Ep. #1205 - Clean Energy Trends: Driving Innovation
Today’s episode of Startup Hustle features an enlightening conversation with Matt DeCoursey and Tim Hade, Co-Founder and Chief Development Officer of Scale Microgrid Solutions. Together, they explore the dynamic world of clean energy innovation. Gain insights from Matt and Tim on the ever-evolving climate tech landscape, the indispensable role of public-private collaborations in the energy sector, and the obstacles confronting clean energy initiatives. Discover the promising advancements set to shape the future of clean energy.
Covered In This Episode
Renewable energy accounts for 13 percent of the US energy consumption in 2022. While that doesn’t seem like a lot, it’s much more than a decade ago. Given the potential benefits of clean energy, it makes sense to drive innovation in the technology. Scale Microgrid Solutions does just that.
Listen to Matt and Tim’s conversation about clean energy trends. Tim recounts his journey to Scale Microgrid Solutions and his conviction that energy is always a public-private partnership. They also discuss the struggles with batteries, incentives for getting a solar-powered home and raising money in green spaces. Matt and Tim agree about the joys of generating electricity in a clean way and optimizing energy use. They also discuss future clean energy innovations, including the impact of AI on the clean energy space.
Clean energy is the new focus! Innovations in the space should interest anybody, so join the conversation in this Startup Hustle episode now.
- Tim’s journey to Scale Microgrid Solutions (1:19)
- Why energy is always a public-private partnership (3:49)
- The legislation and regulation challenges of solar energy (6:58)
- The challenges of deploying clean energy (11:49)
- The struggles with batteries (15:55)
- Incentives for getting a solar-powered home (19:46)
- Raising money in the green spaces (22:26)
- Local solutions to local problems (25:29)
- The joys of generating electricity in a clean way (30:02)
- Fascinating clean energy innovations in the near future (31:45)
- Optimizing energy use (37:37)
- The impact of software development and AI on the clean energy space (40:29)
- Climate Tech offers excellent economic opportunities (43:29)
Energy has and always will be a public-private partnership. And that means that the government plays a big role in deciding which technologies will power the electric grid. There are a bunch of reasons for that. The easiest to understand is there are a lot of national security implications around energy on how we procure energy and ensure our energy grid is reliable and protected. That requires government intervention and interaction.– Tim Hade
Installing a solar system on a house that you think you might move out of in a couple of years doesn’t make sense. But it does, kind of, because there are a lot of people that would probably be attracted to buying that home. The energy costs aren’t going to go down.– Matt DeCoursey
It’s really fascinating the things that a lot of software entrepreneurs in the space are coming up with. They’ll tell you to start cooling the arena this minute, then you want to back it off for 12 minutes, then you want to ramp it up again for 14 minutes. And it seems like how can this possibly matter? And then you save 30 grand. This stuff happens all the time. We’re really seeing the complexity of that math right now, and AI is turbocharging the ability to solve complex math challenges in the energy space.– Tim Hade
If you’re an entrepreneur listening to this, looking for something to do, or a tough challenge to tackle, I promise you that climate tech has opportunities for you. This is the fastest-growing sector of the economy. Many world leaders called solving climate change the greatest economic opportunity in the history of mankind. And we need a lot of help. And if you do it right, it can be good for the planet and your wallet. And I hope more people come in and test themselves.– Tim Hade
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Following is an auto-generated text transcript of this episode. Apologies for any errors!
Matt DeCoursey 0:00
And we’re back, back for another episode of Startup Hustle. Matt DeCoursey, here to have another conversation, I’m hoping helps your business grow. All right, we got to keep it green and clean, people. And while I’m gonna get mean if you don’t want to do that. It’s time it’s 2023. There are too many options and solutions out there for you to run your house, your business, your life, and everything off of green renewable energy. And I’ve got an expert today that’s driving innovation in that space. Before I introduce today’s guest, today’s episode, Startup Hustle, is powered by FullScale.io. Hiring software developers is difficult, and Full Scale can help you build a software team quickly and affordably and has the platform to help you manage that team. Go to FullScale.io to learn more. With me today. I’ve got Tim Hade. He is the Chief Development Officer and co-founder at Scale Microgrid. That’s a renewable energy and semiconductor manufacturing company. Say that four times really fast, people, because it’s a lot. Anyway, straight out of Ridgewood, New Jersey, Tim, welcome to Startup Hustle.
Tim Hade 1:05
Thanks so much for having me.
Matt DeCoursey 1:07
Yeah, you know, let’s get things started today with a little bit about your backstory and what brought you to building solar and clean and renewable energy.
Tim Hade 1:19
Yeah, so you know, I guess if we go back a little a little ways. My, my first career was I was in the US military. So I went to the Air Force Academy for undergrad and then spent six years on active duty service. While I was in the military, the worst job in the military was driving diesel convoys across Iraq and Afghanistan, which we needed to do because most of our forward operating bases ran on diesel generators. And so one of the things that I was part of looking into while I was in the military was the idea of distributed energy resources. Really, at the time, it was using solar and a different kind of battery than we use today to alleviate the need for diesel. And that kind of got me on this path of thinking about distributed energy, solar batteries, things like that. Once I got out of the military, I went and worked for one of my best friends from growing up and his father at a family generator company, which subsequently, a few years later, we spun out, scale from, and we’ve been working on that ever since. So that’s the real short, dirty version of the genesis story here.
Matt DeCoursey 2:31
Yeah, well, the clean, the clean version of it, I guess, maybe. But yeah. I’m curious when you’re drafted. So, I own a small hobby farm like South Kansas City. I just bought it a couple of months ago, and one of the things that I’m working on is making it sustainable, you know, and, and, and, you know, it’s like, it’s not true off-grid, like, in the middle, I didn’t have to, like carve a road or anything, but I’ve been experimenting with solar power. I bought some portable batteries and solar generators. And, and, you know, it’s really opened my eyes to a lot of it because I realized, well, first off, I realized immediately how much surface space you need to generate, like 100 Watts, and then, obviously, the storage of it, and, you know, I’m working on, you know, replacing my roof and getting solar panels out there and stuff like that. But, you know, one of the things has been challenging, and, you know, still here in 2023, and I mentioned, there is a lot of accessibility to this stuff. And then there also is a lack of it. In some regards, you know, I have a had a hard time finding like electric things or accessibility to some of it, you know, that’s a little bit different than what you guys do. You guys are more on the commercial side of things and manufacturing things at a large scale, right?
Tim Hade 3:49
Yeah, that’s right. And so, um, look, I think the general way to think about this, I think maybe the one thing that everyone should know, is that solar power is awesome. So done correctly, I don’t know anyone who’s ever installed a solar system or solar storage system that’s regretted it. Now, to be clear, the projects aren’t always done correctly. And so you got to sort of normalize for that. And you got to find, you know, good companies and good partners to work with. But it’s an amazing technology and it benefits, you know, and use customers communities, in really material ways. Look, I think, you know, one of the things that’s really interesting about how this industry is evolving right now, is it tends to be evolving on like a state to state basis. Right? And a lot of this unfortunately, has to do with politics, which it shouldn’t, but it does. And so, you know, problematically in the middle of the country right outside Kansas City. That’s not like a great area for solar and so finding, you know, good companies and good partners to work with is really hard. If you’re in California where I live or you’re on in the Northeast I’m sure you’re in states like Colorado or Minnesota that have really progressive policy towards this stuff, then there are a lot of good partners to work with. Right? And so I think ultimately, um, you know, energy has and always will be a public-private partnership. Right. And that means that the government plays a big role in deciding which technologies are going to power the electric grid. That’s the case today, it’ll be the case tomorrow, there’s a bunch of reasons for that the most easiest to understand is there a lot of national security implications around energy and how we procure energy, and how we make sure our energy grid is reliable and protected. That require government intervention and interaction. And so, you know, in order to really make this stuff, work and build the best energy grid that we’re capable of building, it really is a public-private partnership. And in certain areas of the country, you’ve seen that work really well. And in other areas of the country, it’s not working well at all.
Matt DeCoursey 5:59
Yeah, you mentioned Kansas and yeah, there are that’s that’s the issue I really have. There’s not a the amount of vendors or people and then. And then, honestly, there’s it’s hard to differentiate a lot of the stuff that comes, you know, that’s there. You know, I’ve got everything from Tesla, to who knows it. What’s interesting with renewable stuff is Kansas is actually the number two state in the country for wind. Yep. And if you’ve ever been to Western Kansas, you know that the wind just blows and you can’t drive to Colorado now without seeing, like, massive amounts of windmills and stuff like that. It does blow my mind when people complain about windmills. They’re like, Oh, they’re an eyesore? I think they look pretty cool, man, you know, like, I don’t know. But yeah, it’s the same thing, you know, with solar and stuff like that. Now, for you, what is the is the biggest problem or issue or hurdle that you have to climb over? Related to laws and legislation?
Tim Hade 6:58
So there’s a lot, right? um, I think, you know, um, to begin with, right, what I would say is that, you know, if we lived in an alternative universe, I think climate change could be an issue that really unites all of us together, right? Because as we’re continuing to see, as this plays out, climate change doesn’t discriminate, right? And so, you know, it impacts people in California, it impacts people in Hawaii, but it also impacts people in Kansas and Mississippi and Missouri, right? And we have the solutions to fix it. And so really, what the challenge is right now is how do we deploy those solutions as quickly as possible. And so look, I think there are two real barriers to doing that today. One is state policy, right? And so if you think about, like, a company like ours in a state, like, Kansas is actually not the worst offender, but let’s just use like Alabama as an example because Alabama is not friendly for people like me, right? Um, you know, it’s hard enough to build a business, when you have a business like this, when you have government support, right? It’s very technically challenging. It’s very financially challenging. There’s big numbers associated with doing this kind of stuff, it’s hard to do. But when you’re doing that, and you know, you’re actively running into resistance at every level of the state government, it’s also not fun, and people don’t want to do it. And that’s why I think a lot of states are falling behind in terms of, you know, access to clean energy. So that’s the first thing, right? I think, I think there, you know, there has to be more support for renewable energy, for clean energy. It just makes economic sense on top of everything else. And you know, look, I think one of the things we’ve seen over the past 18 months is that a lot of the investment in clean energy manufacturing is being disproportionately sent to red states, right? So, you know, we’re building battery factories in West Virginia, and Tennessee, and Kentucky, and Georgia and places like that. And so hopefully, like, over the next decade or so, that kind of political dynamic eases up because, you know, we would love to work in all those states. But it’s really hard to do so when you don’t feel welcome, right? And so that’s the first thing. And then the second thing is, the business model that runs the utility grid is a regulated monopoly model, right? So for those listeners who aren’t super in tune with how the electricity grid works, utilities have monopoly authority over the electricity grid. And what that means is that wherever you live in the country, the only entity that is allowed to run wires from across property lines is the utility. There is no competition. It’s the utility or it’s nothing. And that creates a system where there are a lot of perverse incentives. And the incentives aren’t always to build the key bit cheapest, cleanest, most reliable system for constituents. Right? Ratepayers is what we call them in our industry. And so trying to figure out how, you know, new innovative companies, like ours, can interact with utilities in meaningful ways, is, I think, probably the second biggest challenge. I think that’s changing a lot as utilities start to see this not as a threat to their business, but as a way to grow their business over time. I think at the highest level, if you think, how do we solve climate change? The answer to that is electrify everything. And that means transportation and heating and cooking and industrial processes. And that means that we need more electricity, and utilities make money when they produce more electricity. So I think that that dynamic is starting to head in the right direction. But those tend to be the two biggest barriers to proliferation for businesses like ours, state policy and utility governance.
Matt DeCoursey 11:06
It’s interesting, you know, in regards to the energy grid, I had a guess it’s been several years at this point. It’s company out of, I can’t, I met a loss for the name of the company. But we even went and visited them in San Francisco, and we went to TechCrunch. But they had an AI solution that was helping basically solve energy grid problems. You know, San Francisco is pretty progressive and was in the process, and they were using this and they have a lot of electric vehicles. The problem is, is that if everyone switched to electric right now to the best of my understanding, the grid wouldn’t really support that.
And so like that, that that’s a massive blocker in regards to being able to make change on a large scale basis. Are there things going on to fix that?
Tim Hade 11:48
Yeah. So the good news for everyone listening is, from like an innovation standpoint, we have like 85% of the problem solved, right? So with existing technology, and this is just to be clear, for everyone like this is a crazy technical challenge. So if you want to do like really, really difficult, technical work, being in the clean energy space is an awesome place to do it. Because the magnitude of some of these problems is mind boggling. With that said, you know, today we have about 85% of the answer, right? Um, and really what the problem is right now is deploying that technology onto our existing grid. So as an example, right, like one of the biggest barriers to decarbonisation right now is the lack of transmission lines. We know how to build transmission lines, we know how to operate those transmission lines with, in a lot of cases, AI-enabled software, that allows them to run really efficiently and economically. We can’t build transmission lines. There, you know, the red tape and the regulatory issues and all that type of stuff prevent us from doing what we need to do. So it’s not a technical problem, it’s a regulatory problem in that sense. And that type of situation manifests itself sort of at all levels of the electricity grid, but the in the energy industry overall. We need to be able to move faster from a regulatory and a policy standpoint, in order to enable the deployment of these types of technologies. And then there’s like the 15%. So there’s kind of two jobs in the clean energy industry. One is deployment, that’s what most of us work on. So my company, for the most part doesn’t build new technology. On the software side, we do some, but for the most part, we’re not a technology company in the sense that we’re not, you know, building a new type of generator, a new type of battery or anything like that. What we’re good at is deploying those assets and figuring out how to pay for them and monetize them over time and deliver the best value proposition to the end use customer. So as an example, right, like you want solar panels on your farm. If I worked in Kansas, I’d be the guy to call, right. And I would figure out how to give you the best system at the best price. You know, figure out how to deal with all the incentives, figure out how to make sure you have a good installation contractor, all that type of stuff. And you would pay me a rate less than you’re paying the utility to be able to do that. And so that’s kind of what we do as an organization. But then there’s like the 15% problem, right, which is, ultimately we want to be able to get to 100% decarbonisation. We have 85% of the tech stack worked out. That other 15% is gnarly, right. So there’s all sorts of stuff, right? Like,
Matt DeCoursey 14:22
What’s in there?
Tim Hade 14:23
I mean, what’s the things like, they tend to be like, really big bet, right? So one solution to solve that 15% problem is fusion nuclear energy, right? So you have a bunch of raising billions of dollars to try to figure out how to, you know, run atoms into each other and create new
Matt DeCoursey 14:44
Targeting just regular fusion or cold fusion.
Tim Hade 14:46
So this is this is what’s typically referred to as like regular fusion in the nuclear industry. Cold Fusion is like a slightly different Yeah, right. Yeah. There’s I mean, there’s, there’s billions of billions of dollars being invested in that kind of stuff. Things like different kinds of batteries, right? So most all batteries deployed in the US today are lithium ion batteries. But there are other chemistries like iron air, and nickel, hydrogen, and all these other different kinds of chemistries that are predominantly being driven by startups, who are experimenting with those types of things. And the goal of all those companies is to try to figure out how to address that 15% that we don’t have figured out, which if anyone can figure that out is going to be really, really lucrative. But look, I think, you know, the overarching message for everyone is like, let’s not, like, get distracted, we got to get to 85%. And then we could figure out the 15% maybe over the next decade or so. But the most important thing right now is we got to move and we got to move fast if we’re gonna, you know, defend ourselves as as well as we possibly can against the impacts of climate.
Matt DeCoursey 15:55
You know, you talk about this struggle is real with the batteries. So I bought a kit that has 400 watt solar panels. It has a power inverter and some other stuff. And I’m, I’m going to work on it with my kids to build pumps and aerators in my pond, right? Yeah, farm, which I don’t want to just run to me like I’m we’re trying to, like revitalize and bring life back to like certain things. But do it in the same way. I’m trying to teach my kids about it. Here’s the problem, that frickin battery that I need to charge weighs as much as both of my kids put together. It’s 135 pounds and like, and from, and that’s tough. And honestly, I’ve had this kit for about two weeks now. And I had to I, the other day, it was about to rain, and I was dragging the battery into the garage. And I was thinking I was, like, because, you know, I’m thinking a lot about this kind of stuff. And I want to be a parent that teaches my kids that this is the way of the future. But, man, that some of that stuff’s kind of hard to manage, you know, like. You know, is there is there a world where I’m not going to have to drag that battery around? Because like you said, that’s for for relatively small panels to end to save some of the power like I can only imagine what it needs to be for a house.
Tim Hade 17:11
Yeah, man. So look, I think I think that’s like a very keen insight and something that not only exists at, you know, individual level, but basically applies to everything, right? So make no mistake, right? Like, we have 85% of the technology we need to solve this problem solving this problem is so hard. It’s by far the hardest thing I’ve ever tried to wrap my mind around. And I think that’s like very consistent when you talk to clean tech founders or, you know, environmental activists or legislators or people who really work on this issue. It’s really, really hard. Look, here’s the way I think about it, right? Um, I think in the 1960s, when we were thinking about like sending a man to the moon, one of the things JFK said at is we do these things, not because they are easy, but because they are hard. And so here’s kind of the way I apply that to this, um, if we can’t solve climate change in America, we can’t solve climate change. That’s just like the reality of the situation. There are a lot of other countries that are trying, right, like bunch of European Union countries and a bunch of Asian countries and stuff like that. It’s either going to happen here, it’s not going to happen, right? Like this is the one place in the world where we have the right mix of academic expertise and capital markets expertise, and like this innovative startup culture, and the right incentives and the right group of people to be able to pull this off. And if we can do this in America, then we can export those learnings to the rest of the world. And we as a civilization have a shot at fixing this and leaving the world a better place than our than we inherited for our kids, which look, I’ve been all over all around the world. And the one thing I think binds humanity together is we all want our kids to have a better life than we did. And so if that’s what we all want, right? And then by the way, that’s true, like, I have some very, very, very conservative friends who live in the middle of Texas and, like, own a bunch of guns. And I have some very, very liberal friends who live in, you know, coastal elite cities. And the thing that they all want is they want the kids to have a better life than they had. And so, if that’s what we want, we gotta get our shit together. And we got to do hard things. And yeah, like, that’s gonna be hard at the individual level, it’s gonna be hard at the corporate level, it’s gonna be hard at the state level, it’s gonna be hard at the federal level. But I don’t know, right, like America is America because we do hard things, right? Like none of the stuff that we’ve accomplished, that we’re proud of as a nation is easy. And in this particular circumstance, if we don’t do it, no one else is going to and so that’s generally how I think about that dynamic.
Matt DeCoursey 19:46
Speaking of doing hard things, finding experts, software developers does not have to be difficult, especially when you go to FullScale.io where you can build a software team quickly and affordably. Use the Full Scale platform to define your technical needs and see what avail mobile developers, testers, and leaders are ready to join your team. Go to FullScale.io. To learn more, I want to talk about incentives for a second and finance and a couple of them. And I’m not trying to counter point. You said the resources aren’t always there. Well, you found them, you guys are risks. According to my notes, over $500 million in investment, congratulations. Now that there’s money that is definitely pouring into this, and with that, like part of like, okay. So, if I install a solar system on my house, which by the way, I have two homes like the one I’m at right now, I’m not even allowed to do that. which bothers me. Like, that bothers me a lot. Like, why not? Yeah, and I just literally can’t do it, not only my HOA prohibits it. And so it’s a city that I live in, which is stupid, right? Like, who cares? It’s solar panels on a roof. But, you know, for those of you listening, the government will pay for 30% of your solar installation on on a home level, and think about that as a third off, and that’s a tax credit, not a deduction. So let me explain. And by the way, I don’t give financial advice. So this is not what this is. But a tax credit is literally whatever you pay in taxes, they will credit towards it. So I bought it, we had a Tesla delivered earlier or last year. I got a $7,500 tax credit, meaning I have a tax bill and then $7,500 came off of it, there is money out there on the consumer level that I feel that people just don’t either they don’t know it exists. I mean, 30% off of something like that. And look now, that might I think one of the issues that comes up with that is maybe some people know about it, but installing a solar system on a house that you think you might move out of in a couple of years doesn’t make sense. But but it does kind of because there’s a lot of people that would probably be attracted to buying that home. The energy costs aren’t going to go down. I don’t think I mean, I don’t know, the needs seem to go up, inflation goes up.
Tim Hade 22:03
Definitely not going down. Yeah.
Matt DeCoursey 22:05
Yeah. And you know, but like, as far as like incentives and things like that, that are making it easier, I’m seeing them begin to form. Now back to the capital thing. You know, is it easier to raise money in these green energy spaces than, than it has been in the past? Like, where’s that trending?
Tim Hade 22:26
Yeah, um, so from a, from a, from a fundraising standpoint, definitely. Right. Um, you know, I think, really, you know, 2020, 2021, there started to be a bump in VC specific investment in the clean tech space. What I think most VCs referred to as climate tech. That trailed off in 2022, with interest rates, and you know, everything that was going on in the macro economy. Now, I think it’s making a pretty strong comeback. But like, compared to 10 years ago, it’s a night and day difference. And if you’re a climate tech entrepreneur, there are a lot of venture capitalists, early stage investors, angels, folks like that, that will want to have a conversation with you. But look, the second part of this ties into this right, the economics of these businesses are mind bogglingly complicated, right? And so it is very true that if you install a solar system almost anywhere in the United States, you’re eligible for a 30% tax credit. In fact, there’s also adders in the inflation Reduction Act that make you eligible for up to 60% of that system to be refunded in the form of a tax credit. Depending on where you’re located and what kind of solar panels you’re using and things like that. But figuring out how to get that system installed and take advantage of that tax credit, right, a lot of people don’t have a tax base, that they can actually apply that tax credit against things like that. They’re like actually doing it is a lot easier than it is to write it. Is, I guess, the fundamental problem. And so what you what what has really emerged in the clean tech sector, and we’re kind of part of this group is an asset class of companies that are generally referred to as energy as a service company. And fundamentally, what we do is we go to end use customers, we work in the commercial space, but there are a lot of companies that do this in the residential space as well. And we basically say, look, like, we’re gonna take care of all this stuff for you. Right? Currently, you pay $80 a month for your utility for electricity, we’re gonna take care of all this stuff. And after that, you’re gonna pay $75 a month for electricity. And we’ll take essentially all the performance risk on the system. We’ll take care of all the tax credits for you. We’ll take care of all the state incentives, the local incentives, the permitting all that kind of stuff for you, and you don’t have to worry about it. Right. And so that that, I think, is really the business model that’s going to win the day because all of this stuff is really, really complicated. And you don’t want to be going at it yourself for in most cases, right? Like, there are a lot of hobbyists out there that just kind of like this stuff and like figuring out and all the better to them, you definitely pay somewhat of a premium to have someone do all the work for you, right? And so if you could do it yourself, you can theoretically achieve better economics than you can if you have a third party doing it on your behalf. But I think that’s really, you know, the business model that’s going to prevail in the clean tech sector over the next decade or so. You’re just gonna have a lot of people that want to do this stuff, but don’t know how to do this stuff. And so you have to have an intermediary that can kind of bring it all together for you. And then look to your second point, every piece of evidence out there shows that equipping residential and commercial real estate with sustainable energy systems makes the value of your property go up. And so if anyone wants to be in this is thinking that they don’t want to install solar on their roof or a battery in their garage because they think it’s going to hurt the value of their property when they sell their house in a few years. All I can tell you is there’s no evidence to suggest that’s the case. And people should look into it more.
Matt DeCoursey 25:59
Yeah, I think it’s more the you look at the expense of and I know you’re on a different side of this, but like on the residential side, I mean, it’s a pretty big investment, you know. I mean, it’s gonna take you seven to ten years to recover that cost due to lack of bills that you would get in and then your legit, you know, getting a return from that. And I think that’s what, but yeah, I mean, and then sometimes it just is the fact that I can’t even do it at my house here. And by the way, you know, what really kills me with that. My house aligns perfectly with the path of the sun in my backyard so much, that it’s problematic. I mean, literally like it like ruins decks, and sizzles yards and stuff like that. I mean, it’s like, I could probably fuel three houses, with a little bit of that. But why won’t you let me do it? Yeah, that sounds to me like, that’s back to that legislative red tape. It’s like, come on, I mean, that makes it completely impossible.
Tim Hade 26:58
For sure. So, two really important things that you brought up there the first thing. So one of the reasons you want to work with an energy as a service company is because they’ll make the investment for you. So in the residential sector, right, there’s two big national companies, I like them, both one’s called Sunrun, and other ones called Sunnova. If you own a home, what you do is you call up one of those companies. And you say, I want solar panels on my roof, and they come out and they do an inspection, and they give you a price. And then if you say yes to that price, they install the system on their balance sheet. And then they charge you for the electrons that that system produces. And so what actually happens is you have to invest no capital upfront, and you save money on that first bill. And so for most people in the country, and this varies by region area, you know, there’s all sorts of nuances to this. But for most people in the country, you can get a solar system installed on your roof, at no cost to you, and it will save you money the first month that you utilize it. And so economics shouldn’t really be a barrier.
Matt DeCoursey 28:01
And now we’re getting to be creative, right?
Tim Hade 28:03
Yeah. There are exceptions to that rule. But that’s, that’s like, generally correct. And then look, I think, you know, when it comes to like, homeowners associations and local governments and all this type of stuff, like, yeah, it’s a big problem. Right? And that’s like one area where I think the only solutions are local solutions, right? And so like, if your homeowners association has a policy that you can’t put solar on your roof, like, that’s a stupid fucking policy. Yeah, somebody should go to the homeowners association, and be like, this is dumb. Like, why do we have this policy? Somebody explain. I mean, look, this is true, the CEO of our company, just got just put solar on his house a few years ago, and he had to fight a three year battle with his town to overturn an ordinance about having solar panels on the side of your house that faces the street. And that’s in like a, I don’t know, very, you know, forward thinking area of New York, right? Right outside New York City. And so like this stuff exists, with respect to local permits and local codes all over the place. And it’s just dumb, right? And so, you know, part of the challenge here is that it’s going to be very, very difficult to achieve the goals that, you know, at a national level we need to achieve over the next decade or two with a lot of dumb local policy in place. And really, the only way to change local policy is for the constituents of that town or that county to go to their representatives and demand action. And that happens at the homeowner’s side of things. And that happens at the local jurisdiction side of things. But look, it’s hard, right? Like all of us are busy and going to a homeowner’s association meeting and making a big thing about solar, you know, takes time and that kind of stuff. And I think that’s like one of the biggest reasons that some of these stupid policies continue to exist. It’s just like no one has the time to deal with them. And we’re gonna make time or we’re not.
Matt DeCoursey 30:02
You know, I gotta say, on a personal level as I generate power, and I fill up my little batteries, and, you know, I, you know, I’ve got like a pretty big one, you know, I’d say about 4000 Watts, I can charge some stuff with it. It’s kind of fun. It’s kind of fun. Like, I mean, I maybe I’m just a geek when it comes to that stuff. But I like enjoy collecting the power of the sun and charging different things with it. So try it out, folks. There’s a lot of stuff out there. Okay. So
Tim Hade 30:29
Just one one thing before we move on, and I think this is really important, right? Like, um, one of the things that amazes me, right is if you think about how important electricity is in our lives, right? Like, I can’t get through a day without electricity. It’s just not like it would, it would be terrible, right? Every time I have a blackout, like, I freak out, my kids freak out, my wife freaks out. And that’s true, like, pretty much across the country. As you think about like how important electricity is in our society, and how few people take the time to understand anything about it. And it’s like a very weird dichotomy, right? And so look, I think, like, that’s one of the things that I always encourage people to do is like, most of this stuff isn’t rocket science, right? They’re like, you get down to the very granular or level of electricity, and it kind of is rocket science. But understanding the basics, like, I don’t know, spent 30 minutes on YouTube, and you’ll get it. And I think once once you start to get into this, you realize, like, this is really cool stuff and it’s fun. And you can really, you know, understand how your home operates, how your vehicle operates. You know, how you can do that in the best way for yourself and the planet and all these things. And most people who go down that road end up, like enjoying it and get a lot out of it.
Matt DeCoursey 31:46
Yeah, now, you know, we’re talking about like future innovation and things related to clean energy. There’s a lot of renewable energy targets and mandates that are set in the future. You know, just meeting like, there’s a big push to get away from fuel combustion engines, and other stuff like that. Now, what I’m hearing with red tape and the problems getting in the way, and then these mandates that doesn’t seem to jive, right? There seems to be a disconnect there. The you know, as you mentioned, like capitalism, and startups and innovation, usually find ways to solve that. What kind of interesting innovations that aren’t really mainstream now, do you think we’ll see over the next 10 years that will fascinate all of us?
Tim Hade 32:32
Yeah, so there are a lot, right? Um, so um, look, I think generally speaking, right, like, we’ll go back to sort of the framework if we have 85% of this figured out, right? So when I say we have 85 percent of this figured out, right? What that really means is, we know how solar works, we know how wind works, we know how batteries work, one kind of battery lithium ion batteries work. We know how hydro works, we know how nuclear works. And you combine all those things together. And that solves about 85% of the decarbonisation problem in the United States. So where all the innovation and excitement is from, like, a technical standpoint, is addressing that 15%. And there are a few areas that I think are particularly interesting. So the first one is nuclear. So there are two types of nuclear reactors that are fission reactors, which is what every nuclear plant in United States is today. We haven’t built one. We just commissioned the for all time, right? Yes. So we just commissioned one in Georgia. I think it was like 5,000% over budget and like 10 years later than it was supposed to be. But part of the problem is we forgot how to build nuclear plants in the United States. Like, we literally don’t have the workforce that knows how to build it. And so trying to figure out how we can deploy fission reactors in new and novel and cost effective ways is like a business model challenge that a lot of really smart people are talking about. Inside the fission category, there’s a category of small modular reactors. So if you think about how every aircraft carrier, the US Navy operates runs, it’s with a small modular reactor. And so the idea is why can’t we pull those out of aircraft carriers and use them to power towns and the technology there exists? It’s a regulatory issue. And I don’t know there are some legitimate concerns about having nuclear reactors close to population centers. So small modular reactors is one on the fission side. Fusion is the holy grail of clean energy. So if we can figure out how to produce net positive fusion reactions. So, fusion reactions that produce more electricity or more energy than they consume, then essentially what that means is we can turn seawater into power and the climate change problem is fixed. You know, the joke about fusion is that, you know, fusion has been 10 years away for the last 100 years. And, and, you know, there’s some really innovative companies in the space and some really forward thinking investors who are investing a lot of capital infusion companies right now. And I’m not smart enough about nuclear physics to know, like, what the timeline for commercial viability is at this point. But I know there’s a lot more optimism in the space than then there is than there was a while ago. So that’s the second area. Third area is battery chemistry, right? So I briefly touched on this before. So with EMI on does like a very good job at what’s called short duration storage. So storing energy for hours. If we want to really optimize solar and wind, we have to be able to store energy for days and weeks and months. And there’s a ton of activity in the startup space with companies focused on trying to figure out new and novel chemistries for doing that. If anyone wants, like my favorite company doing that as a company called Form Energy, which is working on an iron air battery that can store energy for months. And there’s a bunch of other like, really, really cool companies in the space, they’re doing that. So battery chemistry is your number three. And then the fourth thing is software. Right? So if you think about the grid of the future, it’s going to be a lot more distributed than it is today. Right? So quick history lesson on power, how we’ve always built the electricity grid is we build really, really big power plants, and then we connect them to your home or your office with this really complex set of wires. What this is going to look like in the future is it’s going to be a two way street. So most buildings are going to have solar and batteries. And there’s gonna be wind sited locally. And it really creates a much more distributed infrastructure, which is good for a lot of different reasons. One of the biggest barriers to that proliferation is software challenges, right? So as a grid operator, you have to be able to balance supply and demand in real time. That’s easy to do when you have eight power plants, it’s harder to do when you have eight million power plants. And so there’s a real big software opportunity in terms of like what they generally call distributed energy resource management systems, or DERMS. And some really, really cool companies that are working in that space right now. And so those those would be like kind of the four areas I would highlight. Oh, and then the last thing, this is like more of a sort of a niche thing. But geothermal energy is like really, really exciting. One of my one of my friends runs a company called Furbo Energy, which is one of the companies I’m like most bullish on in the space. And you know that that’s another type of energy generation technology that has like a ton of potential. We haven’t quite figured out commercialization yet. But I think people are getting pretty close.
Matt DeCoursey 37:37
Yeah, there’s, there’s quite a few. You know, you look at there’s a lot of rural properties around where I live that are geothermal, meaning they’re just capturing the heat. Yeah. And the energy that, that that is naturally right below your feet. And yeah, that’s interesting. Yeah. On the software side of things, which is where I spend most of my my days and time working, there are you are right, there’s a lot of interesting innovation that the startup that we went and visited out in San Francisco. I mean, that was an AI solution that was essentially could help your entire city understand like you, okay, so you have peak times. In the middle of the night, it’s not the peak time, that’s when all the lights are off, for most people and stuff like that. So there are times when it’s cheaper to charge and there’s times when you need to charge because if you plug too many things in, it’s gonna make something go pop, you know. And you hear about like the rolling blackouts. Now. I’ll tell you what, so you talked about the difference in there. So having 300 employees in the Philippines, where they call them brownouts. I mean, it’s it’s a real thing, like it’s a rolling thing. And and, you know, like, it’s not uncommon. So we actually have to have our office and everything set up in a place that has like backup generators in the building. So we don’t end up with massive disruption. And, and that’s, that’s a cause that’s overloading of something that’s just essentially shoving too much stuff into one spot. And, you know, and it’s really interesting as well, I think there’s a huge level of commercial viability. So I have a friend here in Kansas City who restored an old arena, right? Like, we had the old arena, and they build a new one. And then what do you do with the old one, and he bought it for $1? Right, because it was gonna get torn down. Or I spent $50 million rebuilding it. And then his biggest problem was that he didn’t really he thought about but it was always bothering him was, man, it takes a lot of energy to cool the place. Yeah, in the summer. And you know, and he was, you know, I’m sitting there with him, and he was, you know, messing around with some application that like train has trained me and tra any gear maker and, you know, I’m sitting there thinking I’m like, you know, like, because, I mean, at home, even something as simple as like a nest thermometer may adjust and change that stuff for you. But if you look at just these little instances, and there’s not a silver bullet solutions effects is all of this. But some of these, these software solutions are great for us as consumers too, because they put more money in your pocket. And they’re not just being doing wasteful things, you know, the flip side. So in arena for an event you have tomorrow, you have to turn the air on for that today, for sure. Yeah. Yeah, it’s not just like, Hey, turn it down a couple of degrees. And if you don’t do it, you end up with a bunch of people that never want to come back to your place because it’s 97 degrees in there.
Tim Hade 40:29
No, for sure, right? And the thing that’s, like, fascinating about this, if you like math, like this is an awesome area to work in, right? Because this is essentially multivariable calculus, right? How you think about optimizing the cooling system for an arena, right? Or how you think about optimizing the charging network for EVs in the community, right? You’re trying to essentially optimize across all these different parameters. And it’s really, really fascinating the, the things that a lot of software entrepreneurs in the space are coming up with. And like things like that, right? Where they’ll tell you like, you want to start cooling the arena, like this minute, right? And you want to run it for 14 minutes, and then you want to back it off for 12 minutes, then you want to ramp it up again for 14 minutes. And it seems like how can this possibly matter? And then you save 30 grand, right? This stuff happens all the time. And so you know, what we’re really seeing right now is the complexity of that math and the ability to solve complex math challenges in the energy space is being like turbocharged by AI. Right? Yeah. So we’re able to do stuff now.
Matt DeCoursey 41:37
Because most people like me didn’t make it to or through multivariable calculus.
Tim Hade 41:43
Yeah. And so now we have robots that do it for us. Right. And, and that that is that is accelerating the pace of change in the space already. And I think like we’re, you know, just on the frontier of that really starting to make an impact. So that’s going to be like, the really interesting part of the next, like, decade or two is, you know, we think we have a plan based on the technology that exists today. But we also have this like, underlying variable of AI coming that can potentially supercharge the timeline for deploying and optimizing all that stuff. And again, right, like, I don’t think anyone knows the answer, how exactly that’s gonna work. I think there are a lot of companies that are trying to figure out how to best utilize that right now. We’re in that group of companies. But the potential is fascinating.
Matt DeCoursey 42:30
Yeah, I agree. Yeah, a lot. Well, a lot of software. Once again, today’s episode, Startup Hustle, is brought to you by FullScale.io, where we have the people, the platform, and the processes to help you build a team of experts who work only for you. You know, a lot of smart people are doing a lot of smart things. So come challenge us. Go to FullScale.io. Once again, with me today, Tim Hade of Scale Microgrid. And man, thanks for doing what you’re doing. I really appreciate it. It’s, you know, someone’s got to tackle these tough challenges. And you know, I appreciate the spirit and vigor. Is there anything you’d like to say to everyone on the way out, Tim?
Tim Hade 43:11
Well, yeah, I guess, I guess two things. The first thing is you have the best transitions that I’ve ever heard. So I think
Matt DeCoursey 43:20
We’ll do that live this week. So yeah,
Tim Hade 43:23
FullScale.io has a great partner. And I will definitely check
Matt DeCoursey 43:26
around the company. So that might help. Yeah, perfect, perfect.
Tim Hade 43:29
But the transitions were fantastic. Look, I think the second thing is, if you’re an entrepreneur listening to this, who’s looking for something to do or a tough challenge to tackle, I promise you that climate tech has opportunities for you. This is the fastest-growing sector of the economy. Like many, many world leaders have sought, I’ve called solving climate change the greatest economic opportunity in the history of mankind. And we need a lot of help, like, things aren’t going great so far. And so, if you’re looking for something challenging to do, this is an awesome place to find it. And if you do it right, it can be both good for the planet and good for your wallet. And I hope more people come in and test themselves. But thanks so much for having me. This was a lot of fun. And hopefully, I can come back soon and give you guys a progress report.
Matt DeCoursey 44:18
Yeah, I’m looking for I’m gonna hit stop, so I can learn about that. 60% tax credit now.
Tim Hade 44:23
Amen, man. So you got it. You got to stack them, right? So there’s, there are three adders, right to the to the ITC. The first is what’s called the energy community. So that like you’re either in or you’re out. There are certain communities in the country that are losing fossil fuel jobs. And if you live in one of those communities, you got a 10% adder. So that takes you to 40%. The second outer is what’s called the domestic content adder. So that means that if you use solar panels that are made in the US, then you get another 10% tax credit. So that takes you to 50%. And then the final one is a low and moderate-income one, which you won’t qualify for, so you’re kind of capped out at 50%. But you know, for folks that are, you know, I think the thresholds like $75,000 a year of household income. For people who are below that, then you get another 10% on top of that. So yeah, we’re working with businesses right now that are getting 60% reimbursed, and a lot of residential homeowners are doing the same thing.
Matt DeCoursey 45:22
I left that record on because I felt everyone needed to hear that.
Tim Hade 45:25
There you go, man.
Matt DeCoursey 45:25
But now I’ll catch up with you down the road.