your point, that power wall being at the higher end. There’s so many options for consumers. You use this term consumerization, when you discuss the rise of local energy, can you help me understand how that fits in the picture in terms of scale and accessibility of this power and this technology?

Bill Nussey:
When I was thinking of the term consumerization, which is a term I’ve heard through my career, I think back, back to this, we were looking for a house in Raleigh a million years ago when I was a kid and the realtor was driving us around and she had a little telephone with a handset in her car. This would’ve been in the eighties and maybe the late seventies and she could pick it up and she would talk to someone and say what number she wanted to dial. And this was mobile phones. Yeah. And only of very few people, then you remember the Gordon gecko that big gray phone, there was only a couple 10,000 of those made. And what happened ultimately was because of economies of volume because of mass production, microcomputers mobile phones, these all became widely available and affordable to everyone. And they also became easier and easier to use. Yeah. And so that concept of consumerization plays out and virtually every single technology market mm-hmm . And I think it’s gonna be a surprise to people. That’s gonna play out with solar and battery and local energy too. It they’re gonna wake up and say, wait a minute, how did this become so mainstream? But I would argue that consumerization makes that an inevitability. Mm.

Nico Johnson:
Bill, we’ve talked a little bit about in, in some cases I, I would say the utilities right now are fish out of, of water. They are gasping for breath. They’re trying to figure out where they fit in this new economy. You often refer to Clayton Christensen and the innovator’s dilemma, a quote from that book resonates, I think in this scenario. And I’d like to hear how you think it applies for the utility specifically. He says, the reason is that, and he’s pointing to the reason for failure. The reason is that good management itself was not the root cause. Managers played the game the way it was supposed to be played. The very decision making and resource allocation processes that are key to the success of established companies are the very processes that reject disruptive tech technologies, listening to customers, tracking competitors’ actions, carefully investing resources to design and build higher performance and higher quality products that yield greater profit. These are the reasons why great firms stumbled or failed when confronted with disruptive technological change.

Bill Nussey:
I found a quote and I put in the book and it basically said that it’s very hard to convince a man, uh, to change his mind about something when doing so takes money out of his wallet. And, and that is the heart of disruptions. People have economic incentives to continue doing what’s worked for them. And that’s why Clayton Christensen’s book is so profound because he mapped out why companies are incredibly successful with their customers who are doing a magnificent job of meeting their customers needs are also the most likely to be disrupted by outside forces. And I saw this at IBM when I worked there, these gigantic customers that are paying IBM tens of millions of dollars a year. And they love the fact, they get all, all the different products, hardware, software services, all from one company. And they come back to IBM year after year and saying, we like the breadth of things that you do.

Bill Nussey:
And we’re happy to pay a premium, to have one company to do it all. And that is IBM’s business. The problem is that those same customers in the future years are going to probably shift into things like cloud computing, like Amazon’s introduced, but day to day, they really love what IBM does. And this is what Clayton Christensen uncovered and shared, which is that if you do the thing that you’re supposed to do for your customers, listen to them and deliver what they want. You are likely to get disrupted. If you’re anywhere near technology business, cuz technologies will change. Outsiders will come in and they will offer something that you would almost have to put your herself out of business to compete with. And there’s all kinds of prescriptions in his book, but how to navigate that as an incumbent. Hmm. But that applies to industries from steam shovels to, uh, hard drives in his book.

Bill Nussey:
But every one of those industries had opportunities to be innovative in the end that the utilities do not because all of them were legally allowed to innovate if they chose to. Oh yeah. And they most chose not to, uh, which is why almost no steam shovel companies ended up being in the, the giants hydraulic bucket business. Right. But they could have, mm. In the utility industry, they are in many ways, legally bound to the bit business model and the incremental decisions they make today. So it’s not just that the utilities I, I, when I was writing this book, Nico, a lot of people I interviewed wanted to make the utilities to be the bad guys. And there are so many books where the utilities right, are painted as this obstructionist to the future. But if you sit down and look at it, I have a great fun interview in the book about a public utility commissioner named, uh, Bubba McDonald that I interviewed.

Bill Nussey:
And I’ve interviewed many others that didn’t make the book and they’re doing what the legislators are telling ’em to do. And they’re telling the utilities what to do. And even if you had a utility that wanted to be really innovative and take risk, they have to convince even more conservative, not politically conservative, but risk averse, utility regulators to, to follow along. And that’s a tough, so utilities have all kinds of reasons to continue on what they’ve been doing for a hundred years. Yeah. And a lot of resistance to change, which is why most of the change is gonna come from the outside in. And I think many utilities will finally see it and your regulators will see it and they’ll get on board, but many will fight it till the end. Yeah.

Nico Johnson:
That was amazing. Bill. I love that. As a creative leader, technologist, who’s seen a breadth of technological application that most of us would dream of. You’ve already been able to establish that you can and learn an industry by researching it well. And building based on first principles, frameworks of thinking that not only guide your own sense of direction when you approach that new industry, but have served and will serve others who are trying to find that direction. I find that with writers, such as yourself, there’s a trend or a tendency towards creating the spoke models that help to convey the narrative and also creating words that, uh, are helpful for folks to sort of attach to you used the word we’ve referred to a couple of times, Lyra here. And you used the clean apocalypse to kind of refer to the, the Lyra period, right?

Nico Johnson:
A few years where venture invested billions of dollars and observers effectively concluded at Cleantech. Wasn’t a fit for venture capital. Yet you saw more than 3000 deals at Greylock. You bought dozens of companies in your history as a CEO. And for those who read the book chapters five and six for me, kind of represent the distillation of that entrepreneurial mindset, help me understand the need for creating a new framework within which we can package the scale, the, and, and, and the roots and the, of this, of the growth of this industry. And you call them orders. So

Bill Nussey:
Early on, I reached out to a lot of venture capitalists through my network, having been in that industry who had focused on clean tech and the clean pocalypse was, this was in 2017 and it was still hanging their like a car wreck in, in the near right next to them. They felt they were pioneers, cuz everyone was telling them clean energy was a terrible idea. And why were they still doing it? Had me learn no lesson. I even had friends of mine from venture capital saying, dude, why are you doing clean energy? There’s so many things. If you want to be an investor or write about an industry, why clean energy clean pocalypse blew up. It’s not a good place for venture capital. And as I talked to some of the people who were actively investing in the industry, I found that there was a lack of clarity on how to think about the way that capital flows into these companies.

Bill Nussey:
And so I started thinking there, I looked everywhere. Who’s got a simple model to describe the, the myriad of ways that you can actually, the way the capital flows through different segments of the industry. So if you’re an installer, your capital flows are largely around labor and soft services. If you’re making solar cells in China of capital is entirely about building a huge factory and hoping in three to five years, the standards don’t change. So you can get your money back. I hadn’t seen anybody clarifying these differences. So I came up with, and this has been a professional strategist at IBM and worked briefly at McKinsey and did this at the company I ran called. IEL put some formal strategy to it. And I came up with this thing called the five orders, which to a person who’s a professional strategist, they’re gonna yawn and say, okay, sure, fine. But I’ve been really pleasantly surprised the number of people who have read this and say, that’s a really cool idea. And so it’s, I can just tell you what standard business strategy applied in the context of clean energy. Mm-hmm for the strategy people there it’s simply a value chain.

Nico Johnson:
I’m gonna pausey for a second because there are folks who here listening right now, who I want to make sure you’re running and you’re distracted pay attention. cause you also are an adjunct professor or a weekend professor at a university or you’re a college student and this is gonna benefit you greatly. So just pay attention right now

Bill Nussey:
In many industries, the value chain isn’t really clear, especially in the tech offers space, but it’s actually much more clear in clean energy, particularly at this point in time. And so the orders are basically the steps through the value chain and I, in my own mind, think of them as, as layers on a pyramid, although it’s layers on a, a, a vertical rectangle and just in brief, the, the first orders, when you make stuff it’s components Hmm. Solar cell, all batteries. Second order is when you, you tie them together, it’s integrations. And this is one that I wanted to really highlight. I highlighted earlier because people don’t give this a lot of credit. This is actually where I think the most exciting products are gonna come taking existing stuff off the shelf and putting it together like Tesla did with the model S Thomas Edison did with the grid. Yeah. We referred to it earlier,

Nico Johnson:
The second order, right.

Bill Nussey:
But then you have a product, but then if that product’s turned into a service that becomes a third order. So if you buy a home and you rent it out, that you’ve turned it into a third order business. So the grid is the one of the biggest third order businesses in the world. They put all these assets in, they integrate all these components and they sell it to us, a kilo, what hour at a time? That’s a third order. Now we, to the point, everything up to this point has been traditional asset, intensive capital intensive businesses, and this domain of loans and clever financing models and government policy effects, this kind of thing, tax equity. But when you start to get above, the third order is where venture capital is start to get really interested. Yeah. So the fourth order is in the world of software.

Bill Nussey:
And I think increasingly in every industry, the single best business to be is the platform. So I think the ultimate original platform is a flea market. Huh? You pay $20 to have a table on the weekend. And then you sell your, and sometimes you have to give them a percentage. Probably the most lucrative fourth order model is apples app store. Right. They do nothing other than approvals and they make a fortune. Yeah. And it’s being fought about in law, in courts right now about how much they can make. Yeah. But they just said, Hey, Steven jobs said, I guess we can let third party. People put stuff on this phone. And now it’s probably the most profitable thing. Apple does and they own the platform. And that is the role that utilities, it may take decades, but they’re gonna figure out, well, that’s an incredibly sexy place. We may not make as much revenue, but our profits are gonna be through the roof. We’re gonna be choreographing electrons. We’re gonna be electron marketplace.

Nico Johnson:
I think that utilities are going to start in 20, 22, looking at some of the companies that our friends are getting funded right now. Like Arcadia and think, wait a minute, that’s my business. That’s my

Bill Nussey:
Platform. And again, this is why I love business, Nico. This is why when everybody else wants to talk about sports and who got drafted and they wanna talk about politics. I love, love, love talking about business models. Yeah. Among my closest friends, their heads will spin. I wanna talk business models. I mean the similarities between and what the utilities will need to do compared to what at and T did, when they, they used to sell long distance minutes. That was their business. Right. Right. And it’s effectively cost zero today. So they moved to becoming a platform. And if you remember back in the old days of mobile phones, they had something called w decks. Yeah. Which is where these numbers and it was horrible. And they thought they were gonna control the content. And they couldn’t. It got outside of them. This ability to become the pull platform is artful and difficult, but there’s no better way to generate exciting growth. And this is what venture capitals

Nico Johnson:
Love we’ll stay in, in the telecom industry. Cuz I think it’s important for people to think about analogs, right? What is analogous to this? And just in the telecom industry, Comcast obviously, and at, and, but Verizon, a lot of folks don’t realize the number of businesses that are built, like boost mobile on Verizon’s yes. Network. And that Verizon gets effectively like a franchise fee from Verizon is a utility. There are telecom utility, right? Comcast is a utility. They’re an entertainment utility who are gonna be the utilities of a electrons moving forward. That’s what we’re discussing. That’s the disruption that’s

Bill Nussey:
Happening, man. I won’t even get started on this because this is my catnip. I love talking about this stuff because where Verizon has struggled, they weren’t really a platform. By my definition, they were just making their assets available as a service to third parties. But essentially what they were doing was a low margin. Yes. They rental business. And what you wanna be, they struggled and missed entirely. They wanted to be Netflix. Yeah, that

Nico Johnson:
Was, but they, but they turned into Hertz and they,

Bill Nussey:
Yeah. Beautiful. Exactly. You get it. Right. And, and they have tried with, uh, uh, various laws and campaigning and things like that to try to get more control over the stuff that goes through the platform. But ultimately the horses left the barn. They’re not gonna get it back. So then at and T buys HBO and they try to get into the side door and, um, but they’re not good at it. Uh, it’s not part of their culture. I watched that at IBM when we were really good at some things culturally and the whole company had the ethos of doing so things really well, but we tried to do new things like sales, software services, and they struggled with it because they had every bit of the company from how we do maintenance, how we recognize revenue, how we send salespeople, didn’t fit and Verizon and at, and T struggle to move to this new model.

Bill Nussey:
Yeah. And the utilities are going to have a struggle that’s going to make at and T look like a walk in a park because they have so much, they have so many assets, they have so much legislation and regulation for them to move to this fourth order platform, which they will eventually do, but it’s going to be very challenging. Yeah. And it’s gonna be fun watching those jurisdictions in the world where they lean into it. And they actually realize that choreographing electrons is Danny Kennedy. Yeah. Gave me that phrase. I love it. That’s where the big money’s gonna be. That’s where the big profits are gonna be. Yeah. And that’s where the venture capital is gonna go. Mm-hmm so the final, let me just finish the final. The final fifth order is one that’s it’s really, it’s a bit existential. I like to tell the story of Uber.

Bill Nussey:
So once upon a time there was an app store and on it was thousands of apps. And this, this company called Uber, puts an app, the thousandth, and first on the app store, and you could go there and you could call an Uber and it’s a platform. And so that was where the story could end. Yeah. But I have the statistics, numbers and stories in the book about how Uber didn’t just become a platform for car owners to monetize it, which was a phenomenal business, right. It actually leap into an entirely unrelated industry. And then it became a fifth auditor full on absolute disruption. And over the course of 10 years, we watched taxi trips go down and we watched Uber trips go up. But the Uber experience was so positive and accessible. Something taxis couldn’t do by the way, taxis were our regulated monopoly that the total number of ride shares that went up was it’s like four or five times higher than the taxi industry had ever achieved on its own. Yeah. That is a phenomenal example of disruptions. Yeah. And that’s exactly what we’re gonna see with local energy systems participating in the electricity industry.

Nico Johnson:
I’d say by any account, certainly uncle Ken would agree that you are convert and like many of us, uh, you a very optimistic view.

Bill Nussey:
What scares you? I wrote about it in the opening of chapter seven at the it’s called utilities versus the future. There was a shadowy group called Nera, the new England rate payers association. And they’ve never disclosed who funded them, but they went all the way to the, the national group that oversees the grid it’s called Fe. And they made a tremendous effort to convince Fe that net metering, which is the way that most people are compensated to make their solar work payback in a reasonable period of time. They wanted to basically nationalize that and in effect, remove the amount of money that consumers were paid for their excess solar and put it down to a very small number mm-hmm and had that passed it. Would’ve destroyed this growing local solar, and now Californias actually likely to do the same thing that the near advocates wanted to have happen, which is they’re going to slash the amount of money that consumers get paid for the excess solar. They put back in the grid, and this is something you and I could talk for two hours about. And it’s, it is the most naked yet not seen as such, but it’s the most naked sort of power grab by proponents of the incumbents that I’ve ever seen. And even that people who advocate for local solar don’t get

Nico Johnson:
It. Yeah, no, I’ve done three episodes on this. Yes.

Bill Nussey:
I’ve listened to several of them. They’re excellent. Yeah.

Nico Johnson:
Carl robo, who, who you and I both had on the show, I’m glad you brought this up and I’ve forgotten that you’d covered it in the book we first did with an episode with so United neighbors, cuz they were really staunch proponents to what was happening with Nera. And I would really encourage you all. There was a of resources and we’ll link to them, but get smart on what’s happening with the attack on net energy metering because it, it’s not explicitly the attack on net energy metering, but it’s an attack on our rights as citizens to have the choice that we’ve been given and to be able to disrupt the utility model, the incumbent deregulated or the, the incumbent regulated model. Right?

Bill Nussey:
Y yes. And there’s this argument again, I, I don’t want to go too deep on it and the we’ve covered so much, but there’s this argument that the utility industry and their supporters call cost shifting. Oh yes. And what it has effectively done. And I think I’ve got some pretty interesting takes that I’ve not heard or seen anywhere else that they have effectively pitted advocates for the poor against advocates for the environment. You basically have the utilities have their research reports, they’ve paid people to do. And I’m sure it’s well intentioned. I don’t think it’s malicious or false, but they have found the math and they generalize it so people can understand it. Say basically if I wealthy person put solar on my roof than my neighbor who isn’t wealthy, he or she has to pay for the grid. And therefore they’re paying more in that particularly acute for low income families. The argument, the punchline of it is rich. People have solar, poor people are paying for it. Yeah.

Nico Johnson:
Classic false

Bill Nussey:
Equivalence. Yeah. And the brilliance of this reminds me of the movie, the usual suspects. There’s so many great quotes in that movie. Oh yeah. But I think one of them, if I recall it is that the greatest trick the devil ever pulled was to convince people it didn’t exist. Yeah. And utilities are definitely not devils. They’re wonderful people. But that metaphor is that nowhere in the argument about cost shifting is the third party, which is utilities. Yeah, no one’s saying, gosh, we don’t really, even if cost shifting, which I argue is, and I’ve seen some brilliant work that says it doesn’t even exist. But even if we accept that it exists, it’s not a question of low income families and wealthy families. There’s a third party involved mm-hmm , which is called utilities. And so all these legislators and public utility commissioners in California are worried about harming low income people.

Bill Nussey:
Yeah. There’s not a single conversation. Gosh, what happens if we just reduce utility profits by half a percent? Could that fix everything? Right. That’s not a conversation anybody’s having mm-hmm and think if they get an I’m sure it’s been had in a rare conference rooms and things, and there’s some existential arguments you can make either way mm-hmm . But the fact that it’s a public people think this is either or wealthy people or poor people. Yeah. And no one’s saying what about super wealthy corporations that are guaranteed profits by the government. Maybe they should have some skin in the game. Yeah. And the funny thing is, if you look at the lost money in California or the United States from solar it’s half in 2019 of the money that the utilities lost because of E D light bulbs. Hmm. So the efficiency of L E D light bulbs is the us shifts over to those actually cost utilities about twice as much in lost revenue, right?

Bill Nussey:
As solar panels. Wow. But you don’t see utilities going to their public utility commissioners and the lobbyists and saying, you need to stop, uh, E D light bulbs. We don’t want them anymore because it’s cost shifting the people that put up E D light bulbs. They’re pushing all this cost onto people that can’t. And guess what, by the way, D light bulbs skew just the same and the low income high income as solar does low income company. I’ve seen the statistics I didn’t put in the book, but low income families tend to buy fewer L E D light bulbs proportionally because it’s a higher upfront cost. And, but no one talks about the L E D cost shifting issue. The other cost shifting issue is the cost to pull power miles and miles and maintain these power lines. Right. But in, in the dense city of Atlanta where I live or outside of that, cause very little to deliver power. So those people in Atlanta are basically subsidized and cost shifting. Yeah. At much, much higher level than solar panels. Wow. And so cost shifting happens all the time. This is not like the first time the utility industry is dealing with it. The reason that cost shifting and net metering matters so much is of all the things I just discussed of all the cost shift data, actually every day in the utility industry, local energy is the only one where the utilities are actually losing control. Yeah.

Nico Johnson:
I’ll make a, I’ll make a quick connection here to something you said earlier, which our friend Andy clump, and it’s an equivalent, and this is how I really believe going back to the original question. What scares you is that our industry large is under attack for all the reasons that we’ve outlined in the, this episode. And it, it, it brings to mind for me, a very present example, and we don’t have the breadth or scope right now to, to talk about it. But as by way of what scares us in the industry and how our industry is being attacked, we both did episodes with our friend ending club on our, on our podcasts about the w R O and how oddly the solar industry, which is a huge user of Silicon, is being attacked on the, the subject of forced labor among a few other things. And it’s getting caught up in this wro, but you don’t see fair treatment if it, as it were across other product categories that use the same substrate, they use the same product from the same places, from the same PolySci factories. And it’s a, I think it’s a great example of how the idea that the solar industry gets attacked for cost shifting, but home Depot doesn’t is a great example of Nera, just like unknown dark parties that are working their dollars against an industry that is going, going to massively

Bill Nussey:
Disrupt. And the part that’s so frustrating is if we ever did find out who’s funding Nera, there’s a very good likelihood it’s the utilities are through, it’s basically started with utilities. Yeah. And the, the electric bill that I pay is funding. That’s the irony. This is a growing idea it’s been picked up in the media. It really is recently as 2021, where people are realizing that the utility lobbying for the most part is being paid by the bills. And some lobbying is, is important. They need to understand there are issues of solar. We can’t just go whole hog without, so some of it’s legitimate, but when it’s very much, when it’s against local energy, me, yeah. It’s this utility versus me. And I feel like having my electricity bills that I do pay the utility used to fund something that’s not in my best interest.

Bill Nussey:
Give me my neighbor from being less likely to have solar on her house. That to me is an issue. And I think it’s gonna get called out by fun fact, one of the most fun facts in the book that people are always surprised to hear. And I cited this it’s several sources, cuz it’s so easy to say, bill gates said it once and he never cited it. I, I spent weeks tracking this down. If you look at all the industries, SSIS codes in the United States, including used car dealerships and fast food restaurants and school bus manufacturing, the lowest single industry in the United States for race search and development is the utility electric utility industry. Electric utility spends less than 0.1% of its revenue on research and development. Wow. And that’s interesting by itself, less than less than 0.1%. Wow. But there’s another stat that I found in a completely different location and a site.

Bill Nussey:
It multiple ways. If you look at all the industries and all the SIC codes in the United States for federal lobbying utilities are the third largest federal lobbyists. So the lowest R and D and the third largest federal lobbyist. But if you stop for a moment and consider that utilities are almost entirely legislated at the state level, there’s very little federal legislation it and state legislation. I learned there was no lobby disclosure laws in most states. So it’s a fairly good bet that utilities are the single largest lobbyists of any industry simultaneous the lowest R and D of any industry. And so again, we need utilities, they’re critical, but they have a system, a set up a, they had the best deal ever. Yeah. And they are brilliant. They fund little league teams and that’s wonderful. Cause little league teams couldn’t afford uniforms if it wasn’t for utilities.

Bill Nussey:
And I think the people that work at utilities, I met many they’re really good people and they believe that they’re helping the communities and using the profits. They get to do these things that matter. That being said, it bears examination. And it, we need to be asking whether there are some ways we could tweak and improve that model that will better serve the future of the country and the world. And much more importantly, it better serve the customers like you and me in the way when FDR and others struck the deal with insult to create the regulated monopolies don’t think anyone would have been okay on the government side with the degree of one side of power, the utilities have in these discussions today, that needs to be reset slowly and carefully bill. What’s

Nico Johnson:
Something that you’ve changed your mind about as a result of writing the

Bill Nussey:
Book, there were two things that are small in comparison to the scope of the book, but I was really surprised about, and they’re just sitting there in the numbers and the data that should be common knowledge. Mm-hmm no matter how bad everyone thinks coal is, coal is so much worse. The best thing that ever happened to coal was everyone decided it was the CO2 bad boy. Yeah. Coal is so much worse than that. And so when people talk about carbon capture with coal, it’s kinda like putting a data on an artery wound. Wow. And the coal Ash. And I talk a lot about this is it’s just so nasty. We just need to stop it. Unfortunately, it’s gonna stop because the economics are terrible. Yeah. That’s the one thing then the other one that surprised me when I looked at the hard numbers and I talked to experts was I had two big surprises about nuclear.

Bill Nussey:
One was that, all the things that we you’re generally scared about nuclear, actually, aren’t all that scary you and I could have, as I understand it, have a, a couple of uranium in our hand and be fine. Mm it’s not nasty. It’s when it comes out the other end that it’s plutonium other things. It’s a problem. Yeah. But that’s pretty manageable. And so I actually ended up as I researched it being a lot more open to nuclear than I thought, but then I read paper after paper and talk to expert actor expert nuclear is three or four times more expensive than solar. Yeah. It’s not intermittent. That’s good. Yeah. But nuclear’s probably more expensive today than solar plus battery. And nuclear’s most certainly gonna be more expensive than solar plus battery in five years. Right. And the time it takes to make nuclear. So I’ve turned from being a little negative, a nuclear to, Hey, this is actually really good. It’s not nearly, as now asked you as I thought it was to the, but as a business, it’s terrible. Right. And that was the two biggest surprises. Mm.

Nico Johnson:
The ethos of how you, aren’t now putting this to work, not waiting for the book to finish is embodied in the business name that you chose for your company, solar inventions, the best way to predict the future is to invent it.

Sam Easterby:
Nico. I so appreciate the amount of time that you took to learn and, and to dive in and, and dig deeper into the freeing energy book, the freeing energy project, the freeing energy podcast with bill, it’s been, it, it’s a, it’s a great interview. And I really enjoy listening to the two of you discuss some very, very important topics. So Nico, thank you from the bottom of our hearts for making this happen and sharing it with the freeing energy podcast.

Nico Johnson:
Happy to do it, Sam, truly the pleasure and honor was all mine. Thank you as well. And thanks bill for the invitation.

Sam Easterby:
Now I, if you’ve stuck around this long, you might be asking yourself, so what is the connection between tequila and freeing energy? Well, listen in as Nico Johnson shares a brief story about his journey into the world of tequila and how it is so relevant to freeing energy

Nico Johnson:
Tequila is it’s a cultural element of doing business in Mexico. And so to become fluent in what it meant to actually work with the Mexican culture, I had to become fluent in tequila. I had to, I was gonna have so many meetings that involved tequila, right? So I had to become a conure of the elements of how it’s made, why it’s made, where it’s made and who it’s made by. And the reality is that that’s the same story for every industry we would seek to pursue as a professional and most folks listening, especially to the freeing energy podcast, uh, or reading Bill’s book are trying to figure out how to become fluent or at least acculturated to the, the energy sector in a way that they can apply their skills. And I’ve genuine, genuinely found no better resource, no better, uh, to steal a word from bill vector for, uh, approaching this sector and gaining fluency in the vernacular, the underlying concepts and the impact on our culture than the freeing energy project and the book. And, uh, that is how tequila and freeing energy are symbiotic.

Sam Easterby:
what a beautiful way to end this discussion. Nico. Thank you so much. I’ve learned a lot today about both bill

Nico Johnson:
And tequila. Me too, man. It’s all, it’s always fun. And I continue to respect, admire and follow you all as you, uh, as you part the seas for others to walk into the energy sector and, uh, and do so with confidence.

Sam Easterby:
Thank you for joining us today. You have been listening to the freeing energy podcast, personal stories from the clean energy movement to learn more about the freeing energy project, visit our website, freeing energy.com. Subscribe to the freeing energy podcast on apple podcast, Spotify, Google podcast, and anywhere podcast are found. Make sure more people learn about clean local energy by rating and reviewing the show on apple podcast.

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