The Exchanges

Q it seems like there has to be a way to drive customer acquisition costs down dramatically, which must come from some broad recognition That residential solar is an, is an attractive asset for homeowners, but just doesn't seem to have unlocked yet. And I wonder, first of all, whether you agree that that's true, like what is the obstinate customer acquisition cost problem? And second of all, what changes that?

A Well, I think, so yes, there are some differences, and I would say a lot of the differences are around, when you think of customer acquisition costs, you have to think of the process to getting a customer to installation, so it's not just the process of getting the customer interested in solar, right? It's the customer of really, the cost of getting them through that process, and when you look at it in the United States compared to other countries, you know, the reality is we have We have a lot of built-in complexity that, that comes at the local level. It comes at the utility level. It, you know, it's, it's, and in some states, it's way more streamlined than other states. So, in fact, the state I was working in, in Vermont, they actually did a lot of work around really streamlining the process, and when you streamline the process, you actually help streamline the cost. Sunrun was a big part of also something that I know you've probably seen Um, Secretary Granholm talking about, which is the solar app, right? So there are, there are technological solutions to drive down cost, which is really about simplification of process. And if you look, you know, particularly in Europe in certain areas where you see lower costs, it's because there was a tension again at the regulatory, at the government level, at the local government level of how do we make going solar easy? Right? Not how …

AI assessment note: “we have a lot of built-in complexity that, that comes at the local level”

Q going up a little bit because of supply chain issues and trade issues and things like that. Um, soft costs have been, You know, we're chipping away at them, but they've been relatively flat, and I wonder whether, you know, we, historically, we had this mindset of, like, the only way to, to get the next set of customers is to make solar cheaper. Do you think that's still true?

A I think that's a great question, and I, I think that it is true. So again, not all customers are created equally, right? So not, not everybody is motivated by the same things, but when you think about Just 20, 21. And what an, ah, like an incredible year it was in the context of the number of billion dollar disasters that affected literally tens of millions of customers around the country or, or people, you know, homes around the country. So, you know, what you're seeing is more and more customers are interested from a resilience perspective. They're, they're interested from a perspective of understanding that no amount of, you know, storm hardening by utilities is going to make them have reliable power on a regular basis that really going with Sunrun. So again, when I think about customers that we have started working with in Texas, in California, so much of the motivation is about feeling, you know, honestly, just more emotionally safe in your own home. So, so much, you know, again, there's a certain amount of customers. It's so much the environmental, you know, benefits. Um, so many that want to be feeling more energy independent, and now increasingly so many customers that basically are craving that emotional and psychological security and safety that they get the feeling of when they have, again, particularly now that we have so many customers going with solar and storage.…

AI assessment note: “I think that it is true. So again, not all customers are created equally”

Q of them are making it. Depending on what you consider an economic decision, I suppose reliability of home electricity is economic to a lot of people. But I guess, how do you think about Um, packaging it for customers. Is the pitch, because the solar gives you savings, the solar plus the storage gives you maybe slightly less savings, but more resiliency. How is it framed to a Sunrun customer?

A So, I mean, first of all, customers have been paying for resilience for decades. So there are, you know, again, I mean, one of the things that, that, uh, concerns me from a climate perspective is when we do see these natural disasters, what you see so many customers do, because they can do it like that day, and they're so shaken to their core by what has happened and by the lack of utility power, uh, you know, for extended periods of time, You know, so many of them will race to the store and get a big old fossil generator. So let's remember, customers have been spending money on generators, and in many cases, big, expensive generators for a long time. And that has actually continued to increase because of this issue. So I don't think, I don't think storage, you know, in my experience, is something that, again, it is about, oh, what's my payback? Um, yes, I mean, do customers always love that if you get a payback on top of it? Like, yay, wahoo, but it's, it is, it is, it is, you know, something at its core that is so much about emotional security, um, you know, because again, you know, giving, use, utilizing California as an example, yes, there, there could be some math that is supportive of storage, but the reality is I think the key driver that we hear when we talk to customers is Um, and I talk to neighbors is, you know, they talk about the events where they have their power …

AI assessment note: “it is, you know, something at its core that is so much about emotional security”

Q solar, but it's been particularly volatile and, You've been crazy over the past five months while you've been in the job. We've had these crazy public markets and the Build Back Better plan, you know, sort of rose, didn't pass, and then has been plodding along potentially with some future that whole time. Like, what's the experience been like for you during the five months you've been in the job?

A Yeah, so, I mean, overall, the experience has been just tremendous. I mean, I feel really blessed to work with such an amazing, talented team doing incredibly important work for the planet. So, as you know, we are an incredibly mission-driven organization. It's all about the mission of creating a planet run by the sun, about really dramatically reducing fossil use, um, and transforming the Uh, the energy economy and the energy grid. So, so it's been a really, uh, you know, tremendous, uh, start here. You know, in the context of the external environment, you know, I have been, you know, really in a, in the, like, clean energy space. That's how I viewed the work I was doing before at Green Mountain Power is essentially being about, you know, accelerating a consumer-led revolution to a very different Energy grid and energy system. So there's a natural, like, um, uh, volatility and, um, you know, ebbs and flows that go when, you know, you're really on the front lines of not just combating climate change, but the front lines of trying to really create a completely different energy system. So in many ways, it feels like an extension of what, of, of sort of a, you know, the, the roller coaster of leading transformation.

AI assessment note: “overall, the experience has been just tremendous”

Q What would unlock, I mean, you're saying that it should be scaling faster than it is. What would unlock it? More, what would unlock the ability to make virtual power plants, uh, using Sunrun batteries ubiquitous?

A I mean, honestly, creating a culture of yes versus no at the, at the sort of incumbent system level. So, you know, part of the challenges, part of the challenge is really fundamentally, and I dealt with it a long time on the utility side, right, is that, you know, these structures are fundamentally seen to look at innovation with doubt, with skepticism, and with viewed as a threat versus an opportunity. So, So much of where you see, you know, the really good stuff happening is because you have leaders that are willing to, you know, basically lead towards a different kind of future, a different kind of cultural approach. Um, you know, so, yeah, so more of that would, so more radical collaboration, more culture of, like, how do we get to yes? How do we figure this out? How do we make it work? Not how, like, oh my gosh, This is such a challenge. Oh my gosh, this is a problem, right? Flipping that would accelerate it a lot faster. So again, we're excited by the work we've done, um, because we believe that all of those things build on that momentum to create that more affordable, accessible energy, clean energy grid for all.

AI assessment note: “creating a culture of yes versus no at the, at the sort of incumbent system level.”

Q maybe haven't seen big outages. Do you see a big divide in terms of, um, what drives consumer adoption in different markets based on, you know, basically the recency bias of, like, have they had an outage, a big outage in the past couple of years? Or is this trend toward the desire for resiliency somehow shaking off on everybody despite the fact that not everybody has suffered from it?

A You know, that's a great question. I mean, certainly, you know, certainly what I've seen, I've had, you know, been, I'm a boots on the ground leader, so since I've taken this job, I've been in a lot of our states, I've been in a lot of our warehouses, I've been with customers in the field, and, you know, again, you see some customers that are in areas that are very, I would say, very reliable, either because they're super close to a substation, they're not in an area that gets hit by a lot of You know, major climatic events on a regular basis. Um, still very interested in solar. So, so very much interested in, you know, having that, that bit of, that sense of energy independence, of generating their own energy to be used in their own home. Um, but, but we are absolutely seeing that the climatic events all over the country are driving up adoption. Um, and it's, and you know, and I would say it's hard to find Areas of the country that aren't affected in some way, frankly. So, you know, there, there, you know, it's, I think, I think it's pretty widespread. So I think we're seeing the increase in climatic events affecting pretty much every region of the country in some way or another.

AI assessment note: “customers that are in areas that are very, I would say, very reliable... still very interested”

Q post-residential solar, both things Sunrun is already doing and things that might be on the horizon as we head towards sort of a home electrification universe. But let's start with the basic bread and butter that Sunrun does, which is, uh, Selling, financing, and installing residential solar. What is your take on where that market is today in the U.S.? Like, where are we in the trajectory of residential solar?

A Well, yes. So the, the history of this company is that it was really a pioneer, not just in bringing solar energy to customers' homes, but for doing it in a way that made it financially accessible to all. So that, you know, in the context of solar, yes, you're right. We're working on a lot of additional innovations. We really see ourselves as ultimately being about whole home electrification and meeting customers where they are in their energy journey. And being that beloved trusted partner, combating climate change and helping homes become affordable, resilient, et cetera. So, but back to the fundamentals of your question, like we are at three percent of seventy seven million addressable homes. So, so while we are already moving towards, you know, radically expanding what we provide for customers with our Ford partnership, With work we're doing around this really innovative new panel called SPAN, you know, we still fundamentally see incredible growth in the solar space, and obviously also storage has become such an important part of the solar experience, so, um, you know, we see tremendous growth in, you know, what I would call the fundamentals around creating a planet run by the sun, and then also see just so much opportunity To then be that beloved trusted partner for customers in all other aspects of their whole home electrification and transportation journey.

AI assessment note: “we are at three percent of seventy seven million addressable homes”

Q to them and to everybody like that this works, is it going to be reliable in all instances? We can show you data from our aggregated fleets of assets to prove X, Y, and Z. Like, what, what does it actually, what, what does it take to, to reach the level of conviction amongst, you know, I think legacy, but also rightly concerned with reliability, reliability actors in the ecosystem?

A Well, I mean, I say often culture eats strategy, and I actually think what we have, we Is way more a cultural challenge than a technical challenge. So again, in my experience, there's no end, there's no, like, bottom to the rabbit hole you go down, um, when what you're trying to do is prove, like, to your point, like, should we prove the technology? Like, the technology works. It's about getting to a culture of saying, um, Like, how, based on what we know, how can we leverage that versus a culture of, of skepticism and doubt? And, and I hear you loud and clear about the importance of reliability. You know, it's, it's so interesting to me, though, having been, again, on the, on the utility, the grid side of things for 20 years, and, you know, now, and, and being a leader of distributed energy at the same time, right? And how do we How do we embrace it? Because, you know, we were seeing that we were going to get to levels, we could get to levels of reliability that grandpa's grid was never built to get to, again, by embracing these kinds of distributed assets. So we were able, again, and then when you can aggregate those to what we called, you know, not just, there was sort of like this talk for decades about beat the peak, right? Like, and the problem is the peak, and we have to, you know, what with distributed Technologies utilized well in a way where you're like this, the, uh,…

AI assessment note: “what we have, we Is way more a cultural challenge than a technical challenge.”

Q So why are we at three percent today, right? Like it's been a number of years now where residential solar for a lot of customers has been economic. Uh, we have financing mechanisms in place that make it such that you can save money on day one. What is, what's the barrier to more rapid adoption, do you think?

A Oh, you know, I think that really what we're seeing now is we are finally at that tipping point that I and many others have been working towards in this space for years, right? Which is, you know, what I would say the customer-led revolution tipping point, where we are seeing now, you know, growth numbers nationwide that are the kind of numbers you would expect to see when you see customers no longer are seeing it as a technology that's like, um, You know, your, your uncle might have at the Thanksgiving dinner table, like that one person might have. So I think the adoption curve you're going to see is going to continue to really dramatically accelerate in the coming years. You know, as to your, your question about, well, why, why not faster? You know, fundamentally, I think it's because whenever you're bringing a different, new, and improved innovative technology, um, against the sort of You know, hundred-plus-year-old system and way of thinking. You have to deal with, you know, just hurdle after hurdle and roadblock after roadblock, you know, whether they're policy, regulatory, utility-based, right? So they're, and they, and they keep coming at us, right, as an industry. They keep coming at us, which are these roadblocks that, in my mind, are fundamentally about protecting, preserving, and defending status quo, right? Versus really radically embracing what could be and the ene…

AI assessment note: “hurdle after hurdle and roadblock after roadblock, you know, whether they're policy, regulatory, utility-based”

Q things like that. How do you think about that moving forward? Does, does every residential battery that gets installed at some point become part of a grid services program? Or is it sort of, well, there are pockets where this makes a lot of sense because the grid has big capacity needs and we can value them or something like that, but you know, it's going to be in pockets.

A Yeah, so this is an area I'm very passionate about. So Sunrun does have 12 virtual power plant, uh, projects in place. Uh, Sunrun was one of the pioneers on the solar side around, you know, grid services, around how do we make a more affordable, cleaner energy system for all. And I was doing the same work as a utility CEO. So back, way back in 2015, uh, we were one of the first to aggregate storage devices in people's homes. To utilize them to, you know, basically drive down costs, drive down carbon, and make the grid more resilient and more effective for all. So, yes, we're going to continue to do that work. Um, you know, it is because it is work that is naturally working with, again, the incumbent system that isn't necessarily wired for innovation and change. Um, you know, it is It should be scaling a lot faster than it is, but we're going to continue to be the leader in demonstrating again that we can get to a more affordable, resilient, uh, grid for all that again helps us combat climate change through radical collaboration. So I talk a lot about the need for radical collaboration because, and it's radical because it needs to involve regulators, it needs to involve utilities, it needs to involve Technology leaders like ourselves and many others to really say, how can we together create systems that incentivize this kind of system that is really leveraging these distributed …

AI assessment note: “So Sunrun does have 12 virtual power plant, uh, projects in place.”

Q But they're not necessarily making those decisions at the same time that they are considering solar while you're sitting in their living room, and maybe that's the thing that is A bit of a roadblock from just selling it all as one package and wrapping in the heat pump and the solar and the EV charger or whatever it might be?

A Yeah, I mean, and a part of it always at any company, right, is, is being clear about what we're really good at and where, you know, what are the innovations. So again, we're working on lots of innovations in the context of transforming technologies, uh, around whole home electrification. So again, Always making the decision, well, are we the best to be, like, a heat pump installer, or are there partners and folks we can refer people to? Um, you know, yeah, so I think, I think where we are is always making sure in those conversations that they understand all the ways that then they can also save money by generating solar on their own roof, um, and again, driving down their heating and cooling costs by using technologies like heat pumps.

AI assessment note: “are we the best to be, like, a heat pump installer, or are there partners”

Q at a different time from buying a vehicle, from updating your HVAC to whatever else it might be. So this is at least the opening, the possibility of combining a couple of them. So I'm curious to walk through what the customer journey will look like here and then how you think about layering things into it. So, I go to buy my Ford F one 50 Lightning. What happens?

A Well, again, back to the broader thing. So we, again, want to be the beloved trusted partner for where you are on your energy journey. So you're absolutely right. It's not necessarily a one stop. I'm going to do everything in my home, although I think we're going to increasingly see customers do that. But yes, back to the Ford experience, it would be the opportunity to make sure that you and you've made the decision, you know, in the example you're using where you want to go to the Ford So as a part of that experience, and a part of that experience of getting that installed, it also is the opportunity to make sure that the customer also understands the power of generating their own power with solar, um, and adding other kinds of electrification as a part of making this whole system work. But, you know, yes, for many customers, you talk to them, and then they come back to you a year later, and they say, Oh my gosh, I'm ready now. You know, some we, we anticipate we'll be ready right in the moment, um, to do both of these things at the same time, and some may be on a journey that we're going to meet them back again in a year, two years, but again, we want to be that beloved, trusted partner on the whole journey of whole home electrification, electrification of transportation, and providing them the opportunity to generate their own energy.

AI assessment note: “a part of that experience of getting that installed, it also is the opportunity”