title: DERVOS 2025: Permissionless DERs Wait for No One
author: DER Task Force
contenttype: podcast
publication: DER Task Force
published: 2026-01-14T14:00:00
sourceurl: https://api.substack.com/feed/podcast/184128519/8efbb9ff90d56a0dfc26bf022cfba966.mp3
word_count: 5686
Welcome to another edition of Thamda Now. All right, that was cool. So we're here to actually talk about permission less a little bit in more of a panel of discussion format. You guys know Cole already, you know, Stefan already, but we got introduced Kevin and Bala. So Kevin, why don't you tell people a little bit about yourself and what you're doing? Hi, everyone. I'm Kevin Chiu. I am the founder and executive director for Bright Saver. It's a relatively new organization that we started January of this year. And we've been working on state-by-state legislation that allows permissionless derives, essentially. So we started with Utah with HB340, which allows people to plug in up to 1.2 kilowatts and potentially send that energy and be able to plug that into an outlet and feed energy back into their home grid. And to do that without interconnection agreement, without having to get a permit, it forces the utilities to just accept it without charging any fees. So kind of a really simple bill that was about two pages long, but we hope has opened up the market for lots of amazing companies to then innovate and create new technology around. And it just recently we announced New York with Senator Krueger, yes, and Gallagher. And so it's called a sunny bill. We've got Pennsylvania also announced as well, Vermont, New Hampshire, Maine, and we've got about another 15 states or so that are actively considering legislation for the 26th cycle. So hopefully, this will provide a lot of air cover for all of the amazing companies in this room to create new technologies that really become permissionless, right? No interconnection, hopefully no permits if you build it in a way that doesn't attach to a structure. You don't have to worry about the AHJs and so forth. And we really just kind of want to see this explosion of new technologies and innovation come to market. Awesome. Awesome. Awesome. Bala? Hey, everyone. I'm Bala, the CEO and co-founder of Critical Loop. And we slightly differently than the other folks on this panel. We focus on industrial scale solutions. How do you get access to power quickly for large megawatt scale industrial customers? We take on really challenging projects there. I come to the energy industry from the aerospace industry where I got to do some cool things, like putting people in space and stuff like that. But yeah, very excited to be here today. Awesome. Awesome. So I want to start with, like, why? Why? I mean, why? We saw people set up batteries and solar panels really quickly. James talked about some cool stuff they're doing, but, like, a cement why is permissionless or at least less permissioned? Why is that interesting? People, I know you're at Tesla before, you worked on Powerwall, obviously a huge success of a product, but, like, what was your experience that drove you to want to do something a little different? Yeah. Powerwall and then span, you know, both really category-pushing products. I love, I'm the biggest evangelist of both of those products, but I think, you know, I was also tasked with helping scale those products and confronted with how challenging it is in a residential context to do these expensive upgrades. And, you know, if we just think about the numbers, you know, we've got 130 million households in the U.S., 70 million are that single-family home, owner occupied, you know, potential Powerwall customer, but that means there's about half of residences who aren't, who couldn't get a Powerwall if they wanted to, including me, I rent in San Francisco. So maybe it's a little bit selfish in some way, but I think also that the reality is people are getting hit with worse outages, you know, we've had more billion-dollar weather disasters in the last three years than in the entire 2000s decade combined. We all know people are very aware of their power bills going up now, and we have the convergence of cheaper batteries, more capable edge compute, it's also come down in cost. So it's this really magical moment where the technology has kind of reached the point of maturity, and the need continues to grow. So ultimately, you know, this is really just meeting people where they're at with what they want. And then the follow-on benefit are the grid benefits and the DERPs. I think, well, underscore the point about that no one buys a Powerwall because they're excited about VPPs. That continues to be true, and we should all internalize that. You know, people buy the stuff because they want, in the residential context, because they want comfort, convenience, peace of mind, a sense of control, like all of these, you know, very emotional reasons, and to the extent they can make money or save money, great. Well, and is not the key, though, the reason someone would buy a Pila or a craftsman system is because they just want to buy a product. They want to click buy, it shows up. They don't want to buy into a process. They don't want to wait six months for something to hopefully happen. That's the barrier you guys are solving, right? That's right, yeah. Bala, you're in aerospace before, I don't know if we can say the name of the company or not, because you avoided it. But what, like, were there interesting power challenges there that you experienced that inspired you to take this on, like, do you find that big companies trying to do like intensively difficult things have trouble with access to power? That's a great question. Yeah. There's been a broad resurgence and interest, at least, in re-industrializing, building more factories and stuff like that, and the company I was at SpaceX was kind of at the early end of that stuff happening again in the last decade or so, and definitely like standing up in new facilities, standing up a launch pad, being able to, I mean, these are critical facilities. Sometimes you have to, your whole operations, you know, hinges on a single second, it has to work. You have to have power, or redundant power, for that very single second of launch, and make sure that you can fly. So certainly, those things were inspiring, but broadly, I'd say, I've always worked in kind of industrial settings, and I understand how important that is. And to me, it really felt, and I think you're going to touch on this in a later panel today about the electoral state. I think it's a really important factor to, I mean, yeah, power is what is needed to do any industry. So, yeah, it feels like an advanced society that's doing really interesting, innovative things, experiments, doesn't wait five years for power, right? When you want to say, send a rocket to space, or fire up some GPUs to build God, you know, like, that society doesn't kind of like sit around waiting, right? It's accessible. So let's get into, like, what's, so that all sounds amazing. It's a cool vision. Like, what's, what, what may be the challenges, or misperceptions, or whatever there are out there, Kevin, like, you work on this stuff all day, trying to get enabling legislation out there. I want to start with, like, is this legal in all 50 states? Like, can I just plug a solar panel into my outlet? So the main thing that would stop you would be the utility. And so it depends on where you live. So if you live in a rural area, you've got to co-op, they probably are not going to care at all. They might not even know. They probably can't detect it. But if you live in California, in Northern California, where there's PG&E, they've got a smart meter everywhere, they probably will know that you've plugged a solar panel into that wall. And our, just, you know, let's say it's a bright summery day, you go out to lunch, your base load of your house is not using all of the electricity you're generating in that solar panel. That electricity will flow back into the grid unless you've got a craft storm unit that's preventing it, you know, from going back there. So that's what we're really trying to solve for it. And let me just back up a little bit. What inspired our work was what happened in Germany. So back up four years ago, the Ukraine war erupted. Germany was very dependent on Russian gas for electricity generation. And electricity prices about 10 next in one year. And so these industrialist Germans just basically took their rooftop solar units, kind of jury rigged it for a DIY approach and then hung it off their balconies or anywhere that there was sun and plugged it into a wall socket. And so giving you an idea, Germany was one of the first nations in the world to subsidize rooftop solar. So from the year 2000 to 2025, there's roughly three and a half million rooftop solar units that have been installed for the first country that really focused on this. These solar has gone from zero to four million households in just four years. So that is just enormous in terms of the growth. Obviously these are small cities. Yeah, it's when we talk about gigawatts, we've got about three gigawatts from the combined balcony solar right now. But it's really about the participation. And I think if we're wholly dependent on our government and elected officials to enact policies and build infrastructure that can't take years and years, and then you've got a switch, whether it's at the national level, the state level and so forth, you can see a lot of, we've seen just so much happening, I don't even tell this room, what's happening. But just a lot of things can change. Every time there's a major election cycle. And so I think that the thing that I'm so passionate and excited about is that market forces are now pushing the types of products that we just saw. It's not about subsidies anymore, it's not about governments mandating something. It's just about people, whether they care about resilience, whether they care about saving money. That's what's driving the market today, and we're basically just advocating for legislation that allows people to do this, allows people to take the sunshine shining on their property and save money from it. And I think that's a very popular approach right now. Stefan, what would you say to the idea that like policy is required to enable this market? I'm not trying to put words in Kevin's mouth, I don't think you were saying that, but I think some feel that way, right? I heard you say earlier, all 50 states, tell me about that. From a technical point of view, it's legal. You have to consider certain aspects, absolutely, break room asking, and we'll get into some of that stuff. We don't have to get into technical details now, but you can solve everything with existing technology, right? Where we do need legislation, and that's where Kevin is working hard on getting us, is to ensure that it is permissionless, that you don't need an interconnection agreement. Mind you, we are working with utilities, and we are getting them to a point where they say, well, we understand this system does not require an interconnection agreement, but it's still under the terms of zero export, so behind the meter, right? So what these laws allow us to do is then sell systems without having to require a power meter. Yes, that is very true, but at the same time, what we do see is that people want the power meter. The power meter is essential in a system like that, because it'll actually teach you when you're using how much power, and when you can use more solar power. It creates an efficiency that you don't get with just solar power. But it is good because it opens the doors with regards to the utilities, and it also helps with insurability, right? Because essentially, what we want to say is these systems are essentially appliances. They should be insured under a regular household insurance. That's what these laws really should focus on, and they are focusing on this two-good part. But technically, UL has all the standards it needs, essentially, to allow this. I guess, yeah, that's what I wanted to ask next. I guess interconnection aside, is this stuff, is it safe, is it certified, is it generally accepted by electrical engineering practices? What do we kind of have to hang our hat on here, if anything? So we have, at the component level, we have all the certifications that we need. The main issue is that when you plug something into a wall outlet, if you're going to use a standard 120 volt instead of having an electrician come by and put an inlet, for example, into your house. So the way that works in Germany is you just plug it into a standard electrical outlet, and here would be a standard 120 volt nema outlet. And so for that to work, there needs to be a UL certification that basically certifies that you can inject current into the outlet. So that's one of the things that it's happening. It is a project that UL right now, and we hope that any day they could publish that OOI at this point. Any day since May, any day since May, that's true. I mean, it might be worth also just like mapping what this UL, NEC interconnection type of thing is, just by looking at, you know, existing product solar and power wall. And I would often remind folks that a lot of these concerns that were raised with, in electrician installed systems, rooftop solar, power walls, also were not granted for free out of the gate. Those were also, you know, a game of manufacturers building products responsibly, taking them through a process. Codes and standards are not stagnant, you know, handed down upon high thing. They're co-written by the trades, the manufacturers, advocates, and all of us, and that's the moment that we're in now. And I think the opportunity and the responsibility, maybe as manufacturers, is to show that there is a responsible way to build these products and follow standard practices, you know, every fridge, kettle, turkey fryer, whatever, in theory that you buy should be marked by a nationally recognized testing lab, UL is one of them, InterTech, CSA, there are a number of them. And that ensures a product meets a basic level of safety, usually focused on things like is it going to shock you, is it going to burn something, you know, is it going to explode? So when we say permissionless, it's really not no permission, Wild West, let's go crazy. It's front-loading the permission in a way that we can deploy the stuff in a way that makes sense, which is how we've kind of agreed, it's a social contract we have for existing things in our home already, and you know, it shifts the permission asking up front so that you as a household don't have to do it. Yeah, it's about a given deployment, not being, you know, quote, permissionless, because all of that's been arranged up front for the whole, you know, N equals whatever. Exactly. A national electrical code, NEC, you know, is for the most part intended for these kind of customized installations, right, you're doing rewiring, you're, you're assembling things on site, you know, and you're taking UL listed components, whether it's a circuit breaker or a panel or wire, all of these things carry certifications and you're building a system out of it, right? So that kind of construction activity has a regulation, kind of a framework around it, a building inspector will come check it out, a licensed electrician carries it out. All this is really geared at like insurance, you know, at the end of the day in safety. And then if you are interacting with the power grid, the interconnection agreements kind of kind of come into play. So I hope that's like a helpful framework, you know, there are multiple checkpoints along the way. And I think a lot of this is just right sizing it to the type of product that you're building, you know. I talked to PG&E when I changed my microwave, nor do I talk to, you know, anything. So, you know, again, right sizing for the style of product that we're building. Yeah, it kind of feels like a key point for this space to like iterate or speak about publicly is like, there's actually a lot more risk in projects that are assembled on site because then you're counting on every electrician in the world being a good one and every, you know, engineering set of drawings being done properly versus, you know, products that are certified to meet a certain spec really don't don't leave that spec. I think you could argue this is a actually very much safer approach. Well, here's the risk, right, outages are not going to magically solve themself. So I think the risk is if we aren't able to move things into a sensible domain, the pendulum is going to swing the other way and you're going to have people DIY-ing unsafe products that they're buying that are unlisted, you know, and hacking things together. Just go on YouTube. You can find a lot of this. Yeah. You go on Amazon. You can buy solar inverters on Amazon, you can buy the solar panels, plug them in, team and solar panels. That's what it is. Yeah, absolutely. Or eBay. Or eBay, yeah. So that's why companies like us we're working with specific bodies to make sure that it is safe. So for instance, we're working with Berkeley Labs, Flex Labs specifically, they're using our system to develop certain ideas of what is required within the US market for this and then UL confers with them. So it is, at the moment, still a small-ish industry and we're all working together to make this safe because frankly speaking, the cat's out of the bag, the technology is here, people can buy it, better to buy a safe system that is regulated. Yeah. And it's all the things you said apply to what we do, except we're at 480 volts and three phase often. And yeah, and you frontload the work that's you put the right amount of permissioning we take that on for the customer effectively by building it into the product and that picks time and money in to do but then it makes it easier to deploy ultimately. Yeah. The other thing we try to do on our end, for example, we focus the problem on, you know, the parts that are unique and challenging to the industrial setting are around integration. So we focused a lot of our work on, you know, how do you make the power control system certified to the right UL standards to make, behind the meter, interconnection easy. If you're offering time to power, you need to show up on time. And well, could you even just step back and tell us what, like, I know what a battery plugged into my fridge looks like. I know what a battery in my living room looks like with the solar panel in the backyard. What even do industrial permission lists or less permission says, like, what are we talking about? Yeah, we're talking about a smart switch gear that coordinates a number of assets. You can think of like 20 foot container size batteries. And in fact, one of our partners will be on one of the next panels, LG Energy Solution. And yeah, there's like five megawatt, 5.1 megawatt hour systems that are certified that we tie in with our batteries, with our control system and control. And often in concert with other generation that might be at the side, solar, or generators, I think you touched on it on the earlier panel. And you can think about, like, that could be scaled to any size, right? Like, you build this atomic unit of like two to five megawatts and then you can kind of scale that to their appropriate size. But it's not small. I must see an eye person myself. And I've always kind of observed that, you know, diesel backup generators are the most ubiquitous permissionless stir out there, right? And why? Because there's this, we've all agreed that a transfer switch, like, it's all okay, right? Like, there's no interconnection. Obviously, there's permitting for other reasons for construction and stuff. And I've always been curious, Paula, like, is there a world where, you know, more maybe advanced systems, you know, big, big batteries, whatever it might be? Kind of just take over that, right? Live behind transfer switches, but actually participate in the grid and maybe take the building off the grid for four hours every day when prices are high or something like that so that they can be deployed really easily because the same problems persist in C&I, you call a local business and say, I want to give you a battery. They say, great. And you say, it's going to take a year to get permission. They say, I might not even work here any year. So is that, is there a future for that stuff? Yeah. I definitely think there's maybe we talked on Twitter about this once, but our ex probably. Yeah. But yeah, how can you value stack those assets, right, such that, you know, could you have relocatable assets that are, you know, at the megawatt scale that, you know, are serving some power boosting need at a site, but when they're not needed there, they could be relocated, it could be like every few years sometimes or it could be every few months or days might be crazier, but yeah, it's possible. And I think to your point, like the ubiquity of diesel generators, people have this perception of what their reliability is. And it's like, how do you achieve that? I'm saying perception very intentionally. Yeah, how do you achieve that equivalent with the battery? And making it easier to connect it is probably a good starting point. I have one really random question for Cole and Stefan. Why haven't like power tools and like lawn care, like, it feels like there's a whole future ecosystem of like batteries that do stuff for your house, do stuff for you, but not in your house. Like, why haven't we seen any of those folks get involved? Like why isn't Milwaukee have a power wall? There's so many answers to that. The two technical answers, like it's not really the right cell out of the time, but even if you like, you know, forget whether it's going to last long enough for you to kind of get the value out of that. The software component is really essential to this, you know, and like, the fact that companies like Enfays and Tesla are really leading the residential market, in terms of market share, I think is, it's a testament to that. The software ecosystem, you know, actually making these things do the promised job of saving you energy, shifting your energy, pairing with solar. You know, what you're describing is like, interact with your home is, it's a software challenge. And, you know, I don't know anyone at Milwaukee personally, but I would wager to say that if you mapped out their engineering team, software engineers would be a relatively small fraction. So I do think there is a world, right, where batteries find their way into everything, the impulse stoves, the, you know, other appliances, and I think the risk from my perspective is that we end up with pretty unintelligent batteries in those devices, maybe just focused on backup power, and then we, you know, mine twice the amount of battery materials that we need to out of the ground, because, you know, we're not using those to the advantage of the grid or the home, you know, and again, it's software, but I'd be curious to hear your thoughts. That's pretty much it. There's so much more to an intelligent home battery than just the battery cells. When you think of a Milwaukee battery, I mean, there's not that much behind it, but with regards to battery management system and software packages, that's where the magic lies essentially. And that's why also most of our engineers are actually software engineers. The beauty is now you do have the software capabilities to like layer to layer sophisticated different value streams into the same system. I mean, the advantage of the batteries that it can serve as a backup generator, it can also do various grid services, it can boost the available power of the site. There's like so many things it can do. It's funny. I feel like in like Silicon Valley tech ecosystem, everyone's realizing like software is a little boring and you should go to like industrial stuff. But us in the industrial stuff, we're like, no, no, there isn't any software deployed yet, like we still have to do that. But it's hardware enabled software as well, right? You're not going to load a flash drive onto a camping battery and suddenly turn it into a mini power wall, right, nor will you do that for a Milwaukee drill. So, you know, big part of it is building the hardware from the ground up so that it can actually do that job, even if a lot of the core components, the battery cells, the, you know, battery management system are, you know, common enough if you squint at them. So I think that hardware enabled software pieces, the, yeah, where I would extend that too. Yeah, kind of like in the industrial site, you have these RK PLC systems that Duncan, you know, that familiar with, right, like how do you replace that with something that's smarter and more modern, like more of a polyglot able to talk to all these different generation and storage assets. I'm a great, yeah. I'm a mechanical engineer, but all I know is the PLC and stuff. Those are the boxes when I look at them. I'm like, why does that cost $100,000? Yeah. Okay. We have a minute left. I want to just go around the room and ask you all you guys a question. So if you imagine sort of the status quo approach to DERs, the, I'll call it highly permissioned approach, come up with what you think the percent of buildings in the US, homes and buildings that will have solar or battery via the highly permissioned approach, what you think that limit is, and then come up with what, what you think that limit gets to if we can more broadly adopt these more permissionless approaches. I'm putting you guys on the spot, so whoever wants to go first. But you know, I mean, what do we think it is kind of business as usual and what do we think this stuff gets us to? I'll just talk about residential, because that's probably more my expertise. So I mean, what we see now is that about 5% of homes have solar, there's probably another couple of percent that have home backup battery at this point, so that's kind of the highly permissioned approach. It's still ticking up a little bit, but that's, you know, after a couple of decades, it's kind of where we are. But what do you think we top out at, though, just like total kind of technical potential, whatever? So I think, I think when we get to permissionless, and we drop all the soft cost from the installation cost, and we kind of get to that DIY permissionless, I think we're going to hit 50% as a country. So I think that's just the headroom that we have, because when you look at the potential of your, of Germany and a lot of other places in Europe now, you're seeing a 50% IRR, essentially on these things, right? People are getting a two-year payback on their system. It is the best financial investment you can make, you know, as an individual at this point, is to buy a plug and solar unit, you know, in some of these countries. And so, what we get to when the economics become just that good, and then, you know, all the things that Cole was mentioning earlier about, you know, the proper, you know, testing codes, and, you know, how do we get insurers to insure it? How do we get banks to lend against it? When all of that stuff, no, the consumer doesn't want to see all that stuff. The consumer wants to eventually go to a Walmart, go to a Home Depot, go to Amazon.com and go buy one of these things and do a little IKEA project and plug it in and start saving money. If we get to that point, I think it's 50%. Yeah, the lending for this shouldn't be project finance, it should be, like, a firm. Yeah, that's right. All right, so you say it's, like, maybe the difference between 10% and 50%, something like that. I think so. Anybody else? Well, the number of homes that have a home battery, it's like half a percent, and 70% of those are in California. Yeah. Half where we're at today. And it's still only 1,800 homes, even within PG&E territory. Yeah, so that's where we're at today. I've always, always, always observed resilience in the backup power use case be one of the main motivating reasons to adopt one of these systems. So if we just want to be simple about it, 70% of utility customers in the states in the past few years have had a long outage long enough to spoil food and really be a nightmare for them, I would peg it there. But I would also ask over what time horizon, because I think we will eventually get to the point where it just makes sense to put these things in by default. And then you might not even know that that appliance that you're buying, you know, or care, actually, it's that you might not even care that that appliance that you're buying has a battery integrated that's kind of doing good for your home and for the grid. And I firmly, firmly believe that that's like the next generation of appliances and tech that we'll see in homes and average fridge replacement rate, average appliance replacement rate is what? Like, seven years, something like that. So if we can take a 10 to 15 year window, I would say we get north of 90%. Yeah, it's funny, like years ago, we had Kirin Bahraja, the CEO of Arcadia on our podcast. We asked him what his favorite der is. He said induction stove and we just made fun of them. We're like, that's not a der, man. What are you talking about? And like eight months later, impulse stove comes out. I feel like that is similar to kind of what you're talking about here where people might just buy this stuff. So for you, you're saying, I don't know what your floor was for pre-permissionless, but all the way up to like 70% over enough time as the things get cheap and easy enough. Yeah, I think we'll see a similar kind of growth trajectory as we did with Rezzy Solar and Batteries just got started, you know, like a decade later. You know, so that five to 10 to optimistically, maybe it's 20%, you know, something like 15% of homes have some backup system today, whether it's a generator or whatever, if again, you believe that that's going to be one of the main reasons people want to invest in this stuff. Cool. That's over. Follow. What do you think? CNI batteries. They're going to happen. Obviously, you believe in it too, right? And there's no reason why every industrial facility should not have. 100%. All right. Realistically, let's, yeah, I agree 70 to 80% is like very feasible. Like, you know, for all the reasons we talked about before in the previous battle, like, how are you going to, you know, get the flexibility in the grid? Industrial sites are an ideal location to put batteries for many reasons, but not traditionally the ideal customer to sell to you, so, but with increasing costs, increasing need for resilience and the time to power a question, I think this is the right time to push that out. Cool. Sorry, Stefan. All right. Your brother was up here earlier. So yeah, the fun. Close us out. What do you think? I believe if you take into account all of the technologies, whether it's plug-in solar or plug-in batteries or combinations of those technologies, then, yeah, you're very much able to reach 80%. I believe absolutely, yeah. But in the current environment, with current technologies, no. Not even close. I think traditional solar taps out very quickly. So I'm saying with batteries, Tesla walls, it's just, it's not enough market for that. There's too many hurdles that you have to overcome to get that. So, but with permissionless? Absolutely. Even if it's just a single battery in your home, you know, doing arbitrage. Yep. That'll help. I'm hearing this is all the difference between, yeah, you know, certainly less than 50 and in some cases way higher than 50%. That's the goal. I believe everybody acts this to this stuff. So awesome. Thanks, guys. Thank you.