Residential rooftop solar is growing at a staggering rate. Why are so many people deciding to go solar? Host Bill Nussey catches up with Vikram Aggarwal, Founder and CEO of EnergySage, the most popular web-based marketplace for solar buyers in America. Vikram shares his personal story behind founding EnergySage and the unique insights he has gained into the solar marketplace as his firm has become the #1 source on solar information in the US.
How long does it take for a solar installation to pay for itself? What are the important questions to ask when choosing equipment and installation firms? How do residential batteries fit into the equation? What options exist for people living in apartments or otherwise lack access to a roof?
Whether you are considering solar yourself or you just want to understand what the residential solar revolution is all about, make sure to listen in.
https://freeingenergy.libsyn.com/vikram-aggarwal-why-are-millions-of-people-putting-solar-on-their-roofs
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Additional information
Links referenced in the interstitial:
- SEIA: Solar Market Insight Report 2020 Q3
- EnergySage Releases Its Ninth Solar Marketplace Intel Report
Transcript
Bill:
Welcome Freeing Energy listeners. We have another really exciting conversation today. And I have heard about this company and its CEO for many years. Their work, their site continues to be frankly, the number one place I have found good information on the rise and growth of local energy. So it’s been at the top of my list for a long time to meet the CEO Vikram Aggarwal of EnergySage. Vikram knows more about how to be an on-ramp for local energy than pretty much anybody I’ve met. So he’s going to share a lot of his insights through the work they do at EnergySage and his own personal insights. So, Vikram, welcome to our show today.
Vikram Aggarwal:
Thank you, Bill. Thank you for the kind words, and excited to be speaking with you and your audience.
Bill:
I was fascinated and inspired to learn that you grew up in a pretty very different perspective on electricity than I did and most of our listeners. So can you tell us a little bit about that?
Vikram Aggarwal:
Sure. I grew up in India in the ’70s and ’80s and then I came to the US for my grad school. So growing up in India, I experienced the shortage of electricity very personally because we did not really have access to uninterrupted good quality power supply as I was growing up. The other thing that always bothered me a little bit was there was a thermal power plant that I could see from my house. It was burning coal to produce electricity for the City of Delhi. Pretty much every day, it’s spewing dark smoke up in the air. And as most of your audience may know, the air quality in Delhi is not the best and this was contributing to making it even worse.
Bill:
2 million households in the United States, I think it’s even larger now, have put rooftop solar up, and this is one of the fastest trends in the broader solar industry. For most homeowners, also for commercial building owners, it’s so complicated. They don’t know where to start. There’s a million different vendors. Many states and counties have different laws and regulations and policies. And it’s so daunting. I get questions all the time about what should I do? How do I think about it? The most popular question is when will it make me money? My answer is always now.
Bill:
As people ask me this, I started going online to get an assessment of what resources were available for them. And I came across EnergySage and then I came across EnergySage again and again and again. And this site, your site, Vikram, is from what I can tell, and I think you told me, is the number one site on the internet for solar. So tell us a little bit about how you decided to start EnergySage, and when did you start it and how did you get it to be the number one site?
Vikram Aggarwal:
My solar journey started sometime around 2005. As you may remember, Arnold Schwarzenegger kicked off the California Solar Initiative, putting a target of million homes powered by solar in the State of California. So at that point, I was working for a large financial services company in their private equity group, making investments in residential home construction. So we were essentially buying up lumberyards around the country, the preferred supplier for home builders and contractors. So as the California Solar Initiative started rolling out, a lot of builders started coming to our lumberyard company to ask for help in procuring solar panels and even helping with installation of solar panels. As you can imagine, this is very early on. Most people did not really know how to install solar. And for folks in the industry, they may remember that solar panels were in significant shortage back then. So that was my first entry into the solar industry.
Vikram Aggarwal:
And as a lifelong environmentalist, I got really excited about the prospect of learning about solar. So I raised my hands and said, “Hey, I would really like to learn about solar.” So we started looking at making investments in the broader energy efficiency space, helping home builders build more energy efficient homes, and then of course, power them with solar power. So as part of that journey, one of my favorite moments, I guess, that maybe the seed of EnergySage was planted was I was near Sacramento in a brand new development of homes, and the builders essentially took us to one of the homes that was being powered by solar. They had just installed solar panels on the roof, and this is a beautiful 3,000 to 4,000 square foot home. It was a bright, hot, sunny day. We walk into this home, it’s nicely air conditioned, and then we go into the garage and look at the inverter, which showed how much energy is being produced.
Vikram Aggarwal:
And essentially, that home was being run by solar power at that point. So that was such an amazing moment when I realized this is a great technology. This home is beautiful home run by solar with panels that are out of sight sitting on the roof producing power. There is no noise, there is no white or black smoke coming out of the roof. It’s like, “Man, this is the greatest technology.” So that I think was the start of the love affair with solar power.
Vikram Aggarwal:
And then over the next few years, we looked at investing in a number of different solar companies, and in 2008, came very close to buying one of the largest solar installation companies in California. And the thing that kept me away from actually making that investment on behalf of our private equity fund was I would ask the companies to sell me solar.
Bill:
Interesting.
Vikram Aggarwal:
And try to convince me why I should buy solar. And the answer that I kept getting early on was you should buy solar because it’s the right thing to do for the country and the environment. But I did not hear the words that I wanted to hear until the end of 2008. By the end of 2008, the investment tax credit was extended to residential homeowners as part of the TARP program. And at that point, I was at the Solar Power International in San Diego, and some of the companies started talking about the financial benefit and the payback period. And while the payback period was not that great, it was generally in the 10 to 12 year range. As somebody coming out of the financial services industry, I thought that was great. If you invest X thousand dollars, this product will give you 8% to 10% return year after year, tax-free, virtually guaranteed.
Bill:
That’s a really big point. And I don’t think I’ve heard anyone articulate it as well as you did. So just say that one more time. This is maybe one of the most overlooked and powerful points about solar. Say it one more time for me.
Vikram Aggarwal:
So I used to build financial products for this large financial company. And when I saw the returns associated with solar, which is 8% to 10% annual return, which is tax-free and almost guaranteed for the next 20 plus years, there is no financial product out there that can give you these kind of returns. And this was 2008, remember that.
Bill:
Wow.
Vikram Aggarwal:
And of course, things have changed since then quite a bit and the economic argument has just kept getting better. And that was by realization on my flight back to Boston, the seeds of EnergySage were sown.
Bill:
People ask me, “I’m super excited about the clean energy revolution, Bill. What stocks should I invest in? Should I invest in the one that makes the fast cars, should I…” Whatever. And after I’ve talked to you the other day and going forward from now on, my answer is going to be the best investment you can make that’s almost risk-free, that’s going to reduce the carbon dioxide, it’s going to reduce pollution, and is actually going to be one of your better investments is putting solar on your house. It’s like that’s part of your portfolio.
Vikram Aggarwal:
Exactly.
Bill:
And such a powerful idea.
Vikram Aggarwal:
And that is the first blog that I wrote for EnergySage.
Bill:
Fantastic.
Vikram Aggarwal:
Clean energy is a new asset class.
Bill:
I like it. But it’s a asset class from a homeowner’s perspective, from someone who has a 401(k) and who’s a dabbling in stocks and things like that. So especially with so much unpredictability in the big stock market going on in the last couple of years and years going forward, this is a safe place to put some money. And we’ll talk more about it as we have time, or the people should go to EnergySage if we don’t, but it’s not like you have to write a check for the entire thing. You can finance it. There’s all kinds of ways to reduce the upfront costs. So let’s talk about 2020. We’re seeing record numbers of people putting solar on the roof. Why are people doing it? And why is it not as obvious, the reasons?
Vikram Aggarwal:
Yeah, so as we just discussed, I think initially, the early adopters of solar were mostly installing solar because of the environmental reasons, because they wanted to do the right thing. Even if the financial rationale wasn’t there, there was at least the feel-good aspect. And then, call it from 2010 on, a large number of consumers were installing solar because it had a very strong financial rationale. And last few years, I think we are starting to see a further evolution of consumer interest in solar and broadly, energy efficiency and clean energy. And the reason for that, as you know, there are some megatrends that we are witnessing.
Vikram Aggarwal:
Number one is I think more and more people are looking to live more sustainably. As you know, we are seeing the movement in beyond meat, the meatless burgers, right? People really want to live more sustainably. And they’re willing to invest in their homes to not only increase their comfort, but also to control where their energy is sourced and how they’re consuming energy. So essentially, the movement towards smart homes. And last but not the least, I think we’re starting to see, and especially because of COVID and other climate related events recently, people are starting to be very interested in solar, and especially solar plus storage because of resiliency, right?
Vikram Aggarwal:
So we have power shutoffs because of wildfires in California. We have a really strong storms all the way up the East Coast, all the way, going up to New York and Massachusetts and you’re losing power because the grid is not very strong. And especially, during COVID, people felt that they’re not in control of a lot of things. So they started looking at solar storage as something that they can control. At least they can control their energy destiny.
Bill:
You said something when we spoke earlier that really stuck with me, and you called it their smart home journey or their clean energy journey or the sustainability journey. You’ve kind of touched on it, but just put that in context for me because I love that metaphor of how people are evolving in terms of their relationship with all this.
Vikram Aggarwal:
Absolutely. So what we see is that as a consumer, as all of us, as consumers, we start learning about things and that is what piques our interest. And then we finally buy it, right? Adopt it, I guess. So what we are seeing with homeowners in particular is that people a few years ago started installing smart thermostats that they were able to use to control how they’re using energy and heating and cooling their homes. People started installing sensors to measure which gadgets in their homes are using how much power. People started installing solar. Some people started buying electric cars.
Vikram Aggarwal:
What we are finding is that people’s journey may start with one or more of these products, but once they get in, they get hooked. They really like it. So they may start with a smart thermostat and then say, “Hey, now I have more information about how much energy I’m consuming and where my energy is being sourced. So now let me take active action to do other things.” So they may then go to solar. Then they may add battery. Then people who installed solar, they say, “You know what? If I’m producing all these electricity, can I replace my heating and cooling system and replace oil and gas with heat pumps to self-generate? And hey, guess what? If I’m generating enough electricity, maybe I’ll buy an electric car.”
Vikram Aggarwal:
And what we also see is people who are buying electric cars are saying, “Hey, if I’m going to buy an electric car and buy electricity from the grid, can I generate my own power?” So it’s very interesting. There is no linear single track all consumers go through, but overall, I think consumers are very interested in this journey and more and more of American households are now going through this journey.
Bill:
This book I’m working on for next year, I talk about some of the motivations for people that are environmentally minded. And I used some statistics, I think some of which I cited from you guys, some of which I came up with, but for folks that are concerned about the climate, I love to point out that that megawatt hour you’ll generate over a month with the solar panels on your roof will keep a ton of CO2 out of the air that would otherwise have been released from coal or even more efficient or more environmentally friendly natural gas. It’s still 900 pounds.
Bill:
So how much is a ton? You had to plant 525 trees to get that. It’s the same output as driving your car, a standard car, 2,300 miles with gasoline. So these are numbers you can find on EnergySage’s website. And it makes it incredibly visceral and powerful, not just to save money, but while you’re making a material impact on the environment. And the last thing I like to say, there’s a lot of studies, you guys have some as well, that say of all the individual decisions we can make to reduce our carbon footprint, your electricity consumption is usually the largest. It’s usually much larger than the food that you eat. And so if you really want to make a difference and you’re one of the folks that are fortunate enough to afford or be able to get the credit to put a solar on your roof, that may be the best thing you can do.
Vikram Aggarwal:
In addition to solar, being a very good financial rationale, I think as a taxpayer, we all should be very concerned about the big bill that climate change is going to be issuing us very, very soon. And actually, that bill is being paid even today through our taxpayer dollars and the bill is going to be just increasing year after year after year. In Massachusetts, our state is getting ready. We are already getting flooded every fall, which never used to happen, and the state is planning to spend hundreds of millions, if not tens of billions of dollars to protect our coastline, our Downtown Boston, communities around the ocean. And Massachusetts cannot print that money. That money will have to come from us taxpayers.
Vikram Aggarwal:
And directly or indirectly, we are going to be paying for climate change. So the sooner we can start taking action and limit the damages of climate change, as we know, I think we have another 10 years left to really make a difference and stop the worst impacts of climate change. The time for action is now. So it will help your pocketbook directly and it will help your pocketbook indirectly by keeping your taxes under control.
Bill:
And as important to point out to people that are skeptical about this is all the costs that you just talked about, they’re enormous, but those are not the costs you’re talking about solar paying for itself. And the pure dollars and cents in your checkbook every month solar is going to pay for itself-
Vikram Aggarwal:
Exactly.
Bill:
It’s a two or three or a hundred times savings in the longest term, not just immediately. That’s something a lot of people get confused about. And early on, a couple of years ago, I think a lot of well-meaning environmentalist were conflating some of those numbers. But on a pure dollar to dollar cents to cents basis, solar saves money. Let’s jump into the tactics of it. So all the time, I’m sure you get it a thousand times more than me, “Gosh, Vikram, I want to get solar on my roof. It seems like there’s a million options. I can build it myself, I can hire someone to do it, I can finance it, I can have someone own it, manage it, I can go community solar.” What are the options? And how do they think about them?
Vikram Aggarwal:
Absolutely. So for most homeowners, they have two choices. They can either install solar on their roof, or they can subscribe to a local solar farm, which is also called a community solar farm. The community solar is not an option for most homeowners around the country. Community solar is an option available to homeowners in roughly 10 to 12 states in the United States as of today. The number of states that are adopting the legislation to allow community solar is increasing. So we’re very excited about that.
Vikram Aggarwal:
But let’s say you live in a state where you have the two options. So you can either put solar on your roof or you can subscribe to a solar farm. I’ll start with community solar. Community solar is a very simple product. There is somebody who’s building a big solar farm in your area and you can say, “You know what? I want my electricity to come from that particular solar farm.” You go and subscribe to it. And essentially, the way it works is the electrons from that solar farm are directly credited to your electric bill. So you essentially are now able to say, “My electricity is coming from that solar farm.” Typically, you’ll end up paying about 10% less than what you would pay your utility for that electricity.
Vikram Aggarwal:
So for a very limited effort on your part, you can actually source your energy from a nearby solar plant. And most of these farms are now making it very easy for you to cancel the subscription. Let’s say you are moving or you find another better offer or whatever, you can usually cancel it with 30, 60 day advance notice and either go back to the utility or go to another provider.
Vikram Aggarwal:
Then the second option is rooftop solar, where you decide to install solar on your roof. And of course, there are pros and cons to that. Number one is now you have solar panels directly on your property. That is the electricity that is powering your home directly. Of course it’s a bigger investment on your part, but the savings are much larger. So typically, the solar panels will pay off for itself within, call it six, seven, eight, 10 years.
Bill:
I put solar panels on my roof, they’re going to pay for themselves in six, seven, 10 years. And that means that the money I’m not spending in my electric bill will essentially pay down over six, seven, 10 years. Then what happens financially after it’s paid off?
Vikram Aggarwal:
You have free electricity for the rest of the life of solar panels. And solar panels last… They’re warrantied for 25 years and they are known to last 30, 40 plus years. So, as I said, I love it that they stay very quietly on your roof, keep producing electricity, there is no noise being made, there is no white or black smoke coming out. It’s lovely. And what’s not to like?
Sam Easterby:
According to a third quarter, 2020 insight reports from the Solar Energy Industries Association, solar accounted for 37% of all new electricity generating capacity added in the United States in the first half of 2020. Residential installations were down 23% from Q1 to Q2 in 2020. This drop was due largely to shelter in place orders during the initial stages of the COVID-19 pandemic that imposed restrictions on selling and installing residential solar.
Sam Easterby:
Despite this, the market is still on pace to at least match installation totals from last year, but the demand and interest remains strong. In its 2020 Solar Marketplace Intel Report, EnergySage reports that both traffic and leads for solar installers around the country rebounded in May and June to significantly above 2019 levels. And when I asked in an EnergySage consumer survey, almost 60% of the respondents said they are either more likely or much more likely to shop online for solar and storage solutions now, rather than pre-pandemic.
Sam Easterby:
With solar systems and storage solutions cost declining, consumers are taking a closer look at the two combined. Biggest reasons, financial savings and resilience are top of mind for consumers today. Visit freeingenergy.com to learn more about these two reports. And don’t forget to like and subscribe to the Freeing Energy Podcast. Now back to Vikram and Bill for more insights.
Bill:
I have to tell you that even though it’s a little cloudy today, we’re generating more than a power in my house to power my computers and my internet so that this is, as I think about it really for the first time, my solar powered podcast, 100% powered by solar energy and a pair of Tesla batteries, which we’re going to get to in a few minutes.
Bill:
So let’s talk about putting that solar on your roof. You got to do a couple of things. You’ve got to find a company to do it, and there’s a lot of companies, some aren’t so great, some are awesome. And also there’s different ways to pay for it. You can write a check upfront, you can get a financier. So can you tell us just very briefly what they should be looking for to explore each of those options?
Vikram Aggarwal:
Sure. So there are three major decisions that as a homeowner, you will have to make. Number one is which equipment to buy to install. This equipment is going to stay in your home for the next, as we said, 20, 30 years or more. So that’s one big decision. Number two is, as you said, how to finance it, and I’ll go into more detail in a minute. And number three is which solar company to hire to do the installation, right? It generally comes as a package deal, of course, but these are the key decisions you have to make.
Vikram Aggarwal:
Because solar is a big ticket item, right? For most people, it’s going to cost between $10,000 and $20,000 before any tax credits. As a homeowner, you should always shop around. We always recommend that you get quotes from three, four, five different solar companies so that you can really compare your options. And this is what EnergySage does. We are a consumer resource. We are a marketplace. We help consumers get competitive quotes from high quality prescreen solar companies and present all the quotes on our dashboard in a truly apples to apples format and really highlight the three aspects as we just discussed.
Vikram Aggarwal:
But let’s say consumers don’t want to use EnergySage. And I understand. That’s fine. Let’s talk about how they should go about it, right? So, as I said, three key decisions, equipment, financing, and the contractor itself. Most of the equipment today that is available is good, but there are subtle differences. So you can buy different kinds of solar panels, different kinds of inverters. The difference is… I’m a car person, so sometimes I talk in car lingo. So you can buy a Honda Accord or you can buy a BMW, right? They’re both really good cars, but the Honda Accord may come with a 150 horsepower engine versus the BMW may come with a 300 horsepower engine, right?
Vikram Aggarwal:
So that’s kind of what solar panels have. Like they have different kind of efficiency within a given amount of space, how much energy can they generate? So if you have plenty of roof space and you are not using that much energy, you can go with lower efficiency panels. They’re still well-made, but they will not produce enough power, right? Versus if you have limited roof space and you want to generate a lot of electricity from that limited roof space, you may want to go with a higher horsepower solar panel. So those are the kinds of decisions you may have to make.
Vikram Aggarwal:
There are different color choices. People are now faced with a lot of aesthetic decisions. How should the panels look? And the great news is solar industry is now making beautiful looking panels. You can even get those with all glass panels that just look beautiful. And then same kind of decisions with the different kind of inverters that are available. So those are the decisions you have to make. And EnergySage has an excellent buyer’s guide where you can compare every model of solar panel, inverter, and battery that has ever been made and marketed. You can compare them on our database. You can search filter and find which brands and which models might be the most suitable for you. So that’s number one.
Vikram Aggarwal:
Number two is how do you finance it? So typically, you have three options. You can, of course, write a check, pay cash, just like you’re investing in the stock market or bond market. Number two is you can take out a loan. You can go with your own bank, local bank, credit union, or solar companies sometimes offer different kinds of loans. So you can look at that. Or number three, which used to be very popular in the past, it’s likely less popular now is you can lease them just like you lease your car. There are two flavors of those. Either you call it a lease or a power purchase agreement, also called PPA.
Vikram Aggarwal:
All three are really good options. It all depends on what your financial situation is, what your objectives are, and how easy you want the whole process to be. Of course, with cash, you save the most. With leases, you save the least, but it’s the easiest, right? The company will check your credit score and if your credit score is good, they’ll come and install a solar panel on your roof. And they will run it, they will manage it. And they may give you a discount of 15%, 20%, 25% on your electric bills. So most of the savings of course goes with them, but man, it’s easy, right?
Vikram Aggarwal:
It’s generally a 20 year lease. So it’s a little bit longer than what I would like. I wish there were five-year, ten-year, 15-year leases, but currently, the industry is offering a 20 year lease. And then in the middle are different kinds of loans. So one thing that a homeowner may have to do is do the financial analysis of different kinds of loan options. Are there upfront fee? What kind of interest rate? What kind of term? Of course, EnergySage makes it all easy. We show you the different financial savings associated with different financing options.
Bill:
So they can model this on your website?
Vikram Aggarwal:
Yeah, we’ve actually modeled it for them and show how these things compare, but consumers can build a spreadsheet and do it on their own.
Bill:
Good. And so let’s talk about the last one, I think, which is the one that’s maybe the, not necessarily the most important, but one that I think people are least comfortable with, newest, which is finding someone to do the installation.
Vikram Aggarwal:
Yeah, so there are over 4,000 solar companies-
Bill:
4,000.
Vikram Aggarwal:
That are installing solar. And the good news is that number is increasing. A lot of the electricians, general contractors, roofers are now starting to get into solar. So the numbers are increasing. That said, our industry is still pretty new. And unfortunately, there have been some less than honest players in the industry. So the one thing that we have done is we pre-screened every company out there that we invite to join our platform. So we really… As a homeowner, you really have to look at their experience and their expertise in installing solar. What kind of reading and reviews do they get? How honest and direct are they when you are actually shopping with them? How transparent are they?
Vikram Aggarwal:
Solar is new, as we just discussed. Most homeowners really don’t know what questions to ask, what the right answer might be. So there have been some issues with consumer protection, the solar salespeople making claims that may or may not be that true. So that is one of the most difficult things out there for consumers.
Bill:
This is by and large an incredibly honest industry, but it’s good to be armed with the right questions.
Vikram Aggarwal:
Do your homework. As I mentioned, I think the best thing you can do is get quotes from three, four, five different companies. It will allow you to compare what the questions that you are asking and how they’re answering with different providers. And with some of the key critical questions, I may even say, get the questions answered via email so you’ll have it on record. Of course, we make it easy to do this all online, but if you were doing it outside of EnergySage, this is what I would recommend.
Bill:
One of the things I love about your site is there’s a staggering number of companies where you can put in your ZIP code and your address and they’ll aggregate a series of proposals for you. And so in that regard, you guys have a lot of competition, but I found nobody else that has as much basic content. If you just go from the top of your website and you do search engine, I go to Google and you look around, but you guys have so much educational material, which is why I was anxious to meet you and make sure that we shared your story because you guys are by far the best, not only the most popular, but the best that I’ve seen on-ramp for getting started with solar.
Vikram Aggarwal:
Yeah, the one thing, Bill, the reason for that is very simple. We did not develop so much content for SEO. The reason why we started writing, and initially, it was me who was writing most of those articles was, so, first couple of years I spent learning about this industry. And everything that I was learning, I was writing about that because it was new to me and I found that when I was talking to my friends and friends and family and talk about solar, they would ask me these dozens of questions. I would go and find out the answers to those and just write it. I said, “If I don’t know the answer, if my friends and family don’t know the answer, I don’t think most people also don’t know that answer. So let me just start writing whatever I’m learning.”
Vikram Aggarwal:
And this is 10 years worth of learning that we have had over the years. And every day, EnergySage folks talk to consumers, homeowners, and business owners. Every day, we get hundreds of questions and we basically turn around and say, “This is a question that is being asked by more than a handful of people. Let’s get the answer and put it out there.”
Bill:
I think that’s a fantastic origin story and it’s… Authenticity. You can tell when you look at content that’s written for search engine optimization and my experience with your stuff is that it’s actually high impact genuinely. And my own journey is very similar in that I wanted to learn the industry, so I started writing a book a few years behind you, but the book is a bit of a chronicle of the things I’ve learned, not so much about how to put solar on a roof, but similar questions about the industry and the megatrends and all that. So I really respect the results of your process because it’s worked.
Vikram Aggarwal:
Yeah, and just to add one more point, we are also releasing a lot of data. This idea that when we learn something, let’s share with others still continues today. So every six months, we publish a report that analyzes the data from our marketplace. So if people are interested, you can go to energysage.com/data, and you can download really excellent insights about the solar industry that are not available anywhere else.
Bill:
So, listen, the one thing I want to make sure we cover and get your recommendations and advice on is solar has found a new best friend. No one could afford a… I ogled over this idea of putting batteries in their house, but there weren’t any good products. Even the Tesla products weren’t available if you wanted them. That’s changing really fast. The price of these residential and commercial scale batteries are just coming down at the same rate that solar did, and many of the big installers you mentioned are putting batteries in. I have a couple of Powerwalls in my house here. In some ways, it’s really simple. Do you want to put batteries in or not? They raise the price. So your payback time’s a little longer, but they offer tremendous benefits. So tell us about the state of batteries and how should someone who’s thinking about putting solar on their house, decide whether they should have batteries in that project?
Vikram Aggarwal:
I couldn’t have put it any better. I think solar has found its best friend, batteries. So as I mentioned, I’ve been in the solar industry for 15 years and I’ve seen how the interest in solar has increased over the last 15 years. I think the same kind of consumer interest has been in batteries in a much shorter period, I would say in the last three to four years. So whatever solar had in 15 years, batteries got there in three to four years. The amount of consumer interest in batteries is phenomenal. In some cases, I wish that wasn’t the case because I wish our grid was more resilient that climate crisis wasn’t causing power outages all over the country and which is forcing homeowners to now think about batteries. So from one perspective, I wish that wasn’t the case, but it is the case. A power grid is less than fully reliable and consumers really want that kind of a control over their electricity. So more and more consumers are installing batteries.
Vikram Aggarwal:
The other thing to know is while solar was complex, batteries are even more complex. And we have been writing a lot about batteries and how to think about which battery to install. Batteries come in different sizes, they have different capacities, how much power they can hold, and also one of the big differences, how much power they can discharge at a given point of time. So as a consumer, there are, rather than making it too complex, let me say maybe a couple of things you want to keep in mind.
Vikram Aggarwal:
Number one is this battery is not going to get you to go off grid unless you are willing to spend a ton of money, which most people are not. They’re just looking at solar as a backup, right? And then if you use that battery and try to run everything in your home at the same time, it may only last a few hours. So a lot of solar companies will recommend that when you install batteries, your only plan to use your most critical gadgets. It could be your air conditioner, it could be your refrigerator, it could be your water pump, or whatever else is the most important.
Bill:
Computer. Like really important stuff.
Vikram Aggarwal:
Or your computer. Exactly. For some people, Wi-Fi is the most important thing that they want to make sure it’s running, right? So you have to decide what are the gadgets that you want to run and for how long would you expect them to run if you have a power outage? Are you looking for a few hours to a couple of days, a week? And that will help you determine what size battery you should be installing. And the other is how much power can you extract at the same time? So let’s say if you want to run both your refrigerator, your water pump, and your air conditioning system together, you may need a specific battery that can extract that kind of power concurrently. So that’s an additional concern that you have to look into.
Vikram Aggarwal:
The good news is there are about a dozen really good battery companies. Of course, everybody knows about Tesla Powerwall, but I would highly encourage folks to look at the other 10, 11 companies that currently have product in the market and the other dozen or so that are getting ready to come to market sometime soon. And then make sure that it is paired with the right kind of smart technology that can allow you to turn on or turn off the gadgets that you want to run off the battery so that you can maximize the use of a battery in case when you need it.
Bill:
One other benefit of batteries in California and optionally in other states like mine and Georgia, you have time of use rates on your electricity. Instead of paying a fixed rate throughout the day and evening, the rate changes. And this is a win-win for both you and the utility. Everyone saves money. It’s kind of a crazy idea. I love the history of our industry, and [inaudible 00:36:26] was the one that really popularized these dynamic pricing time of use things. And so it’s got its origins in the origins of the grid.
Bill:
But anyway, if you use a battery, it’s like time shifting with your digital video recorder. You could watch it later, or you can move the power from the sun around to when it’s most valuable to you relative to your bill. And I think this… By the way, even though utility struggle with some of this because it feels like a threat to some of them, this is actually that use will lower their costs and ultimately, they’ll benefit from it. So we’re moving into a world… And by the way, time of use rates are likely to be adopted more and more across the country. So this is an exciting win-win coming up.
Vikram Aggarwal:
Massachusetts, for example, our utilities are offering money to homeowners who have batteries if the homeowner lets them extract power during peak demand periods in the summer. So if people are using a lot of air conditioning in middle of July and the utility can tap into your battery to supply that power, you can make hundreds of dollars by doing that.
Bill:
So you make money with the battery. That’s really cool. That’s cool. You said you can make a couple hundred dollars a year?
Vikram Aggarwal:
Yeah, depending on the size of battery you have and how much battery you allow them to extract.
Bill:
Right.
Vikram Aggarwal:
So as a homeowner, you can say, “You know what? Just take about half of the power stored in the battery.” And of course, that will get you a few hundred dollars. If you say, “Okay, no, drain it 100%.” That’s fine. They’ll give you more. Of course, how much you let them use, you can control it through your smartphone, et cetera. So it’s very, very powerful.
Bill:
Yeah, there’s some really cool stuff coming up. And that’s really was the genesis of the entire Freeing Energy Project was the plummeting cost of solar followed five or 10 years with the plummeting cost of batteries, which is now hitting a tipping point where together these systems are cheaper than the alternative. And what you said earlier, Vikram, was that if you put solar up, you’re going to make money. It may take five years or 10 years, but you’re going to make money on it. And it’s going to be like a good stock investment. You add batteries, it may take longer to pay for itself, but at some point, it will pay for itself. And so it’s a question of how long you want to wait for that full return, but all the long way, you’re getting fantastic services and features and resiliency in the case of batteries and pollution reduction in the case of the solar.
Bill:
I used to get so passionate about this because this is one of the most obvious things that people should be purchasing yet I get the question all the time, like, “Well, is there ever a scenario where I’ll actually get paid back for the solar?” It’s like, yes, every scenario, you’ll always get paid back. We could go on this for hours. I love talking to you, but let’s start wrapping up and cover the four lightning round questions as we call it. And we ask all of our esteemed guests these same questions and we use them over and over in other things. And so let me just jump right in. What excites you most about being in the clean energy industry?
Vikram Aggarwal:
Yeah, this is such a loaded question. This is not a lightning round question, right? I think what excites me about this industry is all the innovation that is going on. We are in the midst of the next energy revolution. Human history, I think if you look at globally, the economic growth of any economy has been driven by the availability of energy and especially, affordable energy. And with the renewables, especially solar and wind, we are looking forward to affordable, abundant, clean energy.
Bill:
So, if you could wave a magic wand and see one thing changed in the transition to clean renewable energy, what would it be?
Vikram Aggarwal:
Just one?
Bill:
Just one.
Vikram Aggarwal:
The good news is that there is plenty of consumer interest. If you talk to homeowners and businesses, they are already interested in solar and renewables, which is one of the best news for the industry. I think what’s keeping us from this transition is of course the incumbent energy companies, right? So oil and gas, they are very large industries, deep-pocketed, and they have a lot of political influence. And I think if we get the policy right, all the factors are driving us towards renewables.
Bill:
Great. Thank you. Third question, what do you think will be the single most important change in how we generate, store, and distribute electricity in the next five years?
Vikram Aggarwal:
There is a very big change coming our way, which is electric cars. The adoption of electric cars is of course starting to go up. Within the next two to three years, we are expecting dozens of electric cars coming to the market. I don’t know, Bill, if you have driven or you’re driving an electric car.
Bill:
I have one. Big fan.
Vikram Aggarwal:
You have one. Great. And once you drive an electric car, you almost feel… I wonder if it feels like when humans drove cars versus horse and buggies. It’s just a different experience. It is just so much more fun. So, I think we’ll see a major transition towards electric cars.
Bill:
All right. So last question, what would you say to someone who asks, “What can I do personally to help accelerate this change towards clean energy?”
Vikram Aggarwal:
Please go out and vote. One of the most important things that you can do. Sorry for the political [inaudible 00:41:43], but I think as we just talked, policy is what’s keeping us from making this transition. All the other factors are pointing towards this is our future.
Bill:
Thank you for that. Well, listen, this has been fun. And the hardest part was there was so much I wanted to talk about and so much great insight I’ve gotten from you even when we weren’t recording. So hopefully, we can have you back at another point and do some deep dives in some of these areas and maybe get you and your team at some point to give us marketing lessons on how to build the number one site in any category, which is a great thing to do. But this has been a ton of fun. So thank you very much, Vikram, for spending your time today, and thank you for all the great work EnergySage is doing to help this market move forward.
Vikram Aggarwal:
Thank you, Bill. Well, it was my pleasure. And look forward to speaking with you again soon.
