In the US, clean energy tends to get bogged down in red tape, but there’s one category that you can install immediately, with no one’s permission, because it plugs right into your wall outlet. This week, I chat with James McGinniss of David Energy about plug-in DERs — specifically, small batteries that commercial tenants can install without permits or landlord sign-offs. We explore the economics behind these micro-projects, look at how they aggregate into virtual power plants, and break down why this hyper-local approach could eventually outcompete massive utility infrastructure.
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David Roberts
Hello everyone. Greetings and salutations. This is Volts for June 3, 2026: “Are plug-in DERs going to spark a grid revolution?” I’m your host, David Roberts.
As Volts listeners have heard many times now, large utility-scale renewable energy and battery projects are being slowed to a crawl by a tangle of red tape, from glacial interconnection queues to permitting hassles to environmental review, and on and on.
Smaller-scale customer-side renewable energy and battery projects, collectively known as distributed energy resources, or DERs, move somewhat more quickly … but, unfortunately, not by much. They too have interconnection and permitting hassles, alongside the various and sundry soft costs that have been discussed on this pod so many times.
But there’s a new class of DERs emerging that are even smaller and that you can simply plug into a normal wall outlet without getting any kind of permit, interconnection, or regulatory approval. This includes so-called “plug-in solar,” which we covered on a previous Volts pod, but also small-scale batteries.
Plug-in DERs might seem, at first blush, like a kind of cute novelty item, fun but irrelevant to the larger energy picture. But my guest today — James McGinnis, CEO of David Energy and co-founder of the DER Task Force community and podcast — believes that take is wrong. Dramatically, fatefully wrong. He believes that plug-in DERs are eventually going to scale to a cumulative size larger than bigger DERs, that they are going to put a rocket boost under the small-d democratic revolution in energy that DERs have long promised.
McGinnis has been selling plug-in batteries to small businesses in New York City, who are using them not for any high-minded green reasons, not even for resilience like the more expensive home batteries, but simply to reduce their electricity rates. And business is booming. We’re going to talk all about the merits of plug-in DERs, the market for them, and why he thinks they are going to spark a grid revolution.
With no further ado, James McGinniss, welcome to Volts. Thank you so much for coming.
James McGinniss
Thanks so much for having me. I’m super excited to be here.
David Roberts
I listen to your podcast, I’ve heard a lot of your talks, and you are deep in DER world. DERs, as you affectionately refer to DERs. That’s right, yes, DER world, DER-pilled, etc. For those in the audience who are not fully DER-pilled and who are not totally familiar with distributed energy resources, let’s just do some definitions. As I understand it, there’s DERs, and then within that there’s a smaller class of what we call permissionless DERs, and then within that there’s a smaller class of plug-in DERs, which is what we’re talking about today.
Let’s start by defining our terms. Start by defining what DERs are. This is, I think, a deceptively complicated question. What is your personal definition of DERs?
James McGinniss
I’m going to attempt to give you a definition. I also think as time has gone on, I’ve continued to get surprised about what a DER is. I reserve the right to change my mind later. It’s a bit of “you know it when you see it.” Most famously, Kiran from Arcadia told me an induction stove was a DER and I laughed him out of the room. Then I learned about Impulse Labs and copper and battery-embedded devices, which kicked off this whole permissionless conversation. I ended up eating my words that that was in fact a DER.
But I would just say that the property or the principle that is true across DERs, or most exciting, is that you are essentially siting supply or capacity next to demand. That capacity could even be the demand itself. You could have a programmable thermostat or electric vehicles that you shift load with. At the end of the day, it is supply or capacity located where the customer is consuming power. That property of locating supply next to demand is what I think makes DER so powerful.
David Roberts
In your mind, whether it is behind the meter or in front of the meter, there are DERs in both cases. You’re not a behind-the-meter guy?
James McGinniss
No, I think if you look at a lot of what some of the current frameworks have started to do, like VDER or avoided costs or non-wires alternatives, placing solar and storage on distribution feeders, like community solar, it could be a 5-megawatt system — that’s a DER because it’s helping reduce transmission and distribution costs, or could potentially if you deploy them in the right way.
On the other side of things, you can have gigawatt-scale DERs. You have large data center-sited solar, storage, and gas primarily. Duncan on the DER Task Force wrote that awesome off-grid white paper, which isn’t only about being off-grid. You can have fully off-grid, you can have grid-connected systems. You can have them front of the meter, located next to a data center, all that stuff. If you’re augmenting how you’re distributing power on the grid, those are DERs in our mind. We look at DERs as everything from one of these small 400-watt plug-in solar systems that we may talk about all the way up to a gigawatt-scale system behind the meter at a data center.
David Roberts
Interesting. It’s mainly about locations, which makes sense since the word distributed —
James McGinniss
Colocation. That’s the sort of property that excited me a decade ago. I would say, though, that I love all DERs. I get more and more bullish on distributed solar and storage every year and think that the lion’s share of what we think of as distributed capacity and supply will be solar and storage.
David Roberts
Amen, brother. That is the thesis of this podcast. Within DERs, there’s this class of permissionless DERs, which is distributed energy resources that you can just install without getting permission from any sort of regulatory body. What is included in that class? What all falls in there?
James McGinniss
It’s funny, I think Duncan coined permissionless on one of our podcasts a few years ago. At the time, we were thinking about two applications in particular. One was Impulse Labs’ battery-embedded stove, where that is a plug-in DER. Then Electric Era’s DC fast chargers that have batteries that keep you from needing to upsize an interconnection to site a DC fast charger — that’s Quincy at Electric Era. We said, “Oh cool, you can deploy more DC fast chargers without interconnection upgrades or permission to interconnect.” You may need an interconnection there. I’m not entirely sure, but at the time, in the early days of this, we thought anything that skirted the need for complex, expensive, and permissioned utility upgrades was permissionless.
David Roberts
Along the lines of the Impulse stove, what Jigar Shah is very excited about is Carrier is going to start embedding batteries in air conditioning units.
James McGinniss
That’s right.
David Roberts
And they sell kajillions of those a year.
James McGinniss
Yeah.
David Roberts
And you do not need a permit to plug your AC in.
James McGinniss
That’s right.
David Roberts
I think you could add some of this off-grid, like for data centers, but not just for data centers — like a microgrid or whatever. You can put more and more batteries on your microgrid and as long as your interconnection point stays stable, you don’t need additional permission to do that.
James McGinniss
That’s right. I was going to joke that I even think xAI, their data center was maybe, as I’ve read about it since, maybe too permissionless but —
David Roberts
You can also just do it even if you’re supposed to get permission. You could just do it illegally. I suppose that is a subcategory.
James McGinniss
I appreciate the impulse to just build something more than waiting six years for an interconnection. As long as it is being done safely and it makes sense ultimately.
David Roberts
I like the wild and woolly approach. It would just be nice if it were being done in service of renewables and batteries instead of a bunch of —
James McGinniss
Yes, I definitely agree with that.
David Roberts
— jet engines on tractor-trailer beds.
James McGinniss
Yeah.
David Roberts
That’s permissionless. Within permissionless there’s plug-in, which is what we’re talking about today. Plug-in solar — we covered that pretty extensively on the pod the other day. It’s just these small-scale, usually single panel or two. Then there’s also plug-in batteries, which is what you are mainly doing. What counts as a plug-in battery? If you’re going to put a Tesla Powerwall in, you have to get permission for that. That’s a scale of battery that triggers some regulatory oversight. How small of a battery do you have to get before you are avoiding these regulations — when you can just do it? What size of battery can you just plug in at will?
James McGinniss
It’s interesting because during your intro I wanted to make an objection to calling plug-in small. I would have said the same months ago, but I don’t think plug-in is small necessarily. I’ll expand on that in a moment. Plug-in to me is just you plug it directly into a 120 or 240-volt outlet or any type of outlet. But it’s using existing grid infrastructure and interconnection points we have, which is most commonly the 120-volt outlet.
David Roberts
The insight here, which I guess is controversial but is the core insight — all this agita about finding usable interconnection points. The point here with plug-in stuff is we’re surrounded by already permitted interconnection points. They are called outlets.
James McGinniss
That’s right. Through this plug-in journey over the last year, I’ve had multiple points during it that have blown my mind or re-DER-pilled me to an extent, gotten me even more bullish on this stuff. The first one was just that idea that outlets are preexisting bidirectional interconnection points. Bidirectional is the key here. You can push power back into a circuit. That is totally allowed. That’s some placement point to the grid.
David Roberts
It’s allowed in some places. We’re going to get to that in a minute. Before we get too far in, let’s back up a little bit and just tell us what David Energy is. Tell us what your company does. Tell us what you’ve been doing since 2020 and what is different that you’re doing since January of this year. January of this year, you launched this plug-in part of things pretty recently. Just give us a smidge of background on what David Energy does.
James McGinniss
Maybe I’ll give you the overarching — what the mission has been from day one, which is to run the grid 24/7 on clean energy. By that we mean we are a licensed electricity provider. We can choose our own sources of supply. Our goal is to prove that it’s possible to run our book 100% on clean energy in real time, physically time-aligning supply and demand, not offsets or anything like that. The reason for that is we think clean electrons are the cheapest electrons by far. If we can do that, we’re going to be the cheapest commodity supplier. If you’re the cheapest commodity supplier, you can grow incredibly fast and build a big business.
David Roberts
You’re a retail energy provider, in other words. A home or a business in a place that has retail competition, which is not everywhere, but in a place that has retail competition and people can choose their energy suppliers, you are an energy supplier and your distinction is you’re the clean one and the cheap one — or that’s the idea.
James McGinniss
Something confounded me early on in the journey, which is solar and storage were becoming the cheapest electrons. If you go and buy a “green product,” which is basically a REC product, it was a premium product. We’re like, why is this the cheapest source of power? If you want to buy it from a supplier, it’s more expensive than the alternative.
We think clean is cheap if you’re not doing offsets, if you’re doing it on the real-time demand-supply matching basis day in and day out. This is where the problem that has fascinated me since 2015 probably is everyone talking about intermittency and how do you manage lots of solar and storage or wind on grids? How do you actually run grids with very high penetration to these? That problem has been what we want to solve through just doing it as a licensed supplier.
David Roberts
Are all your offerings 100% clean? All your customers are getting 100% clean power today?
James McGinniss
Today, no. That’s the goal. We could talk about what we’re doing now. Over the last few years, we launched a software product to our customer base, which is small businesses, which we’ve viewed as very underserved in this market. Think multi-locations, restaurants, gyms, cafes, laundromats, stuff like that, whereby they get access to great features — like thermostat management and bill auditing and community solar. That product is free to them if they’re buying their energy through us. The reason we did this is as early as we started, there was not a lot of solar and storage to go out and get. The path to powering our entire book on clean supply was daunting.
David Roberts
Because in some sense you’re buying wholesale power and selling it to customers. You’re dependent on who’s producing the wholesale power, for the most part, right?
James McGinniss
We get to choose who we go and buy that power from. What has changed recently is we see a much stronger path in the near term to get to very meaningful penetrations of clean energy supply within our own book over even the next year because of our ability to deploy plug-in batteries and the proliferation of solar and community solar. You can think of it as up until last year all of our supply was not clean. This year we’re starting to get some clean, and every year that goes on, our percentage is going to increase towards 100.
That’s our goal. The more solar and storage we get under management, the cheaper our power is going to be and the more we’re going to be able to grow. The way that expresses itself, and you mentioned this, what we’re doing today is we go to customers and we say, because there’s so much value in these plug-in batteries, if you let us install plug-in batteries and take over your energy supply, we guarantee that we will beat the utility month over month — you will pay less to, in this case, Con Edison than you would have without David Energy, where we’re taking over the supply side of that bill.
David Roberts
And they’re not paying for the batteries? The batteries are effectively free for the customer?
James McGinniss
Yes. There’s no CapEx for them. There’s not even long-term lockup, which is one of those other “aha” moments, remarkable properties for us, which is you can unplug the battery and move it very easily, meaning you don’t need to get the customer to agree to a 20-year mortgage-like lease on their home or the land they own or something like that. There’s not even a long-term lockup for this. If we come in and install these plug-in batteries, you’re going to save money every month relative to what you would have paid the utility.
David Roberts
I have a bunch of questions about that, a bunch of questions about the economics and various other things. Let’s start with the batteries that you’re selling today. How big are they and what do they look like?
James McGinniss
We’ll work backward to my small objection at some point.
David Roberts
Yeah, we’ll get there.
James McGinniss
The batteries we are deploying right now you could classify as small. They’re just under 2 kilowatt-hours. You can configure them as a 2-hour battery. We can do multiple of those in sequence. Our standard install will put a few of those in series and sum up to something closer to a Powerwall.
David Roberts
I was looking at the pictures — they look like a toaster. The size of a big toaster.
James McGinniss
That’s right.
David Roberts
We’re heading toward big here. Let’s not dis on small. Which means that you can tuck them anywhere in a business. You can put them in a basement, you can put them on the bottom shelf, you can tuck them up above the cabinet. Almost any business will have room for a couple of these, right?
James McGinniss
Yeah. The first objection we always hear from a New York City restaurateur is, “There’s no way I’m going to have space for that.” We have a 98% success rate on installs. You can always find space, which is great. That’s something that’s nice about the current form factor.
David Roberts
It’s interesting in particular that you’re doing this in New York City because New York City is legendarily highly regulated. You can’t even install a Tesla Powerwall in New York City, can you? Because of the fire risk. There are regulations on energy storage systems in New York City right now. It seems like your batteries are too small to trigger those regulations. But I was looking into this and it looks like New York City has issued some new rules that lower the threshold down to 1 kilowatt-hour and yours are bigger than that. I’m curious, how are you sneaking past regulations here in New York City?
James McGinniss
It’s interesting. One thing that’s important to recognize is that it’s not that you can’t install, it’s that there is so much red tape often in even getting something approved that a lot of folks have chosen not to do that and just take their efforts elsewhere. There are a few different companies out there, from Every Electric or Copper Stoves, that are doing batteries in this way.
There are a few aspects to it. One is that UL9540 and 9540A historically were not certifications that these consumer-level batteries were going after. That is the gold standard that FDNY and other jurisdictions take as what is necessary in order to be able to get a COA and do these installations. The other thing, and you had a recent podcast with Cora from Bright Saver, I think that’s what you were mentioning before, is that the way that rules are being written in many parts of the country, it’s clear that a lot of these use cases are not even being contemplated and that there’s a certain amount of gray area in what can and cannot be done.
David Roberts
That’s what I was trying to get at. This is a “let’s do it and if we have to, ask forgiveness later rather than ask permission up front.” There’s a bit of “let’s just put a bunch of these out there and get them working” rather than waiting for these regulations to resolve themselves completely.
James McGinniss
We don’t think the regulations here or in a lot of places are clear for this type of application in particular. On top of that, the gold standard that these jurisdictions care about are UL9540 and 9540A, which the products we’re using do have. What we focus on above all else is that what we’re doing is compliant with NEC, UL-certified products. It’s completely safe the way that we’re doing it. We think as those gray areas are worked through, the intent behind the rules is driving towards that over time.
David Roberts
These batteries that you’re putting in small businesses — it doesn’t seem like they’re big enough that if the power went out you could run your business on them. That’s not the pitch here. The pitch is mainly reducing peak demand charges. Maybe just explain briefly, what is the peak demand charge and why is it helpful to shave a restaurant’s peak in order to avoid it?
James McGinniss
There are certainly some customers that we get into that level of detail. Primarily, customers don’t get into that level of detail. The pitch is, “We are going to save you money against Con Ed,” and that’s enough.
David Roberts
The pitch to me, a podcaster — yes, great,
James McGinniss
But we do get into the demand and supply side of the bill, where on the demand side or the delivery side, they’re still being billed by Con Edison. They’re assessed a charge by their 15-minute interval peak every month — the single 15-minute interval where they have their highest instantaneous draw from the grid. We predict those peaks and we discharge the batteries during those. That allows us to say, “If you didn’t have us, your peak demand would have been 12 kilowatts instead of 10 kilowatts,” or something like that.
The other side of it is a little more complicated. Because we’re the energy supplier, there is responding to real-time prices, there is responding to peak capacity tag events, which is a whole other can of worms that we can get into, but sets how much they have to pay into the capacity market. There are demand response programs at the utility level and at the ISO level and the customer does not need to think about any of that. We take care of all that complexity on the back end and just say, “This is the supply rate you would have paid Con Edison and it’s lower because of some aggregate pool of money that we’ve generated with the battery and are giving them a discount on the supply rate to do that.”
David Roberts
In a sense, lots of batteries are doing this and I think this is a familiar concept to listeners. It’s just arbitrage. You charge the battery when power’s cheap and you discharge the battery when power is expensive. You’re doing that arbitrage on a micro scale within the premises, within the business. It’s micro arbitrage. The principle is the same. You’re shaving peaks, you’re responding to demand charges, you’re enrolling in demand response programs. It’s all the same thing bigger batteries do, just on a micro scale within the premises of a customer business. Is that fair?
James McGinniss
Yeah, and by micro I just take it to mean — I’m going to continue talking about small and micro stuff. I take it to mean that we’re doing it through the demand. An important note here is we are not exporting through these batteries at all.
David Roberts
We’re going to get to that for sure.
James McGinniss
You could, and that is a lot of the great work that BrightSaver is doing, and I think it is particularly relevant for the smaller consumer applications in which they are talking about.
David Roberts
But you’re not currently exporting any power into the grid. All this arbitrage is within the premises itself, just moving power around within the customer side?
James McGinniss
That’s right. Because we’re the supplier, we pay that customer’s energy obligation on their behalf. If we lower that energy obligation during high prices, we can generate savings by doing that, which you can only do if you are the energy retailer.
David Roberts
There is some CapEx involved. You’re buying these batteries. How long does a customer relationship need to last for you to pay off that CapEx of buying the battery yourself and eating the cost of the battery yourself?
James McGinniss
We think about it as the non-CapEx expenses — traditional CAC, or even there are some minor setup costs for the installations that we’re doing, but they’re only 10% of system costs instead of 50-plus percent, which is what you typically see. That doesn’t necessarily have to be true. We do send a licensed electrician on site and create our own dedicated outlets for the batteries, which is the gold standard of doing this very safely, which is the main focus that we have in doing this.
David Roberts
That’s some cost and the batteries themselves are some cost. Then there are savings over time. Is this a loss leader in order to acquire customers or do those costs get paid back to you? If so, how long does that take?
James McGinniss
Without ITC or anything or providing any savings to the customers? Just the raw value of the battery is something like three years and as we optimize that, we think that drops even more. The cost that we want to recover are the cost of acquiring that customer and the minor cost of installation, which may be a much shorter amount of time — like a year. If that customer were to churn, we can go pick that battery up and move it to the next location.
David Roberts
It’s your battery?
James McGinniss
That’s right. We could do that in a day. Think of the density in metropolitan areas. I unplug it, I pick it up at one restaurant and then I move it to our next interior installation, of which we have a big queue. Then you start running the meter on that side of things. The cost that we focus on recovering — there are even contractual things you can do around this — is the initial setup cost and the cost of customer acquisition. We only need a customer for a couple of years for that to make sense, which would be the life of a traditional software or SaaS customer.
Because we’re able to move the battery, we have the full useful life — it’s reported as 15 years, but it could be even longer — to recover the costs, to pay off the CapEx of that battery. It’s just an asset that we own that we can place where we want.
David Roberts
One of the really cool, maybe even one of the coolest aspects of all this is that you can strike these deals with tenants rather than landlords. You don’t have to get the owner of the building involved in this. It is a tenant relationship, which is cool because, as you say, that’s an underserved — this is a problem in multifamily housing too, which we will touch on in a minute. But what if landlords do butt in? Do they ever object to having batteries on site? People are very paranoid about batteries for a lot of different reasons.
Or if there is a fire in the business, even if the batteries are not involved, is insurance going to come in and see a battery and freak out? The tenant can do this, but are there risks from landlords and insurance companies and that kind of thing?
James McGinniss
Yeah, and I think this even goes back to your question around regulations. We don’t think as much about the regulatory framework that BrightSaver does because we don’t export and are not currently. When I said you’re allowed to do this currently under code, I’m thinking NEC, UL, not requiring an interconnection agreement, things like that, because you’re not exporting. Certainly, yes, batteries — the most likely scenario is they could become a scapegoat for other problems that happen on site, which we expect to happen over time. Any new technology is going to encounter that.
David Roberts
New York City has had some negative experiences with battery fires. Some paranoia is not completely unfounded.
James McGinniss
But if you’re going to buy a non-UL-certified product from China and then plug 20 different e-bikes into it with 40 surge protectors, that can probably be an issue. That’s what we mean about this application not being contemplated really and how safe it truly is. We think deploying in the way we are is incredibly safe. It’s possible that a local jurisdiction or a landlord says, “Hey, not in my building or not in this region,” or something. But when you look at the broad scope of where this stuff is headed over time, I think of those as minor speed bumps because —
David Roberts
Have you run into that yet? Has anyone?
James McGinniss
We have not, no. All that said, I want to emphasize your point that this being accessible to tenants is one of those other “aha” moments — a remarkable property of plug-in technologies. It also gets into the tenure thing I mentioned. You can equipment finance this stuff. You don’t need a 20-year asset-backed securitized loan with a creditworthy offtaker. You can look more at, “Hey, what is this unit? Can it be redeployable? What is the resale value of this?” That property, on top of not needing a permit, on top of not needing landlord approval, is what removes all the friction from deploying these.
David Roberts
Yeah, and vastly expands the customer pool. Another thing — I was trying to think about risks to the unit economics here. As you say, this is not customer-facing. All you’re really telling the customer is you’ll save money. But this is dependent on arbitrage behind the scenes. If Con Ed changes its tariff structure or reduces peak demand charges, is that going to hurt you? How dependent are your economics on the existing tariff structure?
James McGinniss
Not on the supply side because that would be a much more substantial change — deregulation at the state level, at the PSC level. What deregulation means is we are allowed to enroll that meter. It is our meter with the New York ISO and the interval data financially settles to the ISO data and we have that financial obligation. There is nothing on the supply side that you could change the tariff or something. Con Ed can offer their own tariff for their own supply products.
In our minds, they would simply compete with the products that we’re able to offer. They typically don’t spend much time on it because they’re not allowed to make money on it. They can only make money on deploying infrastructure.
We do benefit from peak demand charges. I suppose it’s conceivable that could always change. It’s so far flung that it’s not really a risk that we think about. In residential customer classes, for example, they’ll have volumetric delivery charges, not peak demand delivery charges. That can impact your ability to recover it. If you have solar, though, it can enhance it because it means if you’re pushing volume in, you’re avoiding those charges.
All of this is — there are more elegant designs around tariffs and prices than others. We think the base level framework in all the major ISOs like PJM, New England, New York, ERCOT, where we’re focused over time, give us the framework to deploy and have really solid unit economics.
David Roberts
You think you’ll be able to beat Con Ed for the indefinite future?
James McGinniss
Yes, and we should beat it more and more over time because as we get closer to 100% clean. One thing we didn’t talk about in the unit economics is we are starting now to deploy our own solar or aiming to this year.
David Roberts
The plug-in variety?
James McGinniss
That’s something that we’re starting to explore, but we would also do the traditional front-of-the-meter stuff as well as our own supply source. As we get more and more of that, we beat the utility by more and more, and that can lead to more savings for customers or more margin for us.
David Roberts
Another question about the cleanliness of all this. You’re just shifting around. The cleanliness of it to some extent depends on what’s on the grid, what’s available on the wholesale level. As I understand it, most of the nighttime power in New York is gas. Is this necessarily cleaner — it’s cheaper, for the reasons we’ve discussed. But is it necessarily cleaner? In some sense you’re dependent on what’s on the grid, are you not? Less so over time as you install more of your own, say, community solar or whatever, but currently.
James McGinniss
I would say two things. One is the point you just hit, which is deploying storage gives us an ability to manage solar in our book — manage the exposure that the intermittency brings.
Even if the solar is not on site, we’re effectively storing our own solar in our on-site batteries. At the end of the day, ISOs are just big financial markets. You have pluses and minuses. You have sources and sinks exporting power or pulling power, producing or consuming. That’s one big piece of it — this storage will allow us to deploy solar.
The other part of it is that we use some very dirty peak sources in New York. We use fuel oil, we use nasty stuff when things get really bad. If we’re discharging during these peak times, we’re avoiding some of the dirtiest and most expensive resources out there.
David Roberts
Almost always the customer will be getting cheaper power than they would on Con Ed’s plan, but also cleaner power.
James McGinniss
That’s right. We don’t talk a ton about the clean now because how clean it’s getting is going to strengthen over time.
David Roberts
This is a good place to pause and emphasize this because I’m not sure we emphasize it enough up front. You’re just going to a customer and saying, “Hey, I’ll give you cheaper power. From the day you sign up, you’ll get cheaper power.” That is a pitch that is sufficient unto itself and requires no additional motivations. You don’t have to be green, you don’t have to care about anything else. This is why this is intriguing to me — for a long time trying to sell DERs, you need people who care about cleanness. You need people to care about resilience. You need these other motivations to overcome the financial premium. Here it’s just a pure cost play. Cheaper power, period, full stop.
James McGinniss
Yes. You don’t even have to mention that it’s going to get even cheaper the cleaner you get, which is what we’re doing. Psyched about that. I would love to emphasize that resilience and sustainability have been marketed as premium products and that has been where DERs have had the most success.
Of course there are savings pitches out there, but it’s unclear in many cases whether those customers did save money because it’s a 20-year agreement they’re signing to and there’s some forward projection of power and you have to believe in inflation, escalators, and all this stuff. We just say, “In a single month, if we do not save you money, you can leave and we will come pick up these batteries.” I think that’s something very new as well.
David Roberts
Let’s now talk about feeding back into the grid. You are not feeding power into the grid through these outlets because although you say it is possible, it is in fact illegal to do so in most places. In the plug-in solar pod, we discussed how Utah has pioneered allowing a little bit of feedback into the grid. How much of a restriction is it on you — on the size and number of batteries that you can install on one of these premises — that you can’t currently legally feed back into the grid?
Were you allowed to feed back into the grid, how much would that improve the systems that you are able to install? How much of a restriction is it that you cannot currently?
James McGinniss
We think more about the AHJ — like DOB or FDNY or those types of regulations — more so than the exporting one. The reality is, our customer peak demands are quite large as commercial. They range from 10 kilowatts if you’re a small cafe up to north of 100 kilowatts, and you’d have to deploy a lot of storage in order to be exporting. Even with no constraints at all, that physical reality — it’s unlikely that we’ll export unless we’re doing something to your point earlier about plug-in solar, which also does not need to be small. We can talk about that in a bit.
What we’ve found is — this is another mind-blown moment for me — when you look at the National Electric Code and UL certification and how, outside of whatever jurisdiction that you’re in, just what is safe physically to do, you can do hundreds of kilowatt-hours in buildings because there’ll be multiple 200- to 400-amp panels. Each of those — there’s the 120 rule — and you can push a lot more power into them than you think, not just these little batteries. We’re keeping things small because of the current environment that we live in.
The physical, safe way to do it — I see paths to having, imagine in every panel on a commercial building you have a stack of these batteries like a server rack, and they are all plug-in based. You are not just doing one giant system on the roof, which has totally different safety and weight considerations and needs permits, etc. When you think about these metropolitan areas, you could imagine solar on every balcony, solar on the roof, storage on every panel, and they are all plugged in.
You’re talking about megawatt-scale deployments. From that perspective, I don’t think it’s small, but we’re not doing that right now. The bigger constraint is not necessarily the exporting because the peak demand on these buildings can be quite large.
David Roberts
You’re saying you don’t need to export back into the grid to scale these systems up a lot?
James McGinniss
For this commercial application that we’re focused on, that’s right. Obviously the original — you think back to Impulse, they were like, “Okay, let’s plug a battery into a stove and now I don’t need electrical work.” Now we’re looking at this whole balcony solar movement. David Energy is in this new category of commercial plug-in deployments. This is also where you start bleeding into plug-in versus permissionless — it may not be a 120 or 240-volt outlet, but the idea of deploying solar and storage, we don’t understand all the form factors yet.
The reason I’ve been harping on this small thing is you can do pretty large installations that are not exporting and are plug-in.
David Roberts
In a big customer? In a large size customer?
James McGinniss
Yes. Big customers — plug-in can be a superior means of deploying storage than a traditional system from the techno-economic physical layer and what is currently allowed under National Electric Code and the UL certifications.
David Roberts
When you say big, you think for an individual customer you can reach the same scale that they would get by having a full-on permitted rooftop solar installation and a full-on permitted large-scale battery. You think you can reach that same scale with plug-in legos?
James McGinniss
The solar one seems a little more unlikely. At some point you should just do a proper install and make sure it’s wind-rated and interconnected and all this stuff. Solar is producing so much during the day, it’s probably going to be exporting too. The point of the plug-in rule is if you’re only exporting a little, you don’t need an interconnection agreement. If you’re exporting a lot, you should probably have an interconnection agreement. I think there’s a limit there. When I think of floors on buildings and how many panels are currently available and these preexisting interconnection agreements, I think it’s very possible you get to a bigger installation doing that.
All regulatory questions aside, physically that’s better than a rooftop or ground-mount storage system. If not bigger than the traditional way, certainly quite big. I think that’s even true of the solar side. Raya Power out there is doing really cool stuff where it’s not quite balcony — it’s its own self-ballasted system that could be a couple kW and I could totally see that being on New York City roofs.
David Roberts
I find the subject slightly vexing because when I talk to Cora, when I talk to the plug-in solar people, talk to you, everybody’s a little, “Backfeed into the grid is no big deal. Let’s just permit this.” I know there are people out there crusading to change state laws on this to allow this. But then I hear from electricians, master electricians, and they’re like, “Hold on now. There are all these risks from backfeed.” I’m sure you’ve heard the whole litany of risks. How are we, electromechanically ignorant onlookers, to assess this question?
Who’s got the right of that? How do you think about the safety of backfeeding?
James McGinniss
I’d say there are two components and I’m not an expert on this. I would definitely defer to the BrightSaver folks. One real concern I’ve heard from utilities is that if there’s a grid outage and there’s a line worker out working and because of backfeeding, a line is energized that they don’t know or expect because from the utility’s perspective, that line is down. That’s a danger. I think that’s quite manageable. For example, even in the batteries we deploy, if the grid goes down, they trip off. There are ways you can do this with any sort of — the way you’re configuring these systems.
The other one would be, I understand the utility desire to understand how much supply and capacity is being deployed on a given feeder, for example. If you were to raise that limit from 1.2 kW up to 50 per home, and everyone was doing it, you could be pushing a lot of power onto a distribution feeder just in normal operation. I think that’s a reasonable concern as well. That gets into, up to a certain amount of capacity deployed, do we need interconnection per system or could it be more of an application where you’re like, “Hey, just so you know, I’m doing this thing.”
We’re just starting to ask those questions. There are folks out there who know a lot more than I do, but those are the two big ones, as I understand, legitimate safety concerns. There might be others.
David Roberts
This is a bit of a crude heuristic, but they have run this experiment in Germany. There were a lot of concerns up front. A lot of electricians objecting to this, a lot of apocalyptic predictions, but they have legalized a little bit of feed-in with their plug-in solar and they have installed now gigawatts and gigawatts of these plug-in solar systems. As far as I know, there has been no problem. The fears have not come to pass in Germany at least.
James McGinniss
Yeah, and again I think that comes down to — when I say allowed, I mean at the physical electrical code, what are we actually doing to the grid? Safety is very important and these systems are very safe. That’s why that has played out. Interestingly enough, the bridge between those two things, at least as I understand it, is the choice to say 1.2 kW is mostly so that hobbyists and consumers who are going to self-install these systems don’t overload at the circuit level. 1.2 kilowatts or 1.9 kilowatts even points at the 120 rule of a 20-amp breaker, for example, or I think 1.2 may be how much power you can push onto a 15-amp circuit potentially.
If you made the rule 20 kilowatts, someone may just start plugging tons and tons of solar into their home and overloading at the circuit level. The bridge between how much you can export without an interconnection agreement ties back to circuit level — physically what’s safe, what do we want to make allowed so that when customers are self-deploying and when products are being offered, they’re being done so in a way that is safe naturally at the physical level.
David Roberts
I’ll wave my hands at this to say that I think in the future these distribution-level circuits are going to be much smarter. Lots more sensors, lots more software-governed, lots more ability to see where power is and distribute it as you need it, rather than relying on physical circuit breakers and that type of thing. I’m guessing it will get safer and you will be able to do more over time.
James McGinniss
This is such a good point and why I think that having real conversations between people in the industry and utility folks and regulators is so important. When you think back, a lot of the safety standards of the utility, and rightfully so, are very mechanical in nature. It’s literally metal flipping. In talking at DERvos, I won’t name names, with a utility exec, I was like, “Hey, if we could demonstrably prove that we were incapable of exporting not through a mechanical switch, but through software in a way that was demonstrated, you believed that this was safe?”
He said, “Yes, that would not require an interconnection agreement because of the export limit, like when the grid is down and things like that, if it handled the safety concern.” I would just put it this way. I think as an industry we need to ask the question, what is interconnection? We have all of these feeders — they’re bidirectional physically, you could export safely physically, under certain conditions, the same amount as you’re drawing in. Why do you need an interconnection to push out? I could put batteries behind the meter and discharge and take that whole home offline.
That doesn’t need an interconnection — or does it? There are different opinions around this, around the industry, of what does and does not require an interconnection at all.
David Roberts
It’s all going to get smarter.
James McGinniss
Yes.
David Roberts
The pieces are all coming together. You are in New York City selling to small businesses, franchises, laundromats, and similar. Who is next? What is the potential customer base here? What other customer classes or types are you going to expand to as time goes on? Where is this possible? You require retail competition, at least. What is the potential customer base and geography base here?
James McGinniss
We haven’t gone too deep on other geos, but based on what we know, we can expand across PJM and New England for the most part. You can think of really any storefront or even direct-metered commercial tenant space, an office, potentially, a legal office or something like that.
David Roberts
What about multifamily? If I just have a condo, can I do some version of this? Do I even have enough power? Am I even using enough power? Have you thought at all about multifamily, or is that not a potential?
James McGinniss
Yes, we have. We definitely aspire to launch a product — a retail energy product — that would cater to the type of people who are going out and will be buying and self-installing solar and batteries because of all the awesome work that BrightSaver is doing. We’re just starting in this lane of self-deploying for now. Once solar and batteries are getting connected, there are ways to optimize them where, without a counterparty like David Energy aggregating them up, offering them into grid services, doing arbitrage, all that stuff, your average multifamily renter is not going to be doing.
We don’t have any near-term plans to do that, but we certainly aspire to over time. I would say we definitely have our hands full now on the storefront perspective. We’ve been in cafes, restaurants, gyms for a while, but we’re starting to get laundromats and salons and grocery stores. You can think of that whole commercial space — commercial tenants across all the major states in PJM, New England, and New York — as areas that we want to expand into in the coming years, standalone. Then separately there’s new products like multifamily renters.
David Roberts
You’re installing all these batteries and you’re the provider for all these — you’re the retail provider for all these businesses. Are you doing any aggregation into VPPs? Is that part of the play? Aggregating to provide grid services, all the VPP stuff? Are you into that?
James McGinniss
Yeah. We aggregate our customers and dispatch them as an aggregation.
David Roberts
How big of a piece of the revenue is that?
James McGinniss
The VPP side? I would say it’s a meaningful amount. In New York you can drive a lot of value just through peak shaving on the delivery side. That’s all value that goes to the customer. All of our revenue is the VPP side. We dispatch it as one thing. Against our demand obligation with the New York ISO and at the grid services program level, all of that we think of as an aggregation and that is where all of our value comes from. It expands over time.
As you start layering in things like solar, the whole becomes greater than the sum of the parts.
David Roberts
I heard you talking with Shayle Kann on his pod, and you were — one of the hot subjects these days, which I’ve covered on the pod many times, everybody’s talking about is these data centers desperately need capacity. The fastest way to get capacity is DERs, in my opinion. Do you think that these — I know you’re going to yell at me for saying small, but relative to data center needs, any one of these installations is tiny. Are you going to be able to aggregate to a meaningful scale that it would matter to a data center? You think you’re going to get big enough to play in that pool?
James McGinniss
I think the white paper that you discussed with Cora is great — looking at Germany, how much of this stuff is going to get deployed in the coming years. I think that’s because we’re only just beginning to understand that’s the one form factor of this stuff. If, again, and I’m talking theoretically about these larger-scale plug-in installations, imagine something like that would be allowed under the varying regulatory environments — that could lead to far greater numbers of this stuff than we could imagine currently. What I would say, and again, I’ve not done the analysis or made a real projection here, but I think in terms of gigawatts and tens of gigawatts in the near term, and I don’t see anything stopping us and other players in the market from doing that.
Let me say it again. In contrast to the current way we’re deploying DERs, there’s too much friction for the current permitted, interconnected way to scale to something meaningful enough in my mind. Plug-in at least offers a path. Imagine if every time you bought an iPhone or went and bought a laptop, you needed a permit and an interconnection and an inspection. The Internet never would have scaled. In order for this thing to really happen, people need to be able to go out and buy and deploy these things without as much friction as there is today.
When I look at that property and knowing that we are probably quite naive right now and not understanding all the ways in which this stuff is going to express itself, I think plug-in, at least on a first-principles level, offers the DERs industry the promise that got me excited about DERs 10 years ago. I do not think that promise has been able to deliver until now. I really do see this as the dawn of a totally different way of deploying that I am incredibly excited about. That is the worst way to answer this, I know.
David Roberts
Let me nail you down on one thing.
James McGinniss
Yes, please.
David Roberts
Just take New York State. Do you think that plug-in capacity cumulatively will exceed traditional DER capacity? If so, when? I know there is a level of arbitrariness to this. Approximately how are you thinking about this?
James McGinniss
I think, definitely for storage. When I look at the whole commercial landscape, plug-in batteries just seem to make more sense to me. In multifamily buildings, I don’t know the extent to which balcony solar versus a traditional system — we’re still in the early innings of exploring that, but I would say 100% yes for storage.
David Roberts
Do you ever worry that the reason this is all going off so smoothly is that it has not yet reached a scale where people are noticing and that if you start to get to really substantial scale, the US’s red tape-prone regulators and legislators are going to start biting at your ankles and trying to get in and regulate this more? Are you trying to race to a certain scale before you draw the eye of Sauron, as it were? Is that how you think about it?
James McGinniss
Yes and no. In the long arc of things, I trust that if our system is working, this stuff makes sense, it is safe, it is cheaper to deploy, it is good in many ways. There are real safety questions and real aspects of deployment that are unanswered but certainly answerable and that we will answer over time. It is not that there should not be regulations. We should create the right frameworks around this radically new technology and I trust we will grind through the mechanics of that over time.
David Roberts
You are creating constituents, right? Every one of these little businesses who are getting cheaper power now are, in some sense, a constituent for this.
James McGinniss
Yes. It’s safe to do so. What are we going to say? “No, they shouldn’t get access to this new technology,” which would be a very politically challenging position to hold, I think. Clean, cheap energy for renters and tenants — that seems like anyone on either side of the aisle will support.
David Roberts
We do lots of dumb stuff, though.
James McGinniss
Yes. The short answer is, certainly with anything new, there will be jurisdictions or certain regulators or certain utility members that don’t like this and some of their concerns are even going to be valid. The best way to have those conversations is to show that it can scale and that it’s something that must be contended with because people are going to go out and do this. It’s good to do, and we should catch the ball as a system — as a society — not try and close Pandora’s box, which I don’t think is going to happen. That’s the myth. It can’t happen. It’s open. Here we are. We have to deal with it now.
David Roberts
We’ve been talking about your business and David Energy. Talk a little bit about who else is in this plug-in — it is nascent, it is early, as you say, early days in this. Who are the others — and what are they doing?
James McGinniss
Impulse Labs has the battery-embedded stove so that you don’t need to upgrade your standard 120-volt outlet, which I think is awesome. Copper —
David Roberts
I interviewed them three years ago. I was hyped about those battery-embedded stoves early on.
James McGinniss
That’s another one. EcoFlow is currently the battery that we’re using, which is making some really incredible products in this category. Pela is another newer startup. BrightSaver, Every Electric is here in New York City, who I mentioned.
David Roberts
I just saw someone trying to raise funds on Kickstarter for something they’re pitching as a fridge battery. It’s literally a battery you put next to your refrigerator to ensure that if the power goes out, your refrigerator stays on. My first thought was, how long until refrigerator manufacturers just integrate that? Just put the battery in the fridge?
James McGinniss
Impulse and Copper may be at the front end of a whole wave of battery-embedded products — like the heat pump or the fridge. I don’t know that company in particular, but Pela, a big part of their value prop upfront is resilience for something like a fridge.
David Roberts
Speaking of the legality, I’ve seen probably a half dozen products like this just floating by on Kickstarter. Little batteries for various things. You can feel people groping around, around just the right way to market them, just the right way to present them to customers. Is it backup? Is it cheaper power? Is it keeping your fridge on? It’s interesting to watch this take shape.
James McGinniss
I’ll admit that we don’t fully understand that yet. People love savings. One thing I was going to mention before that has really warmed my DERs-loving heart is how much just the average customer thinks batteries are cool. If you went to a customer — and a lot of retailers have done this — and said, “I’m going to save you 5% on your power bill,” you’re going to get a lot of skepticism. But you say, “I’m going to do it with a battery,” they immediately are like, “Oh, that makes sense. And that’s cool and I want it.”
David Roberts
You’re not running into, “Oh, battery fires and leaching chemicals into this,” all this misinformation about batteries flying around these days. You’re not running into any of that?
James McGinniss
No. I think people are smarter than that. How many hours have they walked around with a phone in their pocket and a laptop and not had any?
David Roberts
People are pretty familiar with batteries.
James McGinniss
All of these things are myths from a prior era. We literally scoured the Internet trying to find — there are people out there who literally try to start fires with these batteries and cannot. They’re using power drills, they’re using water, all sorts of crazy setups, and they can’t do it. Obviously there are still safety concerns. We care a lot about safety, but I think we’re in this era, especially with LFP, where we know that they’re safe. I think the average person does too.
David Roberts
I really think you can’t understate how much the spread of electric vehicles has got people thinking about batteries, just foregrounded batteries in general.
As I said, the reason you can offer customers cheaper power is that you’re doing a little arbitrage. In some future scenario, say in PJM they install a lot of utility-scale battery installations or they do a ton of what Minnesota is doing, which is putting these mid-scale batteries on commercial and industrial land. The grid in general gets a lot more batteries on it.
That is perforce going to flatten things out and reduce the amount of arbitrage available, which will diminish the appeal of your current economic pitch, will it not? Is that something that you worry about? We’d love to have that problem. Is that something you think about?
James McGinniss
It’s not for two reasons. One is our whole purpose for vertically integrating across supply and demand is the same as in any market environment or any commodity player — if we are self-supplying the consumption of our customers, we are not exposed to price. We can earn stable margins in many different market environments. If prices are low, we’re still just buying from our own solar and storage. If they’re high, there may be some upside there. Our goal on running 100% on clean energy is also a statement of what is viable about the business — if you look at NRG and Vistra, they own all the gen and that gives them their market power.
The second reason is that what I love about distributed energy is that because of that colocation element that we talked about, distributed outcompetes utility scale. There’s a remarkable property of DERs that I think originally DER-pilled me 10 years ago, which is it’s the same cost to build on a small scale as on a large scale. That’s increasingly becoming true with plug-in because you don’t need thermodynamic efficiencies of scale. If I want to go build a coal plant, I should go build a big gigawatt.
David Roberts
Same with nuclear.
James McGinniss
Same with nuclear. If I’m deploying utility-scale solar, it’s all the same components. There are some efficiencies but not as much as you think. The panels may even be similarly sized as a rooftop install. When you’re manufacturing these things off the line, that’s where your efficiencies of scale come from. What that means is if I place a battery or solar on the grid, the closer I place it to demand, the less I need to rely on wires and the more there’s an economic benefit of doing so. If the cost is equivalent roughly and there’s a greater benefit from being connected to demand, it’s going to connect to demand.
You also get resilience benefit and stuff like that. I’ll throw out this one stat that I always come back to — in Australia, utility-scale solar is $1,100 a kilowatt and rooftop is $1,200. In California, utility-scale is $1,200 a kilowatt and rooftop is $4,200. The difference is soft costs. It’s not the physical properties of this stuff. I always come back to that.
What that means is, if anything, the grid edge stuff — and this is also why I’m going to continue harping on small. When you place that next to demand, I’d worry about the wholesale stuff being outcompeted. Because their only value is wholesale, they don’t have a T&D benefit there. They lose all their revenue potential. At the end of the day, when you think about — on the smallness point — every meter, every home, building should have some amount of solar and storage.
David Roberts
Amen.
James McGinniss
That’s the most economic place to put it. That will sum up to a lot over time.
David Roberts
You’re not in the manufacturing, you’re not designing your own batteries, I presume you’re probably not going to get into that. In some sense you’re dependent on the form factor of batteries that other people are producing. Is there any form factor you’d like to see that you’re not seeing now? Are there — literally just the shape and size of these small batteries that you’re leggoing into installations — is there a form factor you would like some manufacturer to get into?
James McGinniss
100%. We are already in conversation with a variety of suppliers about that form factor. The rule in these partnerships is that they have their competencies, which is building this stuff, we have ours, which is doing all the commodity and energy market stuff. If we’re buying in sufficient volumes, we have seen suppliers be very open to creating a form factor, not just for us, but that they think if we’re deploying them in a given way that someone else will come along and want to do it, so there will be some other customer for them.
David Roberts
But what form factor — taller, skinnier, lighter? What would you like to see?
James McGinniss
I would say more stackable. Not just how they stand up. The batteries we’re currently using, I think a higher energy-to-power ratio, so you don’t need so many of them. We haven’t really gotten into the other voltages stuff, but that is something we may want to do — 240 or 208 or something — but right now it just means we’re using a few plugs if we want to do a bigger install. There are ways to consolidate the number of plugs you need and also how many inverters that means you need. You can get much more efficient over time.
David Roberts
And you’re using LFP — less fire prone, slightly less energy dense, but safer is supposed to be the tradeoff with lithium-ion. Is there a chemistry that would help? Do you think about that at all? Are there any other chemistries on the horizon that you think would be good for these applications, or is LFP just fine?
James McGinniss
I think it’s great. I’ve been thinking a lot about spectrum boxes. You don’t think about your spectrum box as this expensive CapEx or something. There may be a $100 charge if you don’t return it or something. I don’t think batteries ever get there.
David Roberts
This is your cable box, right?
James McGinniss
That’s right. I think plug-in batteries will approach something closer to that than we can imagine right now. Just on the lithium-ion and lithium iron phosphate cost curve, why would I not have batteries plugged in at the grid edge and my provider help facilitate that for me?
David Roberts
If they’re embedded in every appliance, you’re going to be doing it whether you want to or even know you’re doing it at all.
James McGinniss
That’s right.
David Roberts
Final question, real final question. If I’m a state legislator listening to all this, I’m intrigued, I’m excited. God knows New York City, New York in particular, has a lot of congestion problems, a lot of cost problems with deploying their clean energy. They’re rolling back their laws now and their regulations. If I’m a state legislator hearing this, do you need or want any particular regulatory or legislative help, or do you just want them to leave you alone while you cook? Is there anything that would be helpful?
James McGinniss
The work BrightSaver is doing is incredible. Those laws are incredibly important for the particular class of deployments that — for the multifamily renter, for example. In this plug-in conversation, what we are doing, our application is not really being contemplated necessarily from a regulatory standpoint. For our case, it leans closer to let us cook because we have the National Electric Code and UL certification and these things are incredibly safe. There are interesting questions around interconnection and how much should be exported, but I think what BrightSaver is doing is all you need to do there for now, at least until we understand more.
I would speak directly to them and say the customers that now have DERs available to them, like multifamily renters and small businesses, are not happy about rising electric prices and these are tools that they now have access to that we should help them get access to however we can. Especially if you’re a clean energy advocate. The two things that everyone has always used is one is “only rich people buy these,” which honestly is true to a lot of degree — they’re creditworthy offtakers — and two, you need incentives like the ITC or what have you. If you just look at it from a “we’re getting access to people who are feeling the pain and who need more affordable solutions and you don’t really need any complicated incentives or regulatory regimes to do that,” it’s kind of a no-brainer to support it however we can. In our application I don’t think there is that much support that we actually need.
David Roberts
Let you cook!
James McGinniss
Yeah, I’ll take it.
David Roberts
Super interesting, James. T hank you so much for coming on. This is really super intriguing stuff. I can’t wait to see where all this goes. Thanks for coming on and walking us through it.
James McGinniss
Thanks so much, David. It was a lot of fun.
David Roberts
Thank you for listening to Volts. It takes a village to make this podcast work. Shout out especially to my super-producer Kyle McDonald who makes me and my guests sound smart every week. It is all supported entirely by listeners like you. If you value conversations like this, please consider joining our community of paid subscribers at volts.wtf, leaving a nice review, telling a friend about Volts, or all three.
Thanks so much, and I’ll see you next time.
