Why can Australian homeowners get rooftop solar installed in a week or less, for roughly 50 cents a watt, while Californians pay $3.30/w and wait months for interconnection? In this episode, I ask inimitable Australian energy expert Saul Griffith to walk us through the entire process — from quote to interconnection — to pinpoint exactly where the US system is broken and how we could fix it.
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David Roberts
Hello everyone. This is Volts for December 26, 2025, “What is the real story with Australian rooftop solar?” I’m your host, David Roberts.
Word has gotten out, at least in the US energy community, that Australian rooftop solar is much cheaper than what’s available in the US — as in, a third to fifth the cost. In part thanks to how cheap it is, it is spreading at a headlong pace, having doubled its share of Australia’s electricity mix since 2020, from over 6% to over 12%. More than 4.2 million homes and businesses in the country boast a rooftop system, adding up to 26.8GW.
The recent news that Australians will receive three hours of free electricity every afternoon due to the abundance of solar power on the grid has many US clean energy advocates looking to the country with awe and envy.
But the industry has its Aussie critics too, who argue that the rush to solar has created grid imbalances that will require unpopular and uneconomic interventions to maintain grid reliability.
Anyway, it often seems that when Americans argue about Australian rooftop solar, they are doing quite a bit of projecting. So I thought I would go to a source who understands the subject firsthand, none other than energy expert, author, scientist, inventor, entrepreneur, organizer, and as of a few months ago, newsletter author Saul Griffith. This is Saul’s third appearance on the podcast — or maybe his fourth? — and I doubt it will be his last. I’m eager to talk to him today about the history of Australian rooftop solar, its current status, and how the US could follow its lead.
With no further ado, Saul Griffith, welcome back to Volts.
Saul Griffith
David, thanks for having me. Is the third time lucky? Is that a record?
David Roberts
I think you’re tied there, I think you might have to do one more to pull in the lead. I think there’s two or three three-timers at this point. I’ll have to go back.
Saul Griffith
I want my next one to be on electric jet skis.
David Roberts
All right, making a note.
Saul Griffith
Once you have three free hours of energy, you use it to do dumb things like electric jet skis.
David Roberts
People have been talking about this for ages. Once there’s all this solar on the grid and there’s all this surplus energy in the afternoon, pretty soon it’s going to be free and people are going to be looking for things to do with it. It seems like we’re here now.
Here’s how I wanted to start because you and I are both deep into this. But it occurred to me that most Americans not only are not particularly familiar with how you go about getting rooftop solar in Australia, they’re not really that familiar with how it works in the US either. It’s still a relatively small percentage who have direct experience with it. I wanted to make the point that we’re going to be talking around, quickly walk through the process. One of your neighbors in Australia wants to get rooftop solar power. Saul’s convinced me I want to do this.
Saul Griffith
You couldn’t imagine a more perfect time to do this podcast because I just built a new garage in Australia in a town called Wollongong just south of Sydney, and I just got five quotes in less than two days for a 14 to 16 kilowatt solar system. Concurrent with that, I’m getting 15 kilowatts of solar on the rooftop of my office building in San Francisco. I’m literally doing a side-by-side in real time while you’re recording this podcast.
David Roberts
We’ll discuss the prices in a minute, but first I wanted to walk through the steps. In Australia, you pick up a phone, who do you call? What happens?
Saul Griffith
There are a couple of websites which are many people’s first step. I believe one of them is called Solar Choice or Solar Quotes. You enter your address and tick a few boxes about how big your house is, and you can upload an electricity bill if you have one, and then it will spit out five instant quotes in 10 minutes from competing vendors. Which is pretty impressive because the majority of rooftop solar in Australia is installed by what they call “mom and pop,” which means small companies with a couple of trucks, and they’ve all plugged into these online systems and they will all end up bidding on your home. The recommendation is to always ignore one or two of the lowest bids.
David Roberts
Does everyone pick the — everyone must pick the third one, correct?
Saul Griffith
Yeah, everyone gets a four-star review.
David Roberts
You pick the one in the middle. Not too cheap, not too expensive. Click on it. Then what happens?
Saul Griffith
It’ll give you a rough quote. There’s a great piece of software written by Open Solar, which is a guy you’ve probably had on your cast. If you haven’t, you should — Andrew Birch. He’s behind OpenSolar. It will even give you estimates of how much you’re going to save and what it’s all going to look like in your life. Then you’ve got a couple of quotes that you can look at, then you can call those people directly. Or more than likely, the computers have already automated them calling you in the next 24 hours.
They call you up, say, “Do you like the quote?” You say yes or no, and then they come out to have a look at your house. They’ll refine the quote in case there’s anything unusual. Maybe you want to upgrade to a three-phase connection. Maybe you want a battery as well. Everyone is in the midst of upselling batteries right now. Then you get, within 24 hours, your full quote. It’s probably the next step that is the most consequential. Those tradespeople can get the permit for your house in 24 hours.
David Roberts
You say, “Yes, I like the quote. Go for it.” They apply for a permit, presumably online, and then just get it.
Saul Griffith
Yeah. Tradie can get a permit over the phone from your job site.
David Roberts
No kidding. All right. They get the permit and then they —
Saul Griffith
I think it’s worth belaboring this point. It’s 60 to 90 days or more in the US to get the same permit. I’ve heard that 50% of customers pull out because if you’ve got 60 or 90 days to think about a purchase decision, you change your mind.
David Roberts
I wouldn’t have half the jackets I own if I —
Saul Griffith
Exactly. There’s a huge amount of sales that fall off during that 60, 90-day period. The other magical thing that is hugely important here is that the interconnection is guaranteed also in 24 hours. The interconnection is the electricity company allowing you to join their network.
David Roberts
Now in the US, in San Francisco, is that a separate application? A separate —
Saul Griffith
That’s a separate 60 to 90-day step.
David Roberts
60 to 90 more days to get the interconnection on top of the 60 to 90 days to get the permit for the work? Yep.
Saul Griffith
You can run those processes parallel.
David Roberts
Yeesh. Let’s pause here because I never really get this. In Australia, they apply for a permit, what is the analysis that in some cases takes 24 hours and in other cases takes 90 days? What are the permitters doing? Are they just — check this box and this box and it’s okay? Are they looking at the details? What are the permitters doing and what conceivably takes so long?
Saul Griffith
In the US, we know how to put solar on any type of roof. Doesn’t matter if you have bitumen or steel or tile. I don’t think they’re checking on the roof type. I can’t explain this question, which is a little embarrassing to me, but I know there are setback limits, so you have to have the solar set back a certain distance from the edge of your roof. There might be somebody who paws over your plans in the US to have a look at that.
Rumor has it that those setback provisions originate in the 1908 San Francisco earthquake, where after the earthquake there were a huge number of gas fires and the way to stop the gas collecting in the house was to punch a hole in the roof. The fire department determined that you had to have a three-foot setback so they can run around and punch holes in your roof to let the gas out. Only now in an all-electric home, you shouldn’t have any gas inside. We’re protecting ourselves from the past, not the future.
David Roberts
Do you also think it’s accurate to say that the permitting process in Australia — I’m guessing because you just have one big grid operator and there’s one big system — that the process is roughly the same wherever you are in Australia? Because I know in the US there’s all these local, it’s different place to place in the US. Is it a unified system in Australia?
Saul Griffith
The grid operator problem is separate from the council problem, and we have a far more liberalized grid operator system than you do. You have state-sponsored vertical monopolies. We have competition in every component of the electrical system. In theory, we’re a lot more complicated in terms of the electricity market. In terms of the permitting, the problem in the US is that you have more than 10,000 things called an AHJ.
David Roberts
AHJ.
Saul Griffith
An AHJ is an Authority Having Jurisdiction. The Authority Having Jurisdiction is the local council or the city or the corporation that owns the thing. Every single one of them has a different set of rules. You might be in a certain place in Santa Fe, New Mexico where they believe that you can only paint your houses a certain color that looks like red dirt and therefore you can’t have solar panels. It’s that AHJ jurisdiction problem, which enables approximately infinite permutations of NIMBYism.
In Australia, almost by accident, because solar wasn’t taken seriously just at the moment when the industry was taking off, the government waved its magic wand and said, “Everyone shall be allowed to have solar.” We had a federal standard to overrule the, I think, state-by-state standard. It meant that everyone could be allowed to get solar. I think the only special exemptions in Australia are if you are a heritage, which means a historic building.
David Roberts
To wrap it up, if I’m living next to you in Australia, I call, within 24 hours I have a quote, within 24 hours, the vendor I’ve chosen has a permit. Then they schedule the work and come do it. Does the work itself take — what’s that schedule? How far out? Could I have them on my house in a week?
Saul Griffith
It’s even better than that. You have to remember, this is a first world country where 40% of people have rooftop solar. At 40% of households having it, it’s pretty hard to commute home from work without seeing a truck that says on the side of it, “Hot Electric” or “Solar Hub Electric” or “Joe’s Mom and Her Dog’s Electric Solar and Water Heater Service.” You can probably call one of those on your commute. They will probably show up the next morning before 7 am and have a look at your roof. Depending upon their backlog, they’ll be on your roof within 48 hours. Or maybe it’ll be a week, or maybe it’ll be two weeks because they’re booked up with other people. Each crew can do one solar system or two solar systems a day.
These things are highly optimized that companies will try to do the scheduling so they’re doing two or three jobs on the same street or in the same suburb on the same day, so they don’t have to drive across town to do the second job. If there’s a delay of a couple of days, it’s because they’re trying to make sure that they’re going to do your neighbors at the same time they’re going to do yours. The thing that costs you money in contracting is what they call truck rolls. I believe in the US there’s something like five or six truck rolls per solar installation. In Australia, it’s as few as one or two.
David Roberts
To wrap all that up, in theory, if everything’s going well, I could, as an Australian homeowner, go from no solar to installed solar on my roof in a week.
Saul Griffith
In a week. Eight days ago, before I left for Taiwan, I had to go to Taiwan to work on how do you decarbonize and electrify Taiwan?
David Roberts
I want to do a pod on that. I’ve been meaning to do a pod on Taiwan.
Saul Griffith
I have the kid for you.
David Roberts
Good, good.
Saul Griffith
I got four guys to quote and then because people want to do Saul Griffith’s solar, a couple of extra people decided to put their name in the ring and I got six quotes in under four days. The average price of the solar is under 60 cents US per watt installed in four days.
David Roberts
When we say 60 cents per watt installed, that means on the roof.
Saul Griffith
Behind an inverter connected to the grid.
David Roberts
The phone calls, the permitting, the installation, you’re done. $0.60 per watt versus what is it going to be for your San Francisco building? What’s the timeline and what’s the final cost? Have you gotten to the end of that process yet?
Saul Griffith
$3.34 for the price.
David Roberts
$0.60 a watt installed in Australia versus $3.30 a watt installed in San Francisco.
Saul Griffith
I think from my middle bid, not the bottom one, not the top one, but in the middle, I’m going to get about 50 cents a watt.
David Roberts
In Australia. That’s a sixth of the price for a comparable system. What is the timeline in San Francisco?
Saul Griffith
San Francisco, it’ll be on the roof in about six months.
David Roberts
Six months. 50 cents a watt installed in a week versus $3.30 installed in six months. This is not abstract, this is literally — you are doing literally real live quotes.
Saul Griffith
With a real life human being. Fortunately, PG&E is such a rapacious monopoly and their price of electricity is so high, it’s still worth doing it in San Francisco. That’s the crazy thing.
David Roberts
Funny.
Saul Griffith
Yeah.
David Roberts
I’m sure you don’t have as much direct experience, but that timeline — six months and $3.30 a watt installed — how much do those vary in different areas of the US? Are they substantially higher or lower in other places?
Saul Griffith
I’ve heard rumors you can get it in a month or two months in Virginia, but the permitting and the interconnection delays are the big time sucks in the US — then there’s often an inspection delay. I’m trying to help you structure this conversation so we can identify the various things that cause the cost. One of them is permitting, one of them is interconnection, and another one is inspection. We do our inspections very differently in Australia than you do in the US.
David Roberts
But every installation is inspected in both places.
Saul Griffith
In Australia, the great majority are inspected, but we don’t have pre-inspections. We do the inspection statistically and we have a training and certification process for all of our installers.
David Roberts
What about, before I forget, labor — since you brought it up — is there a big cost?
Saul Griffith
We pay our tradies more than you pay your contractors. Not only do we have an adorable name for our tradespeople — tradies — we pay them more.
David Roberts
This is emphatically not about cheap labor.
Saul Griffith
This is emphatically not about cheap labor. This is about red tape and good old American bureaucracy.
David Roberts
I want to — we could do a whole pod on this, but give me the 3 to 5 minute version.
Saul Griffith
Ezra’s got you there.
David Roberts
Let’s do a little history about rooftop solar in Australia and why, how this happened. People, when people hear this, want to imagine that someone 30 or 40 years ago was a genius and had some long-term vision of this. But from what I’ve heard about the history of Australian solar, it’s very contingent. Just the right group of dudes got interested at the right time. There’s a lot of luck and contingency involved. Give us a brief rundown of how you came to this point, how Australian solar got started.
Saul Griffith
I tried to deeply get to the bottom of this for a New York Times editorial I wrote years ago. I went to a bunch of the original gangsters in the Australian solar industry and I got five different versions of the story. Australians are famous for not letting the truth get in the way of a good yarn. There may be some of that factor, but for sure it is far enough in the rearview mirror and there are enough contributing factors that there is not a perfectly clean story.
But it does mean that it wasn’t one individual’s effort. It was many individual and concurrent efforts. One of the legends that’s interesting is that the Howard government was under pressure going into one of the early UN climate COPs and his name was John Howard, that he was going to throw Australia under the bus and not ratify. He wanted something to exchange with the people, the environmentalists, and in those moments created this instant interconnection policy and instant permitting, enabling the things that enabled the permitting and the interconnection. In some respects at that point, this was late 1990s, solar was a hobby. It wasn’t going to be a serious thing.
David Roberts
Same story Hans Feld told me in Germany. The famous father of the feed-in tariffs in Germany. I was “How did you do that?” He said, “No one cared. No one barely noticed when we first did it.”
Saul Griffith
That’s right, no one noticed. There were a couple of nerds at the University of New South Wales that were fighting for it, not coincidentally, because that’s the home of Professor Martin Green, who is the inventor behind the modern solar cell. There was a whole research group and a whole bunch of solar nerds rising up out of that University of New South Wales group. They were working on the technology, but they were starting to work on the policy and the other components.
As legend has it, there was a hippie who was into this solar stuff, living on the south coast, who was a tradie or a consultant in the energy space, and they created the training manual that ended up being the training and certification program that all of our tradespeople went through so that they would become qualified solar installers.
David Roberts
This was before or after Howard did the interconnection and permitting thing? Because it sounds like those are the big —
Saul Griffith
Before in the case of the training stuff.
David Roberts
Really, fueled by hope? Then the early guys.
Saul Griffith
Yeah. Then it was the same period when the University of New South Wales people were starting to do the first couple of little test installs in Sydney. People who work on climate policy would love to point at this as some fabulous example of enlightened policy leading to a good outcome. It does in fact look a little bit like luck.
David Roberts
Instead, it’s the more accurate historical lesson, which is that shit happens.
Saul Griffith
There were a couple of things that were also super important. Very high feed-in tariffs in the beginning.
David Roberts
I want to talk about the policy. There are two big supportive policies and I’d love to hear their timing and their roles. The first was these feed-in tariffs and the second is the current scheme, the SRES, Small Renewable Energy System, schemes. Thank you.
Talk a little bit about the feed-in tariffs early on. Was that also just because nobody really thought it would amount to much? How did that get through and who was pushing for that? What is the timing on the feed-in tariffs?
Saul Griffith
I should go back and learn more of that history. The feed-in tariffs, we’re talking early 2000s, and the feed-in tariffs was as much as 40 cents a kilowatt hour. This is when people were paying six, seven, eight dollars a watt. This was only the truly enlightened environmentalists who wanted to pay a lot were doing it, and they would get these generous feed-in tariffs as an incentive to do it. That was early 2000s, but this is when you would be buying a 4 kilowatt system and paying $20,000 for it.
David Roberts
The feed-in tariffs, because there are a lot of different ways to design them. Were they designed to phase out and have they phased out? What is the current status of the feed-in tariffs?
Saul Griffith
The feed-in tariffs have largely phased. Depends a little bit on where you are. Some of the energy companies started to lobby for and succeeded a little bit in getting a negative feed-in tariff because they wanted to slow this down. We had so much solar hitting the grid that grid operators wanted to put a tax on you putting your solar back onto the grid. Our feed-in tariffs went from 40 cents positive to minus 2 cents. Once it got negative, it was branded the solar tax.
David Roberts
The SRES, the small scale renewable energy scheme, is still in place. What is that? It’s not a feed-in tariff. What is the mechanism there?
Saul Griffith
If you were looking for a policy prescription, something that’s well designed and has had a really big, profound impact, it’s the Small Scale Renewable Energy scheme. This acknowledges that households are important components of energy infrastructure.
David Roberts
Which makes me wonder how far back it goes. When did it come on the scene? Because it has taken policymakers a long time.
Saul Griffith
The SRES was 2011.
David Roberts
Got it. The SRES goes back to 2011. What does it do? Is it also financial? Mostly? What is the support?
Saul Griffith
Americans, Australians, we’re all the same. Governments get rolled if infrastructure doesn’t work. Governments get in the business of underwriting, subsidizing, use whatever neoliberal term you like, infrastructure. Blackouts roll governments.
We underwrite in many different, through many different mechanisms, large-scale energy systems, irrespective of what fuel they are. In fact, the majority of global subsidies are for fossil fuels. It’s always important to say that because there will be people who will want to believe that that’s not true. We just need to call that out. The SRES was an incentive for households. They designed it so that it would phase out by 2030. Started in 2011. Remember 2011, you’re installing 4 or 5 kilowatt systems, they were probably costing 3 or 4 US dollars a watt, so they were a little too expensive.
There was a calculation that took into account where you were — how sunny it is. It took into account how large your system was and what the distance to 2030 was. It gets smaller and smaller every year because you can only, when I put my system on this year, I have only got five more years until 2030. They guessed that 2030 would be the point where everyone in Australia would not need any subsidy for it to be cheaper than the grid.
David Roberts
Is the SRES only for solar or is it other small-scale distributed?
Saul Griffith
It was initially for solar. It now includes, I believe in most Australian states, water heating and it now includes batteries. I’m an advocate and pushing the government to make it include electric vehicles, electric cooking, electric space heating, the full suite of electrification.
David Roberts
It translates to financial help in buying those things. That’s the —
Saul Griffith
Right. The thought process behind it is it’s designed to transform the market in the early days where you still haven’t optimized the workforce, you still haven’t optimized the supply chain. It just needs to be tipped over the edge. You could argue that the solar was pretty well designed. Plus or minus a couple of years, they picked the right date for when it should phase out. They’ve just included batteries in it as an election promise this year in 2025. I think they might have overdosed the rebate.
David Roberts
Paying too much for batteries? Too many batteries is a good problem to have. Let’s talk a little bit about batteries. The incentive now includes batteries. Do you have a sense of what percentage of new solar installs are now including batteries or what percentage of current installs have batteries? What is the state of battery penetration in all this?
Saul Griffith
We’re starting from 40% of Australian households — rooftop solar. I think it was a couple of percent with batteries before or 1%. Very few. When I talk to my friends who were in the industry, they tell me more than 50% of households installing today are getting batteries.
With the new battery program addition to the SRES, I think the government thought everyone was going to get roughly a 10 kilowatt hour battery. I think they designed the program, they put $2 billion into a kitty to do it. This was much, much cheaper than subsidies they would have had to do to keep the equivalent amount of coal power station online. For those people who are “Wait a second, this was the government,” no, this is a cheaper way to build a more reliable system than keeping coal online.
It was clever policy, but I think they thought those batteries were going to take five years to clear through the system. The average person is installing a 25 kilowatt-hour battery and the program will probably be out of batteries, although it may end up being an evergreen program. They’re going out the door so fast that people are projecting middle of next year they’ll be — in under one year they’ll clear all of those batteries.
David Roberts
Batteries are very popular. Speaking of batteries, is there any progress toward VPPs in Australia? Is anyone trying to aggregate and manage all of this distributed energy in a way that helps the grid? If so, are they calling it VPPs or is that just something the grid operator does there? Is anyone doing it there?
Saul Griffith
Most of your questions, David, hide four or five questions in them. If you listen to my podcast, shameless plug, from my podcast called The Shameless Plug, I interviewed a lovely guy called Dan Andrews from a company called Amber. Amber lets Australians trade their batteries on the wholesale electricity market. People who are subscribers to Amber’s service report making $1,000 or $2,000 per year per 10 kilowatt-hour battery by being able to discharge that battery to the grid when the grid is under strain.
Is that a VPP or not? I think technically to trade you have to be a VPP, but the mechanics of Dan Andrews’ Amber don’t look exactly like a VPP. There’s a whole host of other VPPs. A VPP, for those out there who aren’t tragic electricity nerds, is a virtual power plant. I want to say something out loud that’s a little radical and is going to ruffle some feathers just because that’s what I like to do. I think a VPP is granting yet another monopoly to yet another tech bro that we don’t need for a high-functioning electricity system.
David Roberts
You think prices can do the job that VPPs are trying to do now? I have people who think that that are going to be on the pod sometime in the next couple of months.
Saul Griffith
They may be correct. There are people I know that you probably are going to have one of my mates on who believes that you should have a negotiated price between the toaster and the oven so that you truly optimize all the way down to the appliance. You can go mad. Maybe the most liberal possible market is the right answer. Let’s talk about gatekeepers — not about price signals. You can do the calculation in a single spreadsheet cell that does everything that a VPP does. Does the grid need electricity now? Yes, discharge. This is not a hugely computational thing.
You have to ask yourself, why do I need aggregation? All the VPP does is charge you a fee so that somebody who can write software can aggregate your home with a whole bunch of other homes to trade the grid. I don’t believe that step is necessary. It adds a gatekeeper and it adds a rent seeker. If you had a well-designed electricity market that was fair, this stuff would just happen automatically at your smart meter or through your retailer or utility company. A VPP might be the mechanism — how you get from the past to the future — but it’s a band-aid that adds a rent seeker. Let’s just say that.
David Roberts
That is several other pods. That is more than one other pod.
Saul Griffith
If you want to know, and I’m sorry to my American friends, but if you are living in the future where solar is free or near enough, this is where the big fights and the big policy and regulatory battles are — about the structure and the design of the electricity market. We still in Australia have an electricity market that’s protecting the incumbents, even though the Australian households are making much larger capital contributions to building out our energy infrastructure.
David Roberts
People have the impression that Australia is mostly sunny, mostly temperate, mostly playing rooftop solar on the easy setting. Whereas in the US we’ve got frozen cold Northeast, leaky buildings. In the south, all these different climates, all these different states of play, all these different — it’s just a more difficult thing. In the US do you think any part of Australia’s success is just circumstances are amenable to it?
Saul Griffith
It’s amazing how Americans can argue themselves out of a good thing before they begin. If you just look at the latitude of cities, all of Australia is roughly, if you drew a line from Northern California to the tip of North Carolina, everything under there is roughly an Australian climate with an Australian amount of sunshine. Half of your country and half of your people live in places that have similar circumstances to Australia in terms of solar insolation. We’ve got 28 million people living under those circumstances. You have 180 million.
I’m going to call it politely — in Australia you would say this is calling bullshit. I’m going to call bullshit on that one off the bat. I do this work in Tasmania and New Zealand and they look more like your northern states. The solar is working perfectly fine in Tasmania, New Zealand, maybe not as much in the wintertime — you get about a third the solar in the winter that you do in the summer there. In the summer, you get very cheap electricity and it turns out the economics are worth it.
David Roberts
I have a bunch of criticisms to throw at you and have you respond to or rebut or whatever. Before I get to that, I just want to —
Saul Griffith
Are we going to do a live episode of X?
David Roberts
I hope my questions will be better than that. How has political opposition in Australia to all of this solar changed over time? What is the state of the art, critical politician out there saying? What are the grounds they’re using to attack this stuff? The right wing in Australia — are they attacking it or does everyone love this?
Saul Griffith
Most Australians love this. America, 20% of Australia believes in fantasies and things that just aren’t true. We have that component. Our state of the art conservative politician is backed by the same state of the art media game that was invented by an Australian. His name’s Rupert Murdoch. He’s the guy behind Fox News. In Australia it’s called Sky News. If you’re looking for the misinformation, we have plenty of it as well.
We had an election earlier this year, it was prolific. The state-of-the-art conservative backed a plan to put nuclear power all over Australia. What is hilarious is they’re meant to be the fiscally conservative government and they were arguing that the government — it was going to be state-sponsored socialism.
David Roberts
Is there any other kind?
Saul Griffith
The irony is we’re thick it was hilarious to watch this conversation. The argument is because you need baseload power. People still don’t seem to appreciate —
David Roberts
That is the argument — that solar doesn’t shine at night. It’s the same stupid effing argument there that it is here. Even though solar has risen to be 40% of households and is now closing in on 15% of total Australian electricity, you are still getting the basic “it doesn’t shine at night” crap.
Saul Griffith
We get “doesn’t shine at night” crap, we get the “not recyclable” crap, we get “it takes more energy to make them than not” crap. I can recite the answers to these. They are recyclable. They’re made out of glass, they’re made out of silicon, which is sand, and they’re made out of silver and they’re made out of copper, and the frame is made out of aluminum. Those things are all very recyclable and quite valuable. We don’t necessarily have recycling facilities everywhere, but that is something that’s getting to scale now because there’s starting to be a used market.
Remember, it takes 25 years before there are solar cells to recycle. That’s happening. In terms of the energy cost to make them, in the deep energy nerd universe, there’s a thing called EROI — energy returned on energy invested.
David Roberts
The peak oil blogs used to talk about that all the time. Taking me back to 2006. The peak oil blogs in 2006.
Saul Griffith
Let me take a swipe at my old gripe with those peak oil blogs. The EROI for the fossil fuel industry is about 8 to 1. You spend about 12% of your fossil fuels finding, refining, moving, and delivering fossil fuels. For solar, it takes about three months of the production of the solar cell to cover the energy cost of its production, and then you get 25 year, 30 year warranties on these things now. The energy return on energy invested looks like 50 or 60 to 1 instead of 8 to 1. Absolutely wipes the floor.
We get that nonsense, we get the baseload power. Remember, baseload was a word invented to describe the phenomenon that coal plants were hard to turn off, hard to throttle them down and throttle them up again. You would keep them burning, which created the — remember when off-peak electricity used to mean at midnight? That’s because you couldn’t turn the coal off. Why don’t you power Las Vegas through the night on coal? Now our peaks are in the day.
The idea that constant nuclear power solves a problem is also untrue. Remember, the demand curve follows human behavior. It’s just as hard to match nuclear power to our demand curve as it is solar power. Both of them don’t match perfectly the demand curve, which means in both cases you’d need batteries. That’s ridiculous — there are layers of ridiculous arguments against.
David Roberts
Let me throw out a good one, or at least I think the best one, which is the equity-based critique of this system. You get this a lot in the US. Anytime you’re helping consumers buy what is a relatively expensive item, it’s just math that most of the consumers that are going to take you up on that are going to be middle class to upper middle class consumers. It’s going to look like you’re shoveling a bunch of public subsidy at wealthy people. To some extent that is the case with Australian solar subsidies as well. What’s your take on that critique?
Saul Griffith
I’d like to give you three or four takes on the critique. This is a hugely important issue. Why am I in this game? I’m trying to find a solution for climate change. You cannot half-solve climate change. Meaning if only the rich people have solutions, we still haven’t solved climate change. I do the economics on energy in America and Australia all the time, on what it means for a household in Australia. If you electrified all of your things and you finance them over the life that they’re going to be in your house, you’ll end up saving, including the costs of the capital, about $4,000 to $5,000 per year per Australian household if you electrify.
There’s a very simple equity argument in Australia that the most equitable thing is a system that finances everybody to get cheap solar, electrification, all electric vehicles, electric homes, all the things, because it saves every household money. You can do aggregate of that. Australia would save $1 trillion on energy by 2050 if we went all in on electrification. Part of that is because we spend $160 million a day on foreign oil in a country with solar. When I drive my two electric vehicles and my electric boat off my rooftop solar, I’m paying about US 0.8 cents per mile. If you drive a gasoline or petrol vehicle, and we call it petrol here, you call it gasoline, it’s going to cost me 15 to 20 cents a mile.
David Roberts
This is all true, but it always comes back to the upfront costs.
Saul Griffith
It always comes back to the upfront cost. This is why the policy frontier in Australia is finance programs to help every Australian household regardless of income.
David Roberts
This is something you’ve been on for years. Are you making progress in the Australian government? Are they hearing this? Financing is such an important piece of all this.
Saul Griffith
We have made progress in Australia and they did something called the HEUF, which was the Home Energy Upgrade Fund, administered by the CEFC, the Clean Energy Finance Corporation. It was imperfect. It didn’t really solve the middle class financing problem because if you’re in the middle class, you have a credit score, and if you go through traditional banks, your credit score determines whether you can borrow the money to buy that thing. Australians are limited by credit access more than they are limited by the economics working. You need to figure out banking schemes that change the nature of it.
We are in discussions on various forms. You could do rate-based financing, you could do bill-based financing, you could do local council. There are a lot of interesting conversations about the various different ways you would make this more equitable. Big picture, you don’t solve climate change unless you make this equitable. The equitable problem is a credit access problem because the economics of it are good. It’s about the poor single mom driving across Sydney to do her job as a nurse, can’t afford the new electric car and the husband left with her credit score. That’s the stereotype of, would save her $3,000 a year, but she can’t get it because of credit access.
David Roberts
Conversely, as more people put on more rooftop solar and move off of — this is the old death spiral thing — as more people move off of grid power, fewer people are sharing the cost of grid power. Aren’t the bills of those people who aren’t getting rooftop solar going up a little bit to compensate? It’s not just that they’re not getting the solar, it’s that they’re getting screwed on the back end too.
Saul Griffith
This isn’t true. We’ve got load growth outpacing grid defection. Meaning people are more electrical load. If you need to support Rupert Murdoch’s retirement, you can continue to believe those things or you could realize that the highest component of anyone’s electricity bill, and this is true in America and Australia, is the cost of the distribution, which is the local poles and wires that move the electricity around. Those things don’t have very high utilization, typically between 25 and 40%, meaning they’re rated very high, as though every house has every light turned on at all times. They’re only delivering less energy.
If you do a whole lot more solar and a whole lot more batteries under the local substation on that local distribution grid, you can probably double that utilization. If you double that utilization, the per kilowatt hour delivered cost of electricity will go down. If you were saying a recipe for what is the cheapest — I think we did a great job in the US through Rewiring America and a whole bunch of other efforts, selling the idea that our solution for climate change and other things is electrify everything. We did a really bad job of saying electricity needs to be cheap. Now the project is, how do you make electricity cheap?
David Roberts
It’s moving in the wrong direction here. Is it also the wrong direction there?
Saul Griffith
No, it’s moving in the right direction here. It’s moving in the wrong direction there for a combination of factors, but a lot of it is, for example, allowing Wall Street to buy PG&E out of bankruptcy and then shovel on a whole bunch of extra costs on electricity. Your utility monopoly model is broken. Wall Street being involved in electricity is broken. The growth in data centers is breaking this system. America has red tape, not only at rooftop solar level, but at distribution level, at national level. That red tape is adding costs.
Unfortunately, you were early in the electrification game. You’re on 110 volts, which means you need more switch gear per house service than if you were on 240 or 480 or, God forbid, we go to 800-volt DC local distribution wires or something t hat sounds like the future instead of the 19th century. There is a recipe for making electricity cheap. Australia is doing it and America could do it.
The cheapest electricity will always be the electricity generated closest to where it’s used because you don’t need all the extra distribution and transmission wires and all of those extra costs. My rooftop solar genuinely costs me $0.03 per kilowatt hour US delivered to my appliances in my home. You maximize the amount of that. For the same reasons of the geography of energy, you should maximize — you should put solar on the schools, on the churches, on the Lowe’s and the Home Depots. There’s enough car parks in America that we don’t even know how many car spaces there are, but it’s estimated to be between 2 and 20 billion. You could probably power something like a quarter to a half of America on your parking spaces if you put solar above them.
Korea, France and other places have now mandated any new car park has to have solar over it.
David Roberts
I saw France did that.
Saul Griffith
There’s solar going up voluntarily over car parks in Australia. You do rooftop solar, maximize it, then maximize that stuff — let’s call that in the community. Then you build out the rest of your energy system, which in the US will be geothermal and wind and, once Trump leaves the White House, we’ll do wind energy again and nuclear power. America will need that big mix. Then you need market reform in the US. You need to address the utility monopoly problem.
We made a mistake in Australia. We liberalized our markets in the early 2000s under something called the Hilmer Reforms. We divided the vertical utility into four components, which are generation, transmission, distribution, which is the local poles and wires, and then retail, which is getting your bill. That was also to introduce competition. That raised the price of electricity because it increased the overhead.
I’ve made a fairly famous graph that was even on Australian national television, of, “ we did this privatization and all of the electricity price went up and to the right and it wasn’t very good.” Rooftop solar has been the antidote to that. It’s not perfect here, but through the mistake of that extra liberalization at the market, we’re in a place where we’re forced to reconcile with redesigning that market. That’s what’s going on right now. That’s what’s going on with this three hours of free electricity, which is part of the reason you called me. It’s to send a giant signal to the market.
David Roberts
It’s helpful that it’s just one country and one government and one grid and one grid operator and one market.
Saul Griffith
It’ll happen everywhere. The future happens slowly and we just need it to happen faster. It’s not one grid operator, by the way. It’s a whole bunch of grid operators here and it’s a whole bunch of retailers.
David Roberts
It’s one market. It’s one big market.
Saul Griffith
We have three markets and we have — Western Australia is an Epcot and Queensland has a different system. Then AEMO, which is the Australian Electricity Market, is everyone except most Northern Territory. Americans want to believe that we’re perfect and shiny. We’re not. We’re just as weird. It looks like some of our neoliberal mistakes might have been worse than yours, but have enabled us to see their problem exposed sooner. Now we’re correcting it.
David Roberts
The main criticism of all this is that by rushing to solar, subsidizing it so heavily, pushing it so fast, putting so much on the grid so quickly, what you are getting is enormous surges of energy during the daytime when the sun is out, which then falls off when the sun goes down. What the critics would say is you are trying various ways of trying to push demand under that surge, but they are not working very well.
The three hours of free electricity during the daytime is a desperate kludge to force people, to push people, to move demand under this surge, and that it is a sign of stress on the grid and an oncoming disaster, not a sign of abundance. What do you do about the fact that all of this is surging energy during the daytime, that there is in some sense too much solar to handle?
Saul Griffith
Any good conspiracy that has elements of truth, but is largely bullshit.
David Roberts
The grid operators are, and I don’t know the details of this, you can explain, but they’re saying in order to sign up, in order to interconnect to the grid, you have to give us permission to shut off your system if we need to, if the grid overloads. Now you get these grid operators who have the power to shut off hundreds of thousands of these solar systems, which also looks like another panicked response to too much energy in the daytime.
Saul Griffith
Let’s be clear. Every single system has an isolation switch that can isolate it from the grid so that it doesn’t back-feed the grid when the grid goes down and electrocute the technicians. There was an element of truth to what you just said, but no, the safety system means that they can all be disconnected,
David Roberts
Remotely, by the grid operator?
Saul Griffith
They all get triggered by the grid operator when the grid goes down. You can call that remote or not. That’s automatic. There are some systems that — we are in a negotiation of whether you should get the rebates on the battery if your system is not connected to a VPP. A VPP is what enables the grid operator to turn your system off. It’s voluntary to join a VPP. You can set boundaries on your battery and when it can be used and how much can be discharged.
We have the same dysfunctional debate that I see in America about who has control. This is all about who has control. Most Australians are choosing to cede some control of some of their things — their water heater or the throttling on their vehicle charger — in exchange for cheaper electricity. The market is figuring this out by giving people the handles and the tweaks and the dials. Nobody knows, because it is such a complex system, exactly where those dials should be set. We can guess, set them for noon when the sun is high in the sky. The market is figuring it out and lowering that price.
The underappreciated part of this is the role of the battery. We are now seeing battery prices — on some of my quotes in Australia, I was being quoted a 48 kilowatt-hour battery that is bigger than I need. I was getting a price per kilowatt-hour, which makes the stored cost of that under 10 cents. It gives me a blended 24/7 electricity price from solar and battery of 11 cents to maybe 8 if I do the programming well, which still beats the grid enormously. I believe that is on a path to be sorted out.
David Roberts
The problem is during the daytime —
Saul Griffith
You hit me with five incorrect statements from your ex, your paranoid ex. People who wish to make this an ideological debate. They said overnight we incentivized too much solar. It was 25 years. That’s not overnight. The batteries are going in faster — they look more overnight — but they’ve gone down the cost curve faster. It’s a natural market reaction. Yes, 40% of our distribution pole transformers are now running backwards at one o’clock in the day. That doesn’t necessarily mean a bad thing. That can mean higher utilization of your capital assets that are moving electricity around. That higher utilization lowers the price for everyone.
It’s part of your equity toolbox. You make the lowest price electricity system and you can pass that lowest price through to everyone regardless of whether they have the solar on and the battery. I want to dispense with that false argument. The cost of solar and storage is lower than the grid. We have the batteries that can now do it. People underappreciate — we invented the third shift in industry to absorb that coal that we couldn’t turn off. Social behavior trailed the rollout of coal and the original electricity grid. Now it’s going to trail and follow the rollout of this different grid where we just move the cheapest electricity to noon instead of midnight.
That three hours of free power is going to enable a huge number of new business models of absorbing that into a whole bunch of things, whether that’s steel making, industrial laundry, all of these other opportunities.
David Roberts
One of the critics said they’re lowering the price, they’re making it free during the daytime, but they’re just going to compensate by making it more expensive in other times. They’re going to average out charging as much or more regardless. There’s no actual drop in cost for the average Australian homeowner. What do you make of that? Are they raising prices on the non 3-hour?
Saul Griffith
I believe the person who said that doesn’t know who the “they” are in the “they” that they are intoning. I can identify three “they”s in the sentence that they just said. “They” being the Australian government through its regulators telling the market to make changes. The other “they” was the utility companies will respond by changing their prices at other times of day. There are protections in place to try and prevent — this is the type of behavior that we’d expect of PG&E. We’re no better. Our guys are also corrupt monopolies. Yes, they will try and get it somewhere else.
People have the relief of going to finance solar and battery to beat that. We need much larger market reform in Australia. It’s unclear that we need these four layers of the market. The retailers haven’t substantially increased competition. In fact, it looks like because in the interests of competition, we now have so many retailers offering so many apparently good deals that people switch every six months. That churn and that turnover is raising the cost of doing retail.
David Roberts
It’s not clear that retail competition has really paid off anywhere. As far as I can tell, it mostly seems to translate to a lot of scams, a lot of pitches, and a lot of churn. Is it really bringing down system costs anywhere?
Saul Griffith
Evidence is no. I would advocate for a system that removes the retailer and puts the retailer function with the distribution poles and wires.
David Roberts
To pull the lens back a little bit, because this is a broader question.
Saul Griffith
One question at a time.
David Roberts
It’s a big question, but it’s one question. The larger issue is just as you’re moving to solar, more and more solar, you’re getting more and more power during the middle of the day. You can compensate that by moving some demand under that and you can compensate for that by storage, which moves some of that out of that bulk.
My broader question is, you think between moving the demand and storage we will be able to handle giant amounts of solar? You are not worried about getting overloaded in the middle of the day. You think those two responses will be enough to ensure the reliability of the grid, etc.?
Saul Griffith
You can say it really bluntly. The average Australian household uses 14 kilowatt hours a day of electricity today. When we electrify all of the cars, which we need to do to get to zero emissions and to stop spending $160 million a day on foreign oil, that enables a whole bunch of problems in the world, we will increase the load of the Australian households to about 39 kilowatt hours a day. We nearly triple. It’s slightly less true in the US — that’s only because your homes use more energy. We have 1.8 cars per household, similar to Americans, very similar in many ways.
Whether we can absorb all of that solar is going to be whether or not we have those cars plugged in during broad hours in the middle of the day, because that is the giant proportion of that load — our vehicles. The other giant loads are the industrial loads, which work differently. What you didn’t talk about is Australia, because we created a bit of a religious political war about transmission and where the transmission lines could go. The farmers and the regions have rejected that because they listened to Rupert Murdoch.
We’re not connecting enough wind. You would like more wind balancing with your solar. Australia would solve most of its problems if it did a transmission line from Sydney to Perth — that’s a long way, it’s Miami to San Francisco. The reality is the east coast peak, where all of our people live, is three hours ahead of the west coast peak. The west coast peak could be helping to power our peak in the east coast evening. You need interconnection over long distances, you need that transmission, you need a blend including. Even with all of those things, what matters is when the cars are being charged and when industry is pulling electricity from the grid.
Those are the two things that move the needle substantially. I happen to have been a metallurgist in my first life and I’m increasingly interested in iron making again. In fact, if you look at all the biggest industrial loads in Australia, the things like iron making, aluminium making, you would love to get a blended price of electricity at 2 or 3 or 4 cents US a kilowatt hour, at which case you can actually make cheaper iron, cheaper aluminium than you can with phosphorus, cheaper cement. That’s going to require processes that can be throttled a little bit to respond to load. That’s being developed.
We invented this incredible thing in the last hundred years called digital control process control. We can now do these things. We need incentives for industry to use electricity when it’s cheap — three hours free. There’s a giant incentive. It had to be blunt. I don’t think it was perfect policy by any measure, but it needed to be blunt just to say, “Look people, the future is going to look like cheap electricity for six hours in the middle of the day. Figure out how to use it. Use your capitalism to figure out how to use it and we will.”
David Roberts
Give me an example of a business model that would be enabled by three hours of free electricity in the daytime. What kind of business do you want to start to exploit that?
Saul Griffith
Money laundering. No, hear me out. I don’t really want to. This is what I’m doing. Industrial laundry.
David Roberts
Industrial laundry?
Saul Griffith
Let’s say hospital laundry uses a lot of heat in industrial laundry if it has to be sterile, industrial laundry like hotels and hospitals. You need hot water for the washing process. More importantly, because it is so much of it, you can’t hand it out to dry. You need to use electricity to dry it. Storing that cheap electricity as heat, which is very easy and simple to do, and then using that free heat to wash your laundry means you can do a giant electricity market arbitrage, which essentially is money laundering, pun intended.
David Roberts
How long have you been working out that whole rap? Money laundering for you, David?
Saul Griffith
I’ve been doing my homework for months.
David Roberts
When you look at charts, I think the IEA had one recently of the difference of US solar costs — US rooftop solar costs and Australian rooftop solar costs. The big chunk in the US that makes it so much more expensive — there are several chunks, but the biggest one is customer acquisition costs, which are vexing in the US and appear to be in the neighborhood of zero in Australia. What explains that? Customers still have to do this, they still have to take action. Someone has to go talk them into it or prompt them to do it.
How is it that you’ve eliminated customer acquisition costs? What explains that?
Saul Griffith
At some point in your market there’s enough of this activity? You see your neighbor get it, you ask your neighbor, “How do you like your solar?” Neighbor says, “It’s bloody good, mate. Government helped me buy it. Now I’ve got free driving everywhere. I haven’t paid an electricity bill in months.” Then they’re like, “That’s a good idea, I want in on that .” Then they buy some. In fact, my neighbor saw that I was having a bunch of quotes and he’s like, “Mate, can you get a battery for me at the same time? Do you reckon if we add it together we’ll get a better deal?”
I’m “Sure, Paul.” Now Paul’s going to get a battery on the side of my deal.
David Roberts
It’s really just word of mouth, momentum?
Saul Griffith
You missed something. Remember at the beginning of the conversation, I was trying to structure this conversation about these 60 to 90 day delays. Those delays create your customer acquisition problem because people get to have all their second thoughts. It doesn’t seem easy anymore. It seems really hard.
I think the last time I looked, Sunrun’s annual report, 76 US cents per watt was the cost of customer acquisition. You pay more for the price of selling and advertising than we pay total for the installed job, including the hardware. A huge amount of that is the permitting, the inspection, and the interconnection delays. If the other side is going to engage in conspiracies, I would say that electricity utility monopolies that are vertical — that are threatened by you taking your house off solar — might be part of this problem too.
David Roberts
Word of mouth and the ease and speed are doing the marketing for you.
Saul Griffith
Yeah, and Paul’s “Do you like Alex or do you like Dave?” Meaning the tradies. I’m “They both seem pretty good guys.”
David Roberts
I just did a big pod on balcony solar, which is this — plug it into a household outlet panel. They legalized it in Germany. Now there are 4 million of these hanging off German balconies. They legalized it in Utah. It’s starting to spread in the US. Has that come to Australia? It seems especially for someone you who’s such a tinkerer, that this would be delightful to have in your toolbox. Is it legal in Australia and is anyone talking about it?
Saul Griffith
Let’s be honest, it’s cute.
David Roberts
It is cute.
Saul Griffith
It’s virtue signaling and it’s cute. It ticks all the boxes. I’m putting, I don’t know, I’ll probably end up with a 15.2 kilowatt system on my garage roof. I’ve got 6 kilowatts on the roof of the house. I will feed net electricity back to the grid. I don’t have my numbers yet, but I got a mate and he’s done it. He’s running two electric vehicles. He’s heating his pool with electricity. He’s got an all-electric household. He’s got three teenage daughters. It’s not a low-energy household. He’s producing 141% of the electricity he needs every year, which means that he is feeding back into the grid cheap electricity that could be making, if you had better market and tariff and policy design, that free electricity off his roof or very low-cost electricity off his roof could be going to his neighbors. And lowering the renter up the street’s prices.
That’s what could be happening. I’ll be in the same situation as him. I’ll be a net producer. At which point a single 200 or 400 watt panel hanging off my balcony is de minimis.
David Roberts
You’re a homeowner for one thing, so you have land and roofs.
Saul Griffith
We have other programs where the strata which owns the building together or the landlord can share amongst the renters. There is some proposed policy in Victoria here to compel the landlord to install the solar on the roof at the behest of the renter. They can’t reasonably deny that unless there is a historic reason or a structural reason.
David Roberts
They hate that.
Saul Griffith
There are other ways to solve this problem. I think it’s lovely, even if it just means that people are flying the flag for cheap solar energy. This balcony solar is a good thing, but I see it more as that flying the flag than the thing that’s substantial. It’s a hack.
America should tear the band-aid off and do proper energy market reform and you should do proper permit reform and you should do proper workforce training for deploying solar. Even if nuclear was free, you can’t get nuclear power to the home as cheaply as rooftop solar because it has to go through a transmission system and a distribution system.
You have to understand these things. In every possible future of this planet, the cheapest electricity will always be your rooftop solar. I can’t say it more clearly than that. If it is a blend in your system, it will lower the cost of the whole system. We will have many batteries deployed in your vehicles and your homes that it will be absorbed. It’s going to be okay, let’s stop hyperventilating.
David Roberts
You semi-entered my final question there. When I threw this out on social media, the main question that comes back is how do we do this in the US? What should we advocate for in the US? As you’ve made very clear, it is the permitting and interconnection that are the big — if you are an interested US citizen who wants to become an advocate for rooftop solar and you want to prioritize what you are advocating for, are those the top priorities? Is there an easy list of reforms that you should be supporting?
Saul Griffith
When we started Rewiring America, I wanted to raise an army of people who would show up to PUC meetings and hearings. You only need 12 people to show up to a PUC meeting to overwhelm the meeting. We should be able to raise an army. You show up and you say, “We want reform and we want guaranteed interconnection. There’s no reason why you should deny us interconnecting into this.”
David Roberts
Let me ask about that. Would a US utility respond to that by saying “just automatically okaying every interconnection request is not safe in some way”? Do they have legitimate reasons for making it take a long time? Or presumably they have some.
Saul Griffith
They might have to say that it has to be accompanied by a certain amount of storage. There are legitimate bottlenecks in the electricity system. This is a useful way to think about the electricity system. We can go from the turbine down to the toaster or from the toaster back up to the turbine. Let’s go from the toaster backwards. The circuit that the toaster is on is probably a 10 amp rated circuit which limits what you can put there. This is why you might want to put batteries in appliances that use a high load, more than 10 amps. You put batteries in the stove, like my friend Sam Kalish at Copper.
The next bottleneck is at the switchboard or the circuit board on the side of your house. You’d like to be able to dynamically move the loads around on that. That’s what SPAN is doing — my friend Arch at SPAN. That solves the bottleneck problem there.
The next bottleneck is on the other side of that, between that and the solar on the roof, which is a battery. That’s why you put a Tesla Powerwall or battery on the side of the house. That solves that bottleneck.
The next bottleneck is the distribution pole transformer. Those are prehistoric analog devices. The next frontier is putting some storage batteries and some digital controls on that. I’m working with people doing that.
David Roberts
I’m interested in that because that does seem like such a —
Saul Griffith
There’s a reason to have me back for my fourth. I want to rise to the top here.
David Roberts
Computing and intelligence is cheap now. It’s wild to me that every one of those could have a computer in it easily. Every one of those could be some version of a SPAN panel, every one of those little transformers on all those poles. It would be easy to infuse intelligence through the whole system.
Saul Griffith
What’s funny here is that Sam argues that it should all be in the stove and Arch argues that it should all be on the wall. These computers are free and they can — batteries everywhere, computers everywhere, controlling these digital flows.
The next bottleneck is the substation and then the next ones are the transmission interconnections above that. You just put some storage and some compute at all of these bottlenecks and you get higher utilization. That higher utilization again will lower the cost of electricity for everyone. We know how to do this.
Whether we can get to that future from here, given that we’ve granted so many monopolies, is the challenge. What is the purpose of democracy? I’ve been thinking about this a lot in the context of the US and a lot of it is about anti-monopoly, making the rules fair.
What is the classic case of monopoly, the one they teach in business school? The natural monopoly is the electricity grid. Because it is a natural monopoly, we should grant a monopoly to a vertically integrated utility. I think intimately entwined with democracy and power are the rules of the electricity market and who we grant the monopolies to. Remember, right now in most countries we are subsidizing because we guarantee the returns and the profits on their capital investments.
The electricity companies, we’re not guaranteeing the return. I believe in Australia if you’re going to guarantee the capital investments of the hedge fund that owns the electricity grid, you need to guarantee the investments of the household that’s making equally substantial contributions to infrastructure with their battery, their electric vehicle and their solar. That’s where the front is — you want to do the extreme version of this fight, you say, “Okay everyone, let’s have no protection of anyone in this market or provide the same level of guarantee.”
David Roberts
Everywhere guaranteed returns for individuals investing at home.
Saul Griffith
That should be the frontier of the fight. You should have pitchforks, meaning the people versus the plutocrats, meaning the utility monopolies. Why are you getting all of these subsidies and this special treatment? When these right-wing nutjobs do these conversations about how this is a subsidy for the consumer, they’re not really thinking about the whole system and how the entire system is not a free market and has been corrupted by these giant monopolies. This inane conversation where they’re blaming the rooftop solar is just to not recognize reality.
David Roberts
Disrupting the entire US utility model is a big —
Saul Griffith
Game on!
David Roberts
— is a big ask. Are there more proximate reforms that people who don’t want to tilt that particular windmill?
Saul Griffith
As soon as you go to your PUC meeting to make the deal more fair, you’re engaging in that fight. As soon as you go to reform the AHJ problem — which is another piece of this problem.
David Roberts
Specifically you’re yelling at the PUC. You want the PUC to tell the utility, “Make interconnection instant and automatic for rooftop systems,” for instance. That’s what you want the PUC to tell the utility.
Saul Griffith
That was one of the magic pieces of the Australian rooftop solar success story.
David Roberts
That’s the interconnection.
Saul Griffith
You could put conditions on that. We had conditions on it which had a 5 kilowatt limit in the early days, that upped to 10. Now I think it’s gone to 15. If you have a three-phase connection it’s gone to 30. You can have reasonable safety-based, technical-based restrictions but in America you just have ideological restrictions. You don’t have ethical restrictions.
David Roberts
The permitting reform seems more tricky because, yes, interconnection is just, you tell the PUC and they tell the utility. The permitting is the first thing you have to do — figure out who the hell is even in charge of it where you live and then who is in charge of them. Reforming permitting seems like a trickier thing. You’d really love to follow Australia’s example on this. Do a national, do a federal, some sort of federal preemption. Otherwise, you’re fighting all 10,000 of these AHJs. You’re waging 10,000 wars.
Saul Griffith
Let’s back off the ambition of doing it federally. Even though I think that’s not a bad idea. You just have to do this in one or two states. I’m going to throw out some states that could be interested. Florida, cheap sunshine. Texas, this is libertarian as hell. California, because you want to solve the problem. Washington because you had a great governor who was really interested in this stuff. New York, because you care. Any one of them does it and they’ll prove it’s a good idea and then all of a sudden rooftop solar will be really cheap there and then you win.
I bet on Texas or Florida to the chagrin of my California friends.
David Roberts
It’s sad but true.
Saul Griffith
God, guns and solar — get the government off my roof. That’s how you win this fight.
David Roberts
What is this SolarAPP+ thing that’s happening in the US? Contextualize that for us. How big of a solution is it? What is it? This is what passes for permitting reform in the US — utilities can adopt it. I don’t even know the details. Do you know what I’m talking about though? I think it’s your buddy Alex that you referenced earlier who came up with it.
Saul Griffith
I think this is Andrew Birch — Birchy.
David Roberts
Andrew. Sorry, Andrew.
Saul Griffith
Andrew also has some Australian history and founded a solar company called Sungevity with Danny Kennedy. They stared down the problem of rooftop solar in America for many years and went on to build a thing called the SolarAPP, which is now being absorbed by NREL, which is the National Renewable Energy Lab.
David Roberts
Not anymore. Did you not catch today’s news? Trump is renaming NREL. It is now the National Laboratory of the Rockies. No renewable energy involved in the name anymore.
Saul Griffith
I can’t solve the problem.
David Roberts
That’s just the latest dispatch from our madness.
Saul Griffith
Back here in Australia, my mate Fred, who has two electric vehicles, an electric heated swimming pool, all-electric house, he’s saving $9,000 a year with, wait a second, renewable energy. A lot of it’s solar, it’s rooftop solar. Eventually the economics will catch up with you people. You are having an ideological shift with your new regime. It’s a problem.
David Roberts
Let’s not race past the app. The app is — who is the user of the app? What does the app do? What is the point of this?
Saul Griffith
I don’t think the app is going to solve all of the problems. It’s meant to be an app that could enable states that would like to make the permitting fast, enable the permits, but it might just be giving you an idea of what you can do on your roof. It’s trying to take away as many frictions as possible. The frictions still are AHJ — a legal permitting restriction. The restriction is still a PUC interconnection restriction. I don’t know how far into those the app can reach. I think the app can identify these problems, but these things require change.
David Roberts
To wrap this final question up, if you’re interested in the US in making this easier, go to your PUC, tell them to tell the utility to make the interconnection process fast and automatic. Then maybe find your local AHJ or lobby your state lawmakers to pass a state law that forces permitting to go much faster. If you made interconnection much faster and permitting much faster, the whole process would get easier. Your customer acquisition costs would also fall just because the whole thing is easier. It would spread by word of mouth. Those are the two main levers that we want to pull in the US — one way or the other.
Permitting and interconnection.
Saul Griffith
This is going to sound unusual, but a little shout out here to my mother-in-law who is a wonderful woman called Jen Pahlka.
David Roberts
She’s your what-in-law?
Saul Griffith
My stepmother-in-law.
David Roberts
I can’t do that mental math very quickly. Yes, I know of Jen. I follow her work.
Saul Griffith
Jen Pahlka is a leading expert in the efficiency of government programs and she started something called the Government Digital Service with the US government that was meant to make things like getting a driver’s license easier by digitizing the process so that you could get your license over your cell phone, not in an eight-hour wait on the third day you go to the DMV. This is the type of thing that you would use if you were — and Australia did use because we’re highly digitized now in terms of our government services. They’re efficient and that’s how you can get a permit over the phone by your contractor while they’re on site. That office actually is the office that the zombie body DOGE overtook under Musk — Government Digital Service — because it was the office that had the digital tendrils into American agencies.
There was a brief moment where you could hope — and I know that Jen and I were engaged with trying to convince DOGE, “Hey, we believe in government efficiency. Why don’t you do things like permit reform? Elon, you believe in rooftop solar. Your cousins believe in rooftop solar. We know this is a part of a cheap energy mix. Can we do permit reform?” Unfortunately, DOGE was put towards a different purpose.
David Roberts
I think you mistook the purpose of DOGE. You read what was on the tin and took it literally.
Saul Griffith
We know how to do this. This is possible. I’m not sure how you undo the ideology of this debate. This is an ideological debate. Fortunately, in Australia the ideological debate is largely now over because the economics are in. I have a friend in New Zealand, Mike Casey. He is somebody you should have on your podcast. He runs the world’s first all-electric cherry farm. He’s got a giant solar array that he put on the roof of his shed. He’s got the first electric tractor in the southern hemisphere and is saving 50 grand or more a year on diesel.
What do farms do already? They farm sunshine. Why not farm more of it and run the farm on sunshine? His father was a conservative and I think New Zealand conservatives may be even further right than American conservatives. He and his father and the fact that they figured out how to make energy really cheap for farmers has changed the politics in New Zealand around renewables. Now the rural people are saying, “This is a good idea, this is cheap.” It’s possible to do it. This would also be true in the US. In fact, that company, that tractor is Monarch Tractor, which is a California startup, electrifying farming which is going to make really cheap farm equipment.
There’s a living example of the politics, and this is the conservative government wildly against this stuff 18 months ago in New Zealand and now in favor and doing electricity market reform that makes all this possible. Probably the first country in the world that will have the right-shaped electricity market for this new world will be New Zealand. Interesting, because Mike almost single-handedly has successfully made it a bipartisan issue. “Cheap electricity for New Zealand. That’s going to make farming cheaper and everyone else’s bills cheaper. Let’s do it.” Extraordinary shout out to him and his team at Rewiring Aotearoa. It is a living example of you can change the politics of this.
David Roberts
Final, final, final question.
Saul Griffith
Is that how you name your files as well?
David Roberts
Exactly. Underscore file, final, final dot, final parenthesis, final. The logics you describe hold in every country in the world. I guess there are some super northern latitude, the Arctic Circle or whatever, but the basic dynamics you’re describing are true more or less across the civilized world. Do you think that the triumph of rooftop solar and batteries is more or less inevitable and do you think we’ll see that take hold in our lifetimes?
Saul Griffith
I believe it is more or less inevitable and I believe that policy can prevent it. It’s not guaranteed, but I believe it will take over in your lifetimes. If you want heuristics for the audience, I think heuristics are useful. If your country is an importer of fossil fuels, it is more likely that rooftop solar makes sense.
David Roberts
80% of countries, I believe, or 80% of people in the world, live in a country that imports fossil fuels.
Saul Griffith
That’s because if you’re an exporter of fossil fuels, likely your prices of gasoline and your prices of natural gas are a little bit lower than somebody who’s an importer of those things. That’s a precondition that makes it a bit easier. Another precondition is how far north or south you are from the equator. In my mind this now works to about Sydney is at 36 degrees or 34 degrees, but it works to about 36 degrees plus, 36 degrees minus really convincingly. Every year that the solar gets 1 or, every few years that gets 1 or 2% more efficient, that nudges a little bit to the north. Every year that solar gets a bit cheaper. Every year that batteries — more importantly now — get —
David Roberts
Batteries have much running room to not just get cheaper but better.
Saul Griffith
We’re ordering batteries now at scale at US$190 a kilowatt hour. Those things are guaranteed more than 10 years warranty. Levelized cost of storage looks like it’s going to hit 5 cents a kilowatt hour. Add that to 3 cents or 2 cents a kilowatt hour for the installed solar. That beats the price of electricity everywhere in the US.
That’s not to say that rooftop solar can do the whole job. I have never said that. I don’t encourage people defecting from the grid. There are too many advantages from networking. It’s to say the cheapest energy system maximizes rooftop solar, maximizes local solar, backfills the rest with pumped hydroelectricity and geothermal and wind and all the nice things. Then you get the lowest cost system with the highest utilization of the wires. That’s going to be true in every country. I think it’ll go north and north and north. You can easily see where it’s going to be between 45 south and 45 north, which really covers the great majority of humanity.
David Roberts
We will end on that hopeful note. Although I can’t help but notice that the fossil fuel exporter thing is a bit of trouble here.
Saul Griffith
They’re getting hard to sell that you have to do punitive tariffs on people to sell your gas now.
David Roberts
We’re forcing people to take our LNG exports.
Saul Griffith
That’s what I mean.
David Roberts
The perverse effect of raising natural gas prices domestically, which makes natural gas less competitive in electricity in the US. There is a weird upside of that. As always, it has been a great pleasure, Saul, as always. It took twice as long as I intended. When you come up with a cool transformer with a battery in it and a computer in it that is cheap, that you can hang off a wooden pole and transform distribution systems across the world, please come back and tell us all about it.
Saul Griffith
I can come back next week.
David Roberts
Sounds good.
Saul Griffith
You think I’m joking? We’re ready.
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. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I’ll see you next time.
