Could Home Batteries Save the Grid?

0:00:01 This is an iHeart podcast.
0:00:40 The demand for electricity is rising fast because of AI, because of the shift toward electric vehicles and electric heat and electric everything else.
0:00:46 And it’s relatively easy to install new solar panels and in a pinch to build more gas power plants.
0:00:51 But plugging them in, hooking them up to the grid, that part is hard.
0:00:59 The grid has to be big enough to reliably carry all the electric power that people will want at the moment of peak demand.
0:01:06 You know, at 5 p.m. on a hot summer day when everybody gets home from work and turns up the air conditioner and plugs in the EV.
0:01:13 And expanding the grid to accommodate those higher and higher peaks, that is really expensive.
0:01:17 On top of that, in a lot of places, expense is not the only problem.
0:01:24 Even if you want to add more power to the grid, you have to wait in line until the company that builds the poles and the wires can get to you.
0:01:33 And so people have started to think, what if we could figure out how to get more energy to more people without having to expand the grid so much?
0:01:42 I’m Jacob Goldstein, and this is What’s Your Problem?
0:01:46 The show where I talk to people who are trying to make technological progress.
0:01:48 My guest today is Justin Lopas.
0:01:53 Justin is the co-founder and chief operating officer at Base Power.
0:01:56 On one level, Base Power does something really simple.
0:01:59 They install big batteries at people’s homes in Texas.
0:02:03 And the batteries provide backup power during blackouts.
0:02:07 But Base’s business is actually much more interesting than that.
0:02:13 In a lot of places, Base actually owns the batteries that they install at people’s houses.
0:02:16 And the company acts as the homeowner’s electric provider.
0:02:17 They send them a bill every month.
0:02:20 And this is the really interesting part.
0:02:26 Having those batteries installed on thousands of houses has huge implications for the grid.
0:02:29 Because the batteries can charge whenever.
0:02:32 In particular, they can charge when the grid is underused.
0:02:36 Say, in the middle of the day, when solar panels are cranking out power.
0:02:43 Then, at that moment when everybody gets home and cranks up the AC, the batteries can discharge that power.
0:02:49 That means less energy traveling over the grid at moments of peak demand.
0:02:53 So, at the micro level, Base is a battery company.
0:02:56 But at the macro level, they’re a utility.
0:03:05 But instead of having a few giant power plants, they have all those batteries, which are essentially thousands of tiny power plants stashed next to people’s houses.
0:03:11 I asked Justin to explain how all this works from the point of view of a customer.
0:03:15 Let’s say you have a house in Houston and you’re a single-family homeowner.
0:03:18 First of all, you have to choose who you buy your power from.
0:03:19 You can’t buy it from the utility.
0:03:22 In this case, Centerpoint Energy is the Poles and Weyer’s owner.
0:03:24 They don’t sell power.
0:03:25 Not on their menu.
0:03:26 So, you got to go to someone else.
0:03:29 We are one of the options with which you can buy your power.
0:03:31 And we offer a rate.
0:03:33 Today, that rate is on our website.
0:03:37 And that rate is quite competitive in comparison to the other power providers.
0:03:40 And like we like to say, there’s no sexy electron.
0:03:43 Our electrons are the same as every other retailer’s.
0:03:45 It’s a classic commodity.
0:03:47 It doesn’t get more commodified than electrons.
0:03:47 That’s right.
0:03:53 Because it’s a commodity, the fundamental value is in the price and in its reliability.
0:03:55 And that’s what we offer.
0:03:58 Cheaper, more affordable, more reliable power.
0:04:04 Because when you sign up with base power, we charge you our relatively comparably cheap rate.
0:04:08 And we then put a battery on your home that we own and operate.
0:04:13 So, typically, if you’re a homeowner and you want a battery, you can shop around for them online.
0:04:15 There’s a handful of manufacturers of them.
0:04:18 You’re typically paying upwards of $15,000, $20,000.
0:04:22 Actually, for a battery of our size, it’s typically $25,000, $30,000.
0:04:25 And why would I be buying that battery if I was a homeowner?
0:04:31 Without a company like us, that’s really your only option if you want a battery on your home to provide you backup power.
0:04:33 So, the battery, it’s like instead of a generator.
0:04:36 The way people used to buy a generator, now they might buy a battery instead.
0:04:37 That’s right.
0:04:40 But from you, I’m not buying the battery.
0:04:40 What am I doing?
0:04:43 I’m just paying you to install it, but you own it?
0:04:44 Is that what’s going on?
0:04:45 Yeah.
0:04:49 So, compared to the cost of the unit, we have a very small upfront fee.
0:04:50 Today, it’s on the order of $500 or $600.
0:04:53 So, for $500, you install the battery.
0:04:57 How much cheaper is the power, by the way, than the median power price?
0:05:00 We typically save folks 10% to 20% on their power.
0:05:06 And that gap is widening over time as our costs to serve customers and put batteries on homes go down.
0:05:14 And that’s kind of the whole, and we’ll talk about this more later, but the whole sort of vertical integration concept for the company continues to drive prices down for homeowners.
0:05:15 And then, so that’s basically it for me.
0:05:19 And how long can the battery power my house if the power goes down?
0:05:24 So, just like, you know, how often you use your cell phone throughout a day, it depends on your usage.
0:05:29 Typically, what we say is on the order of a day for an average Texas home.
0:05:32 Longer, if you curtail your usage, you reduce your usage in some way.
0:05:33 Great.
0:05:33 Okay.
0:05:35 So, that’s the basic model.
0:05:36 How’s it going?
0:05:38 Quite well, actually.
0:05:40 So, we’re a little over two years into the company now.
0:05:43 So, we’re based here in Austin in the headquarters where I’m at now.
0:05:48 And we have operations in San Antonio, Dallas, Houston, and here in Austin,
0:05:51 where we do tens of batteries a day.
0:05:54 We’ve got several thousand on the grid, and we’re going quite quickly.
0:06:02 Our ability to install the batteries is far out surpassed by our demand for batteries.
0:06:05 It does seem labor intensive, right?
0:06:10 Having to go one house at a time seems like the hard, expensive part of your approach.
0:06:15 Yeah, I’ll say there’s a lot of hard parts, but bidding them into the wholesale markets and financing and all that.
0:06:16 Yeah, fair, fair.
0:06:18 People always say that when I say that.
0:06:18 It seems like the hard part.
0:06:20 It seems like a hard part of your approach.
0:06:21 It is a hard part.
0:06:22 That’s very right.
0:06:24 This concept we call the deployment factory.
0:06:25 Okay.
0:06:26 So, my background is in manufacturing.
0:06:30 What I was doing prior to starting the company here was in manufacturing and assembly.
0:06:36 And one of the things you learn is that manufacturing and construction are very different things.
0:06:44 Construction is a one-off, project-managed, sort of like individualized, custom, non-repeatable process.
0:06:48 You’re using words that make things sound like it take a long time and always go over budget.
0:06:49 Yeah, and are expensive.
0:06:50 That’s right.
0:06:50 Yeah.
0:06:53 With manufacturing, you know, there’s literature.
0:06:56 We didn’t make up, like, what good manufacturing process looks like.
0:07:01 But, you know, Henry Ford pioneered this in the early 1900s with division of labor and moving assembly line.
0:07:06 Toyota, he sort of perfected it with the Toyota production system in the 70s and 80s.
0:07:10 And these concepts were applying to what is traditionally a construction project.
0:07:15 So, if you get a battery or generator or solar installed in your home, you’ll typically have a project manager.
0:07:17 They will custom design it for the home.
0:07:20 And they will sort of take a very construction-focused approach.
0:07:22 We’re taking a very manufacturing-focused approach.
0:07:30 So, we’ve developed software that auto-generates our engineering drawings that we need to submit to the cities for permitting and to the utilities.
0:07:36 We have a piece of software also that commissions the system, meaning when you turn it on and make sure it works,
0:07:39 it automatically checks itself to make sure that you installed it correctly.
0:07:47 And very interestingly, also, we are beginning to design and manufacture the hardware, like the literal battery and power electronics themselves,
0:07:54 that are very easy to install in comparison to what’s available on the market if you just went and bought a battery for the home.
0:07:55 Uh-huh.
0:08:02 Because you don’t want some, like, high-skill sort of artisanal process where you need some guy who’s really good at installing batteries to do it, right?
0:08:03 That’s got to be…
0:08:04 That’s right.
0:08:06 That’s the enemy of scale at some level.
0:08:07 That’s right.
0:08:09 So, reducing the skill set and training required.
0:08:10 Yeah.
0:08:14 That’s very industrial revolution automation, right?
0:08:14 De-skilling.
0:08:15 Yeah.
0:08:18 The concept is not, like, the fundamental concept is not new.
0:08:23 The application to this use case is new and is unique for what we’re building.
0:08:28 Well, and even more generally, the application to putting it house by house, right?
0:08:37 Like, the whole point of the factory is it’s this incredibly sort of predictable, you know, homogenous, uniform environment that you can create for your optimization needs.
0:08:39 And a house is the opposite of that.
0:08:40 It’s just some house.
0:08:43 And, like, to some extent, every house is different than every other house, right?
0:08:48 Like, that seems like a thing that you are up against in trying to quasi-automate this process.
0:08:49 Totally.
0:08:50 You hit the nail on the head.
0:08:52 And this is one of the fundamental hard parts.
0:08:56 And this is, frankly, a lot of the reason why we’re designing the hardware itself.
0:08:56 Uh-huh.
0:08:57 Uh-huh.
0:09:00 The hardware meaning the battery pack?
0:09:00 Mm-hmm.
0:09:01 Yeah.
0:09:07 So, the reason we’re designing it ourselves is because we’re trying to abstract away as much of the difference of the homes as possible.
0:09:08 Uh-huh.
0:09:10 So, take this really simple example.
0:09:13 Many batteries in the market today are mounted to a wall.
0:09:14 Uh-huh.
0:09:18 Because they’re a little bit, you know, people at least think they’re a little bit more aesthetically pleasing.
0:09:21 And, I don’t know, it’s just kind of the way it’s been done, so to speak.
0:09:26 The problem with that is that you have to know what the side of the house is made out of.
0:09:27 Yeah.
0:09:29 If it’s a stud wall, you have to go find the studs.
0:09:35 You have to bring all of the different fasteners that you might need for a brick versus stone versus stucco versus siding house.
0:09:39 And then you have to train all of your crews on how to adapt to all of that.
0:09:41 And so, the hardware that we’ve designed is ground mounted.
0:09:43 It looks like an air conditioning unit.
0:09:44 It’s not mounted to the wall.
0:09:55 Again, it’s a somewhat simple change that makes a big difference in the supply chain availability, the labor training and availability, the skill sets required, and the time to install.
0:09:56 That’s one example.
0:10:07 There’s, like, 50 other examples of things that we have done with our hardware that is different from what’s on the market today that makes this home-by-home installation motion far more efficient and easier.
0:10:08 Give me one other example.
0:10:10 I like that example.
0:10:14 Another is the way we have made the battery modular.
0:10:22 Oftentimes, batteries that you buy are, like, one big brick that weighs several hundred pounds, and it takes a few people to, like, either lift onto the wall or place and move around.
0:10:30 We’ve modularized our system so that it’s a much lighter weight, and you can quick connect it into the other.
0:10:41 So, instead of having to run conduit and wire, which means, like, fasten the conduit to the wall, fish the fish tape through, pull the wire through, terminate the ends, make sure you’ve connected it right, it’s a harness.
0:10:44 It’s, like, literally, like, you know, your laptop into its charger.
0:10:45 It’s a quick connect mechanism.
0:10:50 So, now you don’t need to know how far to strip back the insulation on the wire.
0:10:52 Make sure you don’t nick one of the copper strands.
0:10:53 It’s de-skilling.
0:10:55 It’s if you can plug a thing in, you can do this.
0:10:55 Yeah.
0:10:56 Exactly.
0:11:04 That’s another thing that we’ve custom developed, a custom connector that makes it easy to transfer both data and power and high power together.
0:11:06 This is not something that’s available on the market today.
0:11:07 So, what are your metrics?
0:11:10 Like, how many people it takes and how long?
0:11:13 Like, do you have some core metric for installation?
0:11:15 Is it people and time?
0:11:16 Is it money?
0:11:17 Where are you at?
0:11:17 Where were you?
0:11:18 What are you at?
0:11:19 And where are you trying to get to?
0:11:19 Yeah.
0:11:26 So, at the very top level of the company, we track two major metrics that sort of check us on how good we are doing, so to speak.
0:11:29 One is the dollars per kilowatt hour deployed.
0:11:32 Kilowatt hour is like a unit of energy.
0:11:37 And so, how many dollars does it take to plug one unit of energy into the grid, essentially?
0:11:40 And that’s including the materials and the labor?
0:11:41 That’s everything?
0:11:42 It’s everything.
0:11:42 Okay.
0:11:48 That’s the bill of materials for us to manufacture it, the manufacturing costs that we do our own last mile logistics.
0:11:49 We deliver it to the home.
0:11:51 That costs, the install costs, all that.
0:11:51 Okay.
0:11:52 So, that’s metric number one.
0:11:56 And metric number two is how fast are we going?
0:12:01 How many kilowatt hours or megawatt hours are we deploying each month?
0:12:06 So, what is your cost per whatever, kilowatt hour, whatever unit you want?
0:12:12 So, the dollars per kilowatt hour, we are comparable to grid scale today.
0:12:15 And our next-gen hardware will be far, far lower than that.
0:12:20 We’re already the fastest deploying battery developer here in Texas.
0:12:21 We’re faster than anyone else.
0:12:24 We’re on megawatt hours per unit time per month basis.
0:12:31 And so, you’re racing not against other people doing what you’re doing, but against people doing giant batteries in fields.
0:12:37 And you’re saying you’re doing more total battery storage deployed per year.
0:12:38 That’s right.
0:12:39 That’s the case there.
0:12:41 And then on cost, we’re comparable to that today.
0:12:44 And our next-generation hardware will make us meaningfully more competitive.
0:12:46 So, the demand side is really clear, right?
0:12:47 You’re a homeowner.
0:12:47 You get power.
0:12:48 You get a backup.
0:12:50 Tell me about you.
0:12:53 Like, are you selling back to the grid?
0:12:57 Like, obviously, you’re buying from the grid in some fashion.
0:13:03 You’re buying power from somebody, right, and then selling it to the consumer because you’re not generating it on net.
0:13:07 Tell me about your business as a seller of power.
0:13:11 So, in the deregulated parts of Texas, this gets a little nuanced.
0:13:15 I didn’t know there were regulated parts of Texas as a naive New Yorker.
0:13:17 Deregulation is a bit of a misnomer, actually.
0:13:22 So, all that really means in this context is that you can sell power.
0:13:25 So, actually, here in Austin is a regulated area.
0:13:32 And if you live in the city of Austin, you have to pay Austin Energy, which is a municipally-owned utility.
0:13:39 But if you live in Round Rock, which is like one of the suburbs north of here, you have to choose who you buy your power from or one of those options.
0:13:44 So, in terms of selling electricity to homeowners, the business is quite good.
0:13:53 But, again, it’s honestly because of the battery because as a retailer, the financial model, if you don’t have any batteries, you’re just a regular old rep, retail electric provider.
0:13:59 You are buying energy typically at the wholesale price and then you’re selling it at a retail price that is higher.
0:14:01 And that difference is the margin that you’re making, right?
0:14:04 Most of the time, that margin is pretty good.
0:14:14 And then, oftentimes, like in August and hot like it is now, in the evenings when everyone comes home and plugs in there, you turn it on the oven, et cetera, prices go above what you’re selling your energy to.
0:14:18 The wholesale price is higher than the retail price at certain moments.
0:14:18 Yeah.
0:14:20 And so, the retailer is losing money in that moment.
0:14:22 And that’s when the business gets blown out.
0:14:25 It’s like sometimes those are crazy swings, right?
0:14:26 It’s not like a little bit above.
0:14:29 It’s like there are these wild whatever 10x swings or something, right?
0:14:29 That’s right.
0:14:37 So, here in Texas, just put some numbers to it, typically prices are between kind of 10 and 50, 10 and 80 bucks a megawatt hour.
0:14:38 Okay.
0:14:44 The highest price that the grid operator ERCOT allows in the wholesale market is $5,000.
0:14:44 Wow.
0:14:48 And this happens not super often, but it will go certainly above 100.
0:14:51 So, that’s 100x more or less from 50 to 5,000.
0:14:53 It’s 100x swing.
0:14:53 Yeah.
0:14:59 And so, if you’re just a regular old rep, you’re hurting pretty badly when prices are $5,000.
0:15:04 Even for 15 minutes or 30 minutes or 45 minutes or even, you know, $1,000 or $500.
0:15:15 Because we have the battery, when prices are that high, we’re able to basically turn off the home from the grid and instead support that battery or support that homeowner with the battery.
0:15:21 And so, now from a retail perspective, we’re not losing money, so to speak, simply during those periods of time.
0:15:21 Right.
0:15:24 Because you don’t have to pay the wholesale prices when they go crazy.
0:15:24 That’s right.
0:15:28 And we can actually spin the meter backwards, so to speak.
0:15:29 We can go sell that power.
0:15:30 So, can you sell?
0:15:33 When it’s $5,000, can you be a seller?
0:15:34 We can.
0:15:40 In fact, that is the market signal begging the market to put more supply into the system.
0:15:41 Indeed.
0:15:42 That is surge pricing.
0:15:43 Yes.
0:15:43 Yeah.
0:15:47 We’ll be back in just a minute.
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0:16:32 Interestingly, also, prices are not the same everywhere on the grid.
0:16:33 Aha.
0:16:36 So, it’s not like all of Texas electricity at any given moment is the same.
0:16:38 There’s different prices throughout the grid.
0:16:40 That is a function of the congestion on the lines.
0:16:46 And so, in an area where there’s a lot of congestion, there’s typically higher pricing at the end of that congestion
0:16:51 to incentivize more supply local to that point to relieve the congestion.
0:16:52 Uh-huh.
0:16:54 And so, our batteries are operating differently.
0:17:01 Our batteries in Houston are operating different than our batteries in Dallas, different than our batteries in San Antonio, different than our batteries in Austin.
0:17:06 And presumably, you built, I mean, is that AI?
0:17:07 Is it just an algorithm?
0:17:10 I mean, presumably, that is automated to some high degree.
0:17:11 Yeah, it’s automated.
0:17:11 Yeah.
0:17:13 And this is a big part of the software stack.
0:17:25 And we also got a energy markets software team that’s developed algorithms and direct interface with ERCOT, in the case of Texas, to go trade energy, basically, through ERCOT.
0:17:36 So, you mentioned ERCOT, and, like, as I understand it, there are, in a broad way, sort of three grids in America, West, East, and Texas, which is kind of awesomely Texas, right?
0:17:37 It seems very Texas.
0:17:41 And my understanding is the Texas grid is less regulated, right?
0:17:47 Part of the reason is Texas didn’t want to be subject to federal regulation, so they had their own grid.
0:17:50 I know that’s something of a simplification, but it’s basically right, right?
0:17:50 Yeah.
0:17:54 And so, I’m curious, like, is that why you’re in Texas, in part?
0:18:00 And are there regulatory barriers that would or will make it hard for you to expand outside of Texas?
0:18:03 So, the first part of your question is, why Texas?
0:18:04 You hit the nail on the head.
0:18:11 Part of it is because of the regulatory environment, where you can become this concept of a rapid retail electric provider.
0:18:14 The other is this fundamentally separated grid.
0:18:18 To your point, it’s not connected, for the most part, to the Western and Eastern interconnection.
0:18:25 And that drives volatility, which means that batteries typically can add a lot of value, can make a good amount of revenue.
0:18:31 It drives volatility just because there’s a smaller area to move power around?
0:18:37 Like, because if you have a big grid and there’s sort of more demand in one place, you can pull supply from 1,000 miles away or something?
0:18:39 And you can’t do that in Texas because it’s not connected?
0:18:40 Yeah.
0:18:42 Said simply, you can borrow from your neighbors.
0:18:44 In other areas, you can’t.
0:18:45 There’s no neighbors to borrow from.
0:18:45 In Texas.
0:18:46 In Texas.
0:18:46 Interesting.
0:18:46 Right.
0:18:49 And volatility is good for your business, right?
0:18:52 Like, it’s an arbitrage business at some level.
0:18:54 You want there to be swings in price.
0:18:56 That’s your margin to some extent, right?
0:18:57 That’s right.
0:19:04 In the deregulated markets where we’re directly interfacing with the wholesale markets, volatility generally drives returns on the business.
0:19:10 So outside of Texas, the way that this works is that you get a partnership with the utility.
0:19:14 So it’s the same operations and the same technology, but a different business model.
0:19:18 So in these cases, we go acquire a customer.
0:19:19 We say, hey, customer, you want a battery?
0:19:20 And they’re like, yep, we do.
0:19:25 We go design, manufacture, and deploy our own battery onto their home.
0:19:28 And then we give the keys to that battery to the utility.
0:19:29 And they control it.
0:19:30 And they pay us for that.
0:19:34 And the reason that they want that is because they need capacity to offset their demand.
0:19:39 They import energy from the rest of the Texas grid into their service territory.
0:19:40 They pay costs for that.
0:19:48 And they have other costs, like the cost of upgrading transformers that are at the end of their life and other things that you can offset.
0:19:49 Right.
0:19:50 It’s still the same problems.
0:19:51 It’s the same problem.
0:19:52 Yeah, I see.
0:19:57 In those cases, though, we’re not directly interfacing with the wholesale markets.
0:20:02 Now, we give them access to our software stack that allows them to do that on their own behalf.
0:20:03 But that’s the model.
0:20:07 So you’re basically providing the battery on the software in that setting.
0:20:07 Yeah.
0:20:09 The way we say it is it’s megawatts as a service.
0:20:12 You as a utility are looking for megawatts.
0:20:15 And you’re bidding grid-scale batteries, natural gas peaker plants.
0:20:22 Here’s another option that is faster to deploy, more cost-effective, and adds value in ways that centralized assets can’t.
0:20:26 So you’re competing with, like, a natural gas power plant in that setting.
0:20:32 Like, instead of adding a natural gas peaker plant, they can just deploy, I don’t know, what’s the order of magnitude?
0:20:34 A thousand batteries on people’s houses?
0:20:35 A thousand houses?
0:20:37 Yeah, a little more than a thousand.
0:20:37 But yeah, yeah.
0:20:40 Like, between a thousand and ten thousand compared to something like that.
0:20:41 That’s right.
0:20:42 Depending on the size of the natural gas plant.
0:20:44 This is how we expand outside of Texas.
0:20:51 And we’re actively pursuing opportunities, frankly, across the U.S., outside of Texas, in the same business model.
0:20:52 Again, how is that going?
0:20:55 So are you doing that outside of Texas at this time?
0:20:59 We do not today have live deployments outside of Texas.
0:21:05 We are working on a handful of deals that are in the pipeline, so to speak, I’ll say, for a few different opportunities outside of Texas.
0:21:09 We have a few, as I said, regulated utility deals inside of Texas.
0:21:12 And the goal is to be deploying batteries outside of Texas next year.
0:21:15 What’s something that’s hard that you haven’t figured out yet?
0:21:19 Like, what are you trying to figure out now, but that’s not working?
0:21:27 We haven’t, you know, we figured out some level of scale, but, you know, 30 or 40 a day is very different from hundreds a day, right?
0:21:29 And hundreds a day outside of Texas.
0:21:39 So I’ll say that, like, kind of this deployment factory concept is good from the standpoint of, you know, if we’ve been a company for about a little over two years now, but not nearly the maturity where we need to be.
0:21:42 We need to be much, much, at a much larger scale.
0:21:46 We need to have hundreds of thousands of electricians in the field across 50 states.
0:21:48 Like, this is a very different thing than what we’re doing today.
0:21:51 The other thing that we’re starting to do now is manufacturing.
0:21:57 So the battery itself, the major components, call it 80% of it, we haven’t manufactured ourselves to date.
0:21:59 We’ve been using a contract manufacturer for that.
0:22:02 And manufacturing is no joke.
0:22:05 This is, like, a hard thing to get right, as you likely know.
0:22:07 We’re already starting to do it now.
0:22:18 We’re building a factory across the street here, actually, in Austin, and building out a team of what I’d like to think are some of the top people in manufacturing, in battery design, in facility construction.
0:22:19 In the world.
0:22:21 So you’re building a factory.
0:22:29 I mean, you’re also charging people $500 for installation, which I imagine is less than the battery costs you install.
0:22:30 No?
0:22:30 That’s right.
0:22:35 And presumably because it pays you back over years, right?
0:22:35 Many years.
0:22:36 Yeah.
0:22:38 So it’s a super capital-intensive business.
0:22:47 You have to spend lots and lots of money now to get paid back over a long time in the future, which is the way utilities work, right?
0:22:50 You build a gas power plant, and it’s going to run for, whatever, 50 years.
0:22:53 So, like, how do you finance that?
0:22:54 Yeah.
0:22:55 That’s a great question.
0:23:01 So to date, we have been blessed with a large amount of support from the venture capital markets.
0:23:11 We recently raised a Series C, and so that will continue to accelerate our growth and give us the capital to continue to build all the things that we just talked about.
0:23:12 How big is it?
0:23:13 How much money did you raise?
0:23:16 So it’s a relatively large Series C.
0:23:21 So we actually are closing out over the next few days here on a billion-dollar Series C in equity funding.
0:23:22 That’s a lot of batteries.
0:23:23 It’s a lot of batteries.
0:23:25 But I guess, is it the factory?
0:23:27 I mean, is that money going to build the factory to build the batteries?
0:23:28 Is that what that is?
0:23:28 Yep.
0:23:36 It will allow us to grow the team, build the factory, build the batteries, continue to live out the mission of putting more and more distributed batteries on the grid.
0:23:40 We hope to have a battery on every home or most homes over the lifetime of the company.
0:23:44 And this is not a short-lived company that ends up selling or whatever else.
0:23:49 The idea is to make a dent in the universe and to really have a meaningful impact.
0:24:02 We will know that we have sort of achieved at least part of our mission when we see the curve of cost of delivered electricity to homeowners meaningfully go down, and we can attribute some of the work that we’ve done to that.
0:24:03 That’s why we’re all here.
0:24:04 That’s the mission of the company.
0:24:09 That’s why we’ve got all the people that have joined us on this mission, and that’s what we’re here to do.
0:24:10 And I think about what you’re doing.
0:24:15 I think about electrification of the economy, whatever, of our power supply.
0:24:17 And you don’t talk about it that way.
0:24:18 Why?
0:24:25 You know, I think it’s somewhat unfortunate that energy gets politicized.
0:24:28 It’s like literally science and engineering, and it shouldn’t be, but it is.
0:24:46 And I can tell you as a not native but now adopted Texan and spending a lot of time with a lot of right-leaning politicians and individuals here in Texas that batteries and solar and renewable energy is not a like – it’s not a left or right thing.
0:24:47 It’s just an economic thing.
0:24:48 It’s just a technological thing.
0:24:58 And so we try to avoid sort of any verbiage or sort of like insinuation of politicization because it’s just not.
0:25:02 It is notable that Texas is the leader in solar and wind power.
0:25:09 Like I think an underappreciated and extremely interesting fact in the context of what you’re describing, right?
0:25:10 Yeah.
0:25:11 Totally right.
0:25:17 And I think a lot of it is because there’s free market principles, which, you know, sometimes you can get – you can have sort of right or left coded or whatever.
0:25:18 But like generally –
0:25:23 Yes, well, that is right coded and it gives you more renewable energy, which is left coded, right?
0:25:23 Right.
0:25:25 That is why it is a delightful fact pattern.
0:25:26 Yeah, yeah.
0:25:32 And it’s like there’s free market principles that allow for the cheapest marginal megawatt of electricity to be generated.
0:25:35 Which happens to be solar power in Texas, right?
0:25:35 Yeah.
0:25:41 But the company is not – we don’t consider ourselves a green technology company, a climate company.
0:25:44 Like happy to be in that crowd too, but – so anyways, we try to avoid it.
0:25:45 That’s why.
0:25:50 We’ll be back in a minute with the lightning round.
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0:26:30 Okay.
0:26:31 We’re going to finish with the lightning round.
0:26:35 What’s one thing that your dad taught you about being an engineer?
0:26:37 Oh, interesting.
0:26:45 I think to never – to never sort of take the existing solution for granted.
0:26:51 It’s very easy to sort of color your solution to a problem with what has already been done.
0:26:58 And sometimes the way in which humanity has solved the problem is the best way because it’s sort of like the wisdom of the crowd.
0:27:07 But oftentimes, in particular in sort of old school industries like energy, there’s a lot of existing solutions that are not the best, especially with new technology.
0:27:11 This next question might have the same answer, but I’m going to ask it anyway.
0:27:11 Okay.
0:27:14 What’s one thing Elon Musk taught you about being an engineer?
0:27:15 Well, that’s definitely a piece of it.
0:27:28 I actually think that the thing that I learned from Elon the most is how much you can get done in a relatively short period of time if you work both hard and efficiently.
0:27:32 Oftentimes, what I’ve said sort of the first part of that sentence is like, oh, you just spend more hours and work all night.
0:27:33 And like, yeah, that’s a part of it.
0:27:36 But there’s only so many – like you can only work 24 hours in a day.
0:27:38 And realistically, you can’t even do that.
0:27:39 Not for long.
0:27:40 Not for long.
0:28:03 But the importance of speed and the ability to reduce – what he would say is delete the part or delete the process is extremely valuable to solving any problem, whether it’s designing a car like he and the team does at Tesla or a battery like we’re doing here or something operational with how we’re acquiring customers.
0:28:09 Always ask yourself why that thing or that process needs to exist.
0:28:12 And frankly, like at least half of the time, it doesn’t.
0:28:13 Just don’t do it.
0:28:14 Delete it.
0:28:15 Move on to the next thing.
0:28:17 And oftentimes, it’s okay.
0:28:23 The ability to design a simple part or process is much, much harder than to design a complex one.
0:28:24 It’s very counterintuitive.
0:28:26 But simple engineering is very hard to do right.
0:28:27 Deleting.
0:28:30 The key thing is just get rid of everything you can get rid of.
0:28:32 Yeah, you may have seen online.
0:28:37 There’s like this sort of – the Starship’s engine, the Raptor engine, went from like very complex to very simple.
0:28:39 And it’s like it was actually hard to get to the simple thing.
0:28:40 Yeah.
0:28:51 Because as an engineer and as a problem solver, you sort of start with the complex thing by design and you have to continuously ask yourself why something needs to exist, why that system or that part needs to exist.
0:28:54 Or is there a way we could make it work without that thing?
0:28:55 That’s right.
0:28:55 Yeah.
0:29:01 What’s one thing you learned about manufacturing from building a car from a kit?
0:29:04 Oh, you’ve dug into my past.
0:29:05 I like it.
0:29:06 I mean, it’s all public.
0:29:07 We don’t know any secrets here.
0:29:08 I know, I know.
0:29:09 Just what you put on the internet.
0:29:10 Yeah, I love it.
0:29:12 So the kit car built was a lot of fun, actually.
0:29:14 It was based on a Mazda Miata.
0:29:19 It’s like this tube frame, orange thing you’ve seen before this recording stalking me.
0:29:22 We call it doing research.
0:29:23 No, I like that.
0:29:24 No, this is great.
0:29:25 Well researched.
0:29:26 What I learned about manufacturing.
0:29:37 The ability to service, basically like repair something after it has been assembled, is an additional hard portion of the engineering problem.
0:29:40 And you also need to determine whether or not you even need to do that.
0:29:48 So when you’re taking apart a Mazda Miata to put it together, like the ability to assemble and disassemble, and it’s like, does the screw have access to come out?
0:29:50 You need some like weird angled wrench.
0:29:52 Like oftentimes that’s sort of an afterthought.
0:29:55 Like that thing wasn’t built to be taken apart by a guy with the wrench.
0:29:55 Yeah.
0:29:56 Right.
0:29:58 And like actually sometimes that’s okay.
0:30:01 Sometimes it’s a one-way door and it’s like, look, if it’s broken, just replace that whole module.
0:30:02 Yeah.
0:30:03 We take that approach in some of our hardware.
0:30:11 But actually building something that is easy to service and take apart and reassemble and modify is very hard to do.
0:30:15 And you sort of need to consciously make that decision as you’re designing it.
0:30:18 And it’s not something that everyone does.
0:30:22 What’s one DIY project you regret taking on?
0:30:25 So I used to live in Southern California.
0:30:31 We, my wife and I actually like flipped a house there and we lived in it while we flipped it.
0:30:34 That was the first mistake was doing the live in and flip at the same time piece.
0:30:40 The second was, uh, I, um, very bad at drywall, like extremely bad.
0:30:46 I’m not like, I think I’m like, okay, at carpentry and plumbing and, you know, I think I’d say decent and electrical at this point.
0:30:48 Really bad at drywall.
0:30:49 Very hard to make it look right.
0:30:53 The like finesse and artisanal nature of like mud on drywall.
0:30:54 Impossible to get right.
0:30:56 I look up to people that can do it.
0:30:57 I messed it up big time.
0:30:59 How’d you do on the house?
0:31:01 The house was okay.
0:31:04 The drywall, um, there’s, I’ve now learned.
0:31:06 Why people put texture on walls.
0:31:08 It’s like to hide a lot of that kind of thing.
0:31:08 Uh-huh.
0:31:10 And that’s what I ended up doing.
0:31:13 So I ended up being like, okay, sort of, but.
0:31:16 Some kind of like L.A. groovy deco stuff.
0:31:17 It’s like, no, no, it’s arty.
0:31:19 It’s not messed up.
0:31:21 Exactly.
0:31:32 Justin Lopas is the co-founder and COO of Base Power.
0:31:36 Please email us at problematpushkin.fm.
0:31:39 We are always looking for new guests for the show.
0:31:43 Today’s show was produced by Trina Menino and Gabriel Hunter-Chang.
0:31:48 It was edited by Alexandra Gerriton and engineered by Sarah Bruggear.
0:31:52 I’m Jacob Goldstein, and we’ll be back next week with another episode of What’s Your Problem?
0:32:02 This is an iHeart Podcast.