Do small residential batteries make sense?

Dr. Boom Boom.

All right, okay. Hello everyone, this is Volts for September 23rd, 2026. Do small residential batteries make sense? I'm your host, David Roberts. Here on Volts, we've done a lot of coverage of the burgeoning category of Plug-in DERs, or distributed energy resources. Sometimes called permissionless DERs, these are the clean energy technologies you can just plug in whenever you like with no permits and no interconnection agreements. Back in November 2025, we talked about balcony solar. In June, we looked at small batteries that a company drops into businesses for free and pays for out of electricity bill savings. Today it is small residential batteries for houses and apartments, not the big ones like the Tesla Powerwall, but wee batteries that you can sneak into a corner of your living room or kitchen. There are lots of players crowding into this space. Blip Energy, Watts, EcoFlow, Jackery, Anker, the list goes on. But the one that's gotten the most attention from the tech press is Pela Energy, which sells a 1.6 kilowatt-hour battery meant to back up your appliances. I'll confess that I'm a little skeptical about this niche, not because I don't love batteries. Y'all know I love batteries, but because they are converging from every side. Distribution-scale batteries. Full-size home batteries, EV batteries, batteries getting embedded in stoves and air conditioners. Is there room left in the middle? To hear the case, I am talking with Cole Ashman, founder and CEO of Pela. We're going to get into what these batteries are for, what they cost, what they can do for the grid, and who is actually buying them. All right then, with no further ado, Cole Ashman, welcome to Volts. Thank you so much for coming.

Thanks, David. It's great to be here and excited to dive in.

Yeah, so let's get right into it then. You worked at Powerwall, you worked on the Powerwall at Tesla, and you worked at Span. I think Volts listeners might remember an episode I did with Span years ago, the very high-end sort of replacement for your electricity panel. Both those products are quite beautiful, highly engineered, expensive, and they require an electrician to install. So I'm just curious, what did you learn from those? What inspired you to go off and make a product that's easier to install?

Yeah, well, you, you sort of nailed it there. You know, easier is the operative word. And Powerwall and Span, I mean, these are incredible products. Like you said, they're beautiful. They do a lot for your home in terms of backup power, quantifying and lowering the cost of your electricity bill. But I think if we score ourselves in this industry against the deployment numbers, you know, it's, it's not awesome. If you look back at the last decade, Factthere's still fewer than 1% of US homes that have any large whole home battery, whether that's Tesla, Enphase, Franklin. base. And maybe just to give a little bit more color on my background here, you know, the, the role that I played on the Powerwall team was equal parts new product development and deployment focused. So, and said another way, StoryI spent about half of my time in Palo Alto working with the smartest engineers in the world. And then the other half of my time, I was sweating in garages with electricians across the US and Australia and Europe. And You know, Tesla was uniquely trying to solve the deployment problem and the cost associated with deployment because we'd acquired SolarCity, right? We were equal parts installer and product company. So, you know, I've been focused on those challenges for a really long time. And, you know, OpinionI don't think anyone would disagree that backup power is becoming a necessity. And if you live on the coasts, especially power prices are going up, you know, and that need is growing. Batteries are a great solution for that. We just haven't really solved the deployment. We haven't solved the, how do we get this into homes quickly problem? And that's, that's what Pela is all about. We're bringing forward all of the, the learnings from this last generation of big centralized projects that, you know, started off as accessories to rooftop solar and have still kind of carried forward that deployment model of electrician installed, permitted, complex. works for a single family home, you know, maybe around $15,000 to $50,000 big upgrade. We're carrying all of the best parts of that, but then also trying to bring in some of what we've learned from other product categories collectively, you know, the home audio space, the internet connectivity story in buildings, which largely looks modular, self-installed, and way simpler. So that's it in a nutshell. We're making it simpler. We're trying to meet people where they're at. And not losing out on this amazing infrastructure-grade value that these batteries have for the grid.

So then just tell us then, what is Pela? Lay out the product. What is it exactly? What is it? How big is it? What does it do?

Awesome. So maybe before talking about the battery that we have, I'll say broadly, Pela is building the distributed control layer for power inside homes and buildings. And the physical product today is a plug-in battery. It's kind of battery plus compute node. It plugs into a normal wall outlet, 120 volts, you know, takes 30 seconds to set up. And then the appliance plugs into Pela, your fridge, your window AC, network equipment, big things like sump pumps, whatever you care about. And on its own, that battery nodes gives you automatic backup and energy management. When the grid goes down, it isolates that appliance. It keeps it. running, and when the grid is up, it can charge when electricity is cheap or from excess solar and discharge that stored energy into the load when power is expensive. But the most interesting thing happens when you add a second or a third one or more. These battery plus compute nodes, they discover each other over what we call the Peel Up mesh network, and they start behaving like one local energy system. So instead of a big single battery in the garage or equipment room, that's trying to understand the entire house from the meter level, we are distributing storage and sensing and compute room by room and appliance by appliance. So sometimes what I think of what we're building as is kind of a very high capability virtual power plant behind the meter, a local control, uh, local resilience layer that then presents the entire home and building upstream as, as a coordinated resource.

All right, we're going to get into a lot of those things, but I think one thing that A lot of people just ask, I think first is like, well, how long will my refrigerator run? Like if my refrigerator is plugged into the battery, people, you know, you can say 1.6 kilowatt hours, but I don't know that that means a ton to people like a refrigerator. If the power goes out, how long will a refrigerator run on one of these if it's fully charged?

FactFully charged, typically over 24 hours. And of course, like every fridge is a little different.

Yeah, of course.

The thing is we are really good at answering that question in the moment. Because we live, and it's like an Apple Watch for your refrigerator. We're learning all of its vitals over time. And we actually present that as a really clear, you know, number on our screen on the device in the outage. Like, hey, you've got exactly 27 hours. And, you know, you just ran your tea kettle as well in the kitchen. And now that's dropped to 23 hours. So, you know, broadly the design is about a day of backup for something like a fridge, but in the event, you know, you, you actually get a really, really clear answer to that question. Got it.

Got it. And you've been shipping these products since about mid-2026. Where are they mostly? Are you shipping nationally now? Are they available everywhere? What's the geography?

We are shipping nationally. They're available in all 50 states. And we've had just incredible feedback from customers. I mean, we've got a backlog currently that's way bigger than we can fulfill and we're working on getting those batches built and ramping up mass manufacturing. But the amazing thing is it's something that's drop shippable. So we manufacture it and we send it right to folks. And that's kind of the whole story, different from the weeks of back and forth with contractors and construction that you'd otherwise have to go through.

And just give people a sense of how physically big it is. Just, I don't know what the right comparison, bigger than a VCR. What's— yeah, it's, that's a terrible comp. Nobody has VCRs anymore. I don't know why that came to my mind, but like, how big is it?

Well, it is kind of funny because we see, we see people putting these in their media consoles, you know, so sort of like this empty space with the advent of smart TVs that the battery is kind of perfect for. It's, let's call it 1980s VCR or briefcase size.

Yeah. Okay. Got it. Got it. All right. So that's the product. I think people's first question about this, which I'm sure you have answered a trillion times, but must be dealt with is, let's just talk safety first. When people think, you want me to put a lithium-ion battery in my house? What about fires? What about lithium-ion fire? Especially in like, you know, a place like New York City, apartment in New York City, you know, New York City has had these lithium-ion battery fires from e-bikes all over the place. And there's, there's a lot of hype about it. They're very, their fire department's very sensitive to it. So people, I think, have ambiently absorbed this general fear about fire. So tell us about fire and safety and what is the sort of like certifications?

Yeah, safety is incredibly important. I'm glad we're spending time on it. We've spent countless engineering hours, you know, focusing on this question and yeah, those damn e-bikes, you know, I think, I think truly what, I mean, we, I think we have to call a spade a spade. Like not every battery pack is created equally.

Sure.

FactThe, the ones that tend to cause trouble are these low-cost, high-power density NMC, NCA chemistries that are designed to be lightweight and super energy dense. And, you know, let's be honest, often value engineered where they're pulling out, you know, potentially things that could help improve the safety margins. Not to mention these things are used, abused all around the city, uh, you know, in the e-bike kind of context. So You know, that is real, but our story in this has been safety focused from the beginning. And I'll, I'll give a few bullet points and you can, you and the viewers and the listeners can kind of judge for yourself, but the story starts with a different chemistry. So we use lithium iron phosphate, LFP, which is the same chemistry that goes into power tools and honestly, most home batteries now because it's, while a bit heavier, It is generally considered significantly safer. We also work with tier 1 cell suppliers that, you know, work with the best in the industry because they know what they're doing. On top of that, we wrap it in all kinds of real-time sensing and analytics with the battery management system that's watching out for every possible anomaly down to the individual cell level. And, you know, we back this up by doing the most intensive safety certifications that one can do around this type of product, including ones that are generally not done for the kind of camping batteries, which are also that, you know, same chemistry as the portable e-bike stuff. So we put our system through the paces and, you know, you basically have to do that. You have to try and push the thing into a thermal runaway and make sure that even in that scenario, it is safe. So we've done that. We've cleared those bars, wouldn't be shipping if we hadn't. And then, you know, I'll take it one step further and I'll leave it there. A lot of the concern with battery thermal events, as the industry will call them, is the propagation risk. You know, one, one thing happens to a cell and you have cascading failure.

Right.

For the built environment, our view on this is by distributing storage, you actually reduce the, the risk profile by not having one giant system in the basement equipment room. You know, that might even be below grade and flood risk to, you know, more spread out and reducing that sort of risk. But it's a very real thing. You spend a lot of engineering and hours and a lot of money solving this problem. And the goal is to get to something that's as absolutely safe as possible. We are very proud and we stand behind the system that we've built, but I never shy away from answering that question.

Yeah. Is there a UL Listing or certification? I have only the vaguest understanding of the various levels of UL certification, but—

There's UL, there is shipping certifications, there's a whole host of them. FactAnd by and large, we test to the same core set of UL standards that something like a Powerwall would. The end product standard is a little different because, you know, Powerwall is not a plug-in product, but the battery safety testing stuff looks Almost identical to what you'd see in those, you know, large kind of professionally installed systems.

And specifically in New York City, I know their fire department is very jumpy. Are you sort of classified as a consumer appliance or as an energy storage system officially in New York City for regulatory purposes?

The truth is it is a bit of a gray area. And we've been having conversations with FDNY and the building department and, you know, Really, we want to be a partner in answering these questions because let's be honest, the cat's out of the bag. People are putting these batteries out and around the city. In some cases, they're camping batteries. In some cases, they're cobbling things together. And I think that might be the bigger risk in all of this is that if people are not using UL-certified batteries designed for the job, what are they using? You know, and what's, what does the risk look like there? So to answer the question directly, FactWe do not list today as an energy storage system because that's not how that current generation of product standard is written. And this was true at Span and Tesla. We spent a lot of time in the world of UL and NEC code making processes to help rejudge standards and upgrade them as the products change. And that's always how it goes. You know, the product innovation tends to, to lead the standards that wrap around them.

But you're not worried at all that you're going to get classified as an energy storage system and thus come under a bunch of new restrictions or regulations, like as a business worry, you're not worried about that?

No. And because we've built the product to clear those bars already, sure, there might be some paperwork risk in doing that, but we know that the product clears the same safety margins that some of these other systems do. And actually we're better in some areas because A lot of the concern comes down to, in New York, comes down to knowing where these things are and understanding how they operate. You know, so we have cellular radio in every battery and we can reliably monitor and answer that question, which is a feather in our cap. And I think to the extent we've begun engaging, those sort of things go a long way to building comfort. Again, it's a bit of a gray area, but we are not worried about the business risk and we're excited to go push this forward.

Yes.

We think it's, cat is already out of the bag and somebody needs to be a good shepherd of bringing this into the world.

All right, let's talk price. Your pre-orders back in March 2025 were $1,000. Today it's $1,500. Why is the price going up and is it ever going to come down?

Yeah, I mean, we are an early-stage business, so we absolutely have to focus on making a product that, uh, we aren't losing money on as we sell. The really short answer, which is maybe interesting to some, maybe not, is supply chains. And, you know, hate to point fingers at the data centers, but—

Oh, go ahead. Everybody else does.

We've seen Apple raise their prices on their laptops. And I think the base MacBook went from $1,299 to $1,499. Chips have gotten expensive. Supply chain is COVID-level crazy right now, but we're optimistic. You know, the amazing thing about this product is the cost to produce and deliver and connect it to your home and the grid comes down very predictably because it's a mass manufacturing story. We aren't unwinding installer economics and permits and truck rolls and these things, which have proven really hard to compress cost on in the whole home batteries to the point where now most of the cost, like over 50% of the cost of a whole home battery system is, is not the hardware. So there's absolutely reason to be optimistic. FactWe have a pretty steep cost-down plan that is not going to compromise on any of the quality or safety, but just comes from building and shipping tons and tons of these.

Scale mostly.

Exactly.

Yeah. And I mean, presumably supply chains won't be as borked as they are forever, although it's kind of hard looking out to know when that's going to resolve itself.

Yeah, it's an ebb and a flow.

You have said that half the price of a bigger battery is the install. But as I'm sort of doing the math here on a per kilowatt hour basis, it looks to me like a Pela battery has roughly the same per kilowatt hour cost as an installed Powerwall. Like at $1,500 for 1.6 kilowatt hours, that's somewhere around $930, $940 a kilowatt hour. And if you do the math on a Powerwall 3, It's in that same zone. So it's not clear to me that the energy, the per unit energy cost is any lower.

It's not. I mean, you've hit on something that I think is pretty unintuitive at face value until you understand that landed cost of these whole home systems is incredibly driven by soft cost and by cutting out soft cost by design. You know, this wasn't something we accidentally stumbled into. This was the, the mission of the company is in order to scale these assets grid-wide, you know, if you believe the power grid of the future gets balanced at its edges, because that's where control is most actionable and data fidelity is highest, then the edge is kind of defined and won by whoever kills deployment friction, because that's how you build the largest coordinatable fleet and run the infrastructure backbone. And having seen this at Tesla and Span, we sort of knew that was the problem to go after. And you're right, it's actually a bit cheaper per kilowatt hour than the whole home system. And, you know, for what it's worth, we don't sell actively against Powerwall. It's an amazing product. And actually, again, unintuitively, something like 1 in 5 of our customers today already own a whole home battery and are layering Pela on top for more capacity and for appliance level monitoring. And so I think this notion that, you know, people are scratching their heads and deciding against a generator or a Powerwall or a camping battery or a Pela. is maybe not the exact right way to think about it. It's more like these things are coming down in cost, specialization's happening, and there's a lot of room for these products to overlap. And best cases, they work together really well. But I digress.

So who is buying them today? A lot of their marketing materials really focuses on renters, but is that who's really buying them? Because like, it seems to me just intuitively, like these are quite expensive and renters are, you know, less affluent than homeowners. It's like, do you have records, numbers about who your current customers are? Maybe not pre-orders, but actual like shipped units. Do you know who they are?

FactYeah, we, we know them well because we like talking to them and understanding why they, you know, are excited about this new product category. So how about we do some stats on this? It's, it's 60% homeowner, 40% renter. Which broadly aligns with just like what the housing stock looks like in this country. And, you know, which is to say like about half of homes are that renter condo persona that couldn't get a whole home battery today if they wanted. So that's really interesting because it's blank space. There's no great product for them today, but they aren't exclusively the segment we're going after. Geographically, I'd say about 50% of our customers are in California, Texas, and the Northeast, where broadly speaking, power prices are going up and outages are routinely getting worse. But we have customers in all 50 states today, including folks who don't have variable time of use rates, don't have solar, and are purely buying Pela because it's kind of the best backup product you can imagine for your essential appliances.

Are people ordering Multiples? I'm curious how many of the customers are ordering more than one.

More than half.

Interesting. Really? Yes.

Uh, which is really interesting. And I think it is a, it speaks to the capabilities of this coordinated system, this battery mesh that can coordinate together and do things like paint the picture of where energy is being used. It can coordinate with rooftop solar if you have it. And that's an interesting use case because 80% of households with solar on their roof don't have a battery today.

Yeah. Which is wild.

So the no contractor, no pain add-on is, it's a great use case.

And you say geographically, these are sort of concentrated in areas where blackouts are more of a problem. Yeah.

And I mean, it makes sense, right? Like, I don't, I don't know if I should be embarrassed to say this. I don't actually know what my monthly power bill is in most months. You know, do I know that my bill is going up here in San Francisco? Yes, I do. But backup power is the thing that gets most consumers over the line because a higher bill is frustrating, but a blackout's visceral.

Yeah.

Yeah. You know, when the fridge goes warm, the internet dies, the house gets hot, the sump pump stops running, you know, people already spend billions upon billions of dollars on generators and UPSs and these kinds of portable systems because they want that problem solved. But if you can build a system that solves that acute problem and then also works for you around the clock the rest of the year to manage prices on your bill.

Yeah, I want to come back to this subject in just a second and dig in a little bit more, but just a quick, maybe kind of random question. So a few months ago, we talked to the guys from David Energy who are doing this for businesses, but they own the batteries and the businesses just sort of pay out of the electricity bill savings. It's a similar thing to what Base is doing for big batteries, sort of like they, the homeowner just pays for installation and it just pays out of savings. So did you think at all about that model instead of just sort of full retail purchase, sort of like you own it and there's a no money down sort of thing where the homeowner just pays out of savings? Did you ever consider that model?

Yeah, short answer is, is yes, but I'll tell you why we started where we've started, which is not the end of the story here. No matter what, today in this world where batteries are somewhat of a considered purchase, the value needs to be incredibly clear and obvious to the end customer, whether it's sold through B2B channels or, or bought directly. And this was a lesson, you know, earned time and time again at Tesla and Spann. You know, you want to focus first on delivering the maximum amount of value to the household or the building. But the reason that we've spent the engineering effort that we have to put this product together in the way that we have, which is, I call it infrastructure grade, is it's distributed infrastructure at the end of the day, which means you can finance it like infrastructure. And while we started in this very, very fast kind of consumer market, which is, you know, uh, again, maybe a little non-intuitive, but it lets you go faster. To build that relationship with your customer. And again, I go back to this. The grid edge is kind of won by friction reduction and speed of deployment and building a larger coordinated network. We are broadly working alongside folks like David Energy to deploy this to customers of theirs. We're working alongside utilities as well who own and operate the batteries or discount them. And we are also absolutely keyed in on some of these other opportunities to go, you know, reduce that friction further by Taking the burden of cost away from the customer and still delivering them, you know, a backup experience that's better than anything else and bill savings. And that's the amazing thing. OpinionThe lifetime value is so high that these batteries are actually worth multiples of the cost it takes to build them. It's just putting together that set of partnerships and kind of financing models that allow you to basically give these away for free.

So there are other financing models. in the works or on the horizon. There's different ways of financing these for people.

Yeah, absolutely. And I think it actually extends beyond just the traditional energy incumbents, you know, who I would say are like the large solar folks and the VPP folks and the ESCOs and the utilities. They're all quite interested and we're working with folks in all of those buckets. But I think the next version of this starts to be a little bit less energy flavor, frankly, you know, the commercial real estate folks, the insurance providers.

Yeah, I was wondering about that, like builders or landlords or whether the real estate people might be interested.

And that's the trick, this same core atomic units that we've built, the battery, the edge compute, the sensing, the telemetry, the coordination, that same product, the same platform that runs it works across all of these channels. OpinionYou know, it is a, it's a platform and it's an infrastructure. layer for power control and ultra, ultra high fidelity data and sensing in buildings that goes in way faster than anything else from a retrofit standpoint that delivers a more granular view into the most essential pieces. And then that kind of feeds forward into better control around energy and power. So don't let the nice consumer branding fool you. You know, we, we see the need as being much larger. than shipping batteries in small boxes.

So currently it's a consumer play, but you're thinking about infrastructure plays. Basically, you're thinking of it in terms of infrastructure. So as you say, probably the main motivator right now for buyers is backup in the case of blackouts, but there's also these supposed bill savings, but I'm sort of just to clarify, like You need to be in an area where there is utility time of use rates to make that work for you at all, right? To make energy arbitrage work for you at all, to get any money out of it, you need those time of use rates. Like, for instance, like Con Edison customers, most of them are not on time of use rates. So just to be clear, like the bill savings portion of this only works with time of use rates. Is that correct?

That's a good first approximation, but there are other ways to save on the bill. I'll list a few, you know, one in our commercial style deployments, things like demand charge management. FactSo not just shifting energy, you know, from one 5-hour bucket to another, but solving that 15-minute or 1-hour peak can have really significant savings.

That's a commercial thing. Those are businesses that face those demand charges, right?

Businesses. And then weirdly, Arizona, you know, this is actually a residential demand charges.

Really?

Um, but it is rarer in residential. Otherwise you're talking time of use or you're talking solar arbitrage as well, which is like, it's actually no different from the whole home battery economic story. The maybe add-on there, or there's 2. One is the grid services, the VPP style programs where you can get paid by your utility.

We'll get to that in a minute. But like on the time of use thing, like FactIf you do the math, you know, say there's like a 20-cent spread between peak and off-peak, a unit this small, and you're drawing something like 10 watts just sitting there not doing anything. And if you subtract that from what you get from the peak to off-peak, you're talking like $50, $60 a year you're saving on time-of-use rates. Like, this is not a substantial amount of money.

I think it is right that framing these things as money printers is maybe a bit disingenuous, which is why we, we don't spend a ton of time on that in our kind of consumer pitch. It can be higher than what you cited. There are areas in the country where the spread is much higher than that. There's also the kind of load management piece. You know, this isn't purely a battery. It's also living alongside the, the load. So while you might not want to turn your refrigerator off during off hours, there are other things in your home for which we can.

Mm-hmm.

help you identify savings there. But it's absolutely your mileage will vary. And the honest answer is there's no nationwide payback number, but we are sort of equal to or better than, I would say, your, your standard whole home system if you're really doing the IRR kind of payback math, which is fine. But I think that's why things like backup power and, you know, peace of mind tend to lead.

Right.

With This, I don't know, sometimes it feels like post hoc rationalization around the savings story for end customers. But in the commercial use case, there's actually quite lucrative savings to be had on the load shaping side.

And then while the bill savings might not be as high for the residential customer, I think that's why it becomes increasingly important to work with these other partners that are trying to solve broader grid scale problems who are paying out So if I live in a place, and I do, which does not face blackouts particularly often, where blackouts are not a particular problem, and I do not have time of use rates, and my utility does not offer a VPP program, is there a remaining motivation if you subtract those out? And I have no idea sort of like what the percentage is of US citizens that live in such an area, but like, is there, is there any motivation left if you subtract those out?

FactIt's lower. You know, I think that's the honest answer. And by the numbers, and if folks are interested, we did a whole kind of mapping exercise and it's on our website where you can see where power prices have increased and outages have increased. It's like 1 in 3 counties in the US have had both higher prices and worse outages in the last 5 years. And it's increasing. So you might be in the rare lucky few there, but You know, backup power, bill savings, and understanding what's going on in your home and controlling it are kind of the reasons that you might want to purchase a product like this and pay upfront for it. So if your power is super cheap and your power is super reliable and you're not that interested in understanding, you know, is my fridge working like it should and is the temperature inside the right set point, then, you know, that's okay. It might not be the product for you. you today. But I think over time it actually does shift away from being this kind of considered purchase to just being default infrastructure. Yeah.

Yeah. I'll get to that later too. So let's start with the VPP stuff, virtual power point stuff. So a couple of things. One is these things plugging into a 120-volt standard outlet cannot export power to the grid. So when we talk about their participation In VPPs, we're just talking about demand response basically. Although I guess like the line between those is getting fuzzy now, but we're basically, we're talking about controllable demand basically, right?

Load shaping. That's right.

Yeah. Yeah. And I just like, from a utilities perspective, I can put a relatively cheap sensor or timer on an HVAC system. Or on a hot water heater and get relatively cheap control over a lot of kilowatt hours. And one of these little batteries from a utility perspective is just not a lot of kilowatt hours. So I'm just curious, like if I'm a utility building a VPP, why would I bother with these tiny little pieces when there are big chunks available to me. And you have a couple of pilots you've launched, so, you know. Yeah. Yeah.

Let's unpack it.

Yeah. So tell me, tell me like, what's the motivation of the utilities in those cases? Like, why not just go after the big chunks? Why go after these little chunks if you're building a VPP?

There's a few answers. Maybe the first one is I would challenge that it has to be one or the other, you know, these sort of like water heater controls or HVAC or batteries for your essential appliances. I mean, broadly we see utilities looking for any and all solutions that they can get in these constrained regions to open up capacity.

Sure. But they have priorities, you know, there are, there are priority lists.

Yeah. And it's not the water heater in most cases, because that also requires, you know, installers and kind of complex deployment mechanics. So the dropship type solutions, the smart thermostats have led for a long time, but let's look at like one example here and I can speak confidently about this because we're evaluating this opportunity with a few different utilities. In New Jersey and PJM, the cost to serve the customers is increasingly driven by the transmission cost, which is set by 5 coincident peaks throughout the year that are about 1 hour long. And on average, for each of those residential customers, they're trying to solve about a 2 kW load reduction. And that actually is pretty well tuned. And remember, most of our customers have more than one of these batteries. And often it is things like the fridge and the window AC, the kind of medium consuming loads. OpinionAnd the thing about a battery is it's both very predictable and it doesn't ask for the occupant to compromise. You know, the challenge with thermostat control is one, it's actually quite hard to time that load reduction. Because on either side of that target window, you actually increase the load to precool and then to, you know, make up for the fact that you've shut somebody's AC off on a 98-degree day. So batteries are predictable. Batteries can be, this style of battery can be drop shipped, broadly don't need, you know, PUC approval and all of these other kind of complexities that utilities don't necessarily want to go through all of those hoops. So increasingly it's becoming a power problem that looks more like shaping a few of these key hours. And, you know, utilities are broadly, the ones we're talking to, are broadly focused on just solving it via batteries after toiling in the kind of like IoT promised land that hasn't really materialized with all of these other things. Even EV chargers, I mean, they, in theory, you've got 7, 8 kW to play with, but there are studies done on this, you know, the actual kind of average load reduction from an EV charger is something like 400 watts. Once you discount, is the thing online, is the car plugged in? Is it charged at exactly that time that you want it? So, you know, I don't disagree with some of what you've said, but we're living in a slightly different view of it, uh, where, where we have utilities knocking down our door saying like, oh, you can drop ship a battery and we can get reliable, repeatable reduction in this kind of 2 kW range that, that makes a big dent in our transmission costs. That's interesting.

So the fact that it's not a huge amount of kilowatt hours, you think is made up for by the fact that Hey there, everybody. Don't worry, I'm not going to tell you about a new mattress or push a credit card on you. This isn't an ad. There are no ads on Volts. It is supported entirely by listeners like you. If you'll indulge me for a second, I'd like to ask for your support. I started Volts because we're all surrounded by depressing news about climate change and misinformation about clean energy, and it's never been more important To share the stories of the real people on the ground doing the real work of transition and all the ingenuity and courage and public spirit they are bringing to it. People are hungry to hear these stories, to learn from and find inspiration in them. I've heard from people who change majors or careers after hearing episodes of VOLTS, people using it in classrooms and community groups, even state legislators who have passed bills in Inspired by specific episodes. Sharing these stories matters. It makes a difference. If you have found value in it and want to help me continue doing it, I hope you will join the community of paid subscribers at volts.wtf. It's about the cost of a cup of coffee a month. If you don't like subscriptions, you can make a one-time contribution, leave a review on Apple or Spotify, or just tell a friend about Volts. I am grateful for any and all support. If you're already a paid subscriber, thank you. And now back to the show. So the fact that it's not a huge amount of kilowatt hours, you think is made up for by the fact that it's easy and reliable and no impact on the homeowner basically, or the renter.

Yeah. And I think like, again, increasingly it's becoming a power problem that looks more like 1 or 2 hours. And we've intentionally designed our system to be You know, big engine, small tank for that reason. Whereas when we built Powerwall, the goal was store a bunch of solar during the day and shift it 12 hours to the nighttime. So it was medium engine, big tank.

And talk briefly about these 2 pilots. Yep.

So we are working with a couple of different utilities going through pilot process now that we've been shipping for the last few months. One is Holy Cross Energy Co-op out in Colorado. Whose interests span the kind of resilience side as Colorado is unfortunately following California in increased fires and planned safety power shutoffs. So, you know, residential customers, but also businesses, you know, that, you know, traditionally are not the Powerwall customer who are suffering business interruption and things like this. So solving that acute problem, but also, hey, if you're bothering to deploy these great battery assets, Why don't we control them, you know, and opt them into the VPP, DR, load reduction style programs as well? And that's exactly what we're proving out there, both in residential single family and multifamily with them.

So in Holy Cross, is the utility helping to pay for them or are they just rounding them up and helping to control them?

FactIn this first phase, the utility's paying for them and deploying them. In the next phases, there's a few options that are on the table. And candidly don't have the exact sort of dollars that a customer will pay or not, but generally some sort of, you know, rebate, discount, opt-in type of thing. Because again, I think the best case here is we stop asking customers to pay thousands of dollars for these things that are so useful for these entities that are much more capable of financing infrastructure. Does that mean that every battery will be free? Probably not, but I do think we can bring down the cost even well below the cheapest kind of portable camping, glamping battery that you would buy to make it more of a no-brainer and, you know, drive that deployment flywheel.

So you think like in your envisioned future, a customer paying full retail price, just buying the thing off the shelf is probably going to be the rarer use case in that in most cases there's going to be some kind of subsidy or some kind of financing from Either a utility or some sort of real estate interest or some other entity?

It'll be a mix. You know, there are a lot of customers, our customers that tell us, you know, hey, we're actually not interested in a subscription model or something. I want to buy it. I want to own it. You know, and we respect that. We also don't charge subscription costs on the basic experience for that reason. Like, could you imagine buying a Nest thermostat and paying a dollar a month to change the temperature? You know, like that's just not, I don't think that's That's the world and the product space that we want to build. We want high trust and we'll allow those customers to buy it upfront. No problem. We actually love that. That's easy for us. But I think to convert this to mass market from, you know, like the 10% of homes that are buying pull start generators or that have backup generators today, it's kind of a backup niche solving that acute problem to convert it to mass market. I do think it needs to become a bit more like default infrastructure. Where absolutely, if we can lower the upfront cost for these end customers with the very fair trade-off of a couple hours a year, they can opt out of events and utilities and folks like that will pay for it. Then that does seem like a very compelling model to build.

And then your other pilot is with Brooklyn Solar Works. How does that work? What's the structure there?

Yeah, we are, we're working with a number of solar installers, Brooklyn Solar Works being particularly interesting because they serve New York City.

Mm-hmm.

And, you know, like you mentioned that earlier in the episode, New York has been a hard market for folks to adopt batteries, just given some of the, the building codes and standards. So with Brooklyn Solar Works and others, we are going back to solar-only customers that may have opted out of the whole home installed battery for structural reasons like, hey, I couldn't get it or it's too expensive and offering them Pela, which talks to their solar system and does all of that same value. So the solar pairing story, I think it just speaks to the fact that this is a lot more than a point system for backup power. Really is a tool for shifting load and shaping load in these homes.

When you say it pairs with rooftop solar, what does that mean exactly? Is it sensing somehow the production of the solar or is it just like, You know, adopting like a daylight schedule, a, a when in the sun is up schedule, or is there some actual communication between the solar and the battery?

There's communication. You know, I think for your technical listeners, you know, there's basically like 2 ways to do batteries and solar. There's AC coupled and DC coupled. Mm-hmm. DC is like the solar, which produces direct current, and the battery, which is direct current, kind of share the same DC bus. And then there's a, an inverter that they share. to go convert that to alternating current for the home. The other model, which is increasingly popular, and this is sort of what we built with Powerwall, is you've got just a solar inverter that's taking the solar on the roof, DC, converting it to AC, feeding it into the electrical panel. And then you've got the same thing for the battery, its own independent inverter, and it's drawing from and pushing to the electrical panel. We are essentially an AC-coupled battery, and we communicate with the solar system In a similar way that a Powerwall-style AC-coupled battery would to track that production in real time.

Okay. And the mesh thing, what's up with that? What does that mean? Yeah. You say you can mesh up to 64 of these, obviously like a homeowner or a renter, not going to buy 64 of these things. So like, what is, what is the practical upshot of that? Who's going to mesh all these together? Like, you know, if I buy 2, I can, Mesh them, but like, what does that, what does the mesh thing mean? And what is the advantage that comes with it?

What does it mean? Yeah, it's a good one. So no, homes, homes are not going to buy 64, but the commercial multi-tenant building, you know, can scale actually up to the hundreds of nodes or thousands. And then you start envisioning this as a distributed mega pack, you know, on the urban grid rather than, uh, rather than just a collection of batteries that are, you know, cobbled together via some crappy cloud connection. Um, but, but let's talk about the mesh, right? So I think maybe a good analogy is mesh Wi-Fi, because that's what people are familiar with. You know, the first version of networking in a building was wired Ethernet. You ran a cable where you wanted connectivity. Then you had a central Wi-Fi router in one location, but sort of the further away you got, the more walls you put in between, the worse the system worked. But mesh Wi-Fi changed the architecture. Instead of one big central access point, you deploy a set of relatively simple nodes around the building and you can add them incrementally and they communicate with one another. And together they behave like one network and the system improves as you, as you add coverage. The Pela analogy is pretty direct. We're not routing internet packets. We're routing information about power and coordinating that flexibility. So instead of one big central battery or one central control point trying to understand the whole building from the electrical panel, we put battery and compute nodes next to the loads themselves. And each node understands what's happening locally. They communicate with each other locally, and that's really important. You know, we're kind of like cloud is an accessory because this stuff needs to work all the time. And together they behave like one energy system. And it's underneath that analogy, the mesh really has 2 jobs. The first is staying connected. Most smart home devices put a $1 Wi-Fi radio in and make the connectivity the customer's problem for the next 10 years.

Mm-hmm.

That does not clear the bar for power infrastructure. So Pela nodes, they, they communicate directly with each other locally, securely. They have the on-device compute and control, and then they also all have cellular as a redundant path back out of the building. So job one, staying connected. Job 2 is coordination. If I have 3 batteries, I do not want 3 selfish boxes each optimizing for itself. I want one local system deciding Which node should charge when, when it should discharge, how much backup reserve to protect, which loads matter, and how do I respond to something like a grid signal without violating what the customer wants? And that's what we mean by this mesh operating system.

But that, when I think about that, I think about a landowner with multiple tenants and multiple units, like for a single homeowner, am I getting anything out of that mesh? Like, I don't, does my refrigerator really need to coordinate that much with my window AC unit? Like, Is this mainly for bigger deployments?

FactIt certainly unlocks bigger deployments. And for the end customer, it just makes it a dead simple product. You know, it doesn't require independent programming and setup and maintenance of each individual one with its own Wi-Fi radio. Like you plug in the next one a year later, it automatically connects, synchronizes, knows your, maybe not in your case, but the customer's time of use schedule. preferences, things like this. And it's guaranteed to stay connected, you know, for 10 years. Here's an interesting stat. When I was working on Powerwall, we did a ton of analysis around customer Wi-Fi. We had this problem where within 6 months, something like 20 to 40% of the Powerwall systems would disconnect from home Wi-Fi. Was it a technology challenge problem? No, it turns out that customers were changing their passwords and getting new routers. They gave their password to an electrician on a sticky note to help do the system setup and they changed it the next day. And this was costing Tesla a lot in, you know, maintenance and support and things like this. So, you know, the mesh is very cool. It is a bit more of an infrastructure story at the larger scale, but there are real benefits, you know, that just make the thing a delight to use in your home without having to kind of be an energy engineering type.

Right. And this just happens when you plug it in. You don't, as a homeowner, you don't have to do anything to this.

Yeah, totally. I mean, it's like, how, how amazing is it when you open up your MacBook and, you know, it's like, hey, do you want to share the password from this phone to the next? It's like that kind of seamless coordination between devices is what we're striving for. And it does have all of these great infrastructure grade benefits, but it also makes these disparate pieces Just really work well together.

So there are lots of products coming along, lots of different, I mean, like if people are, you know, subscribed to Kickstarter, there's all sorts of wacky battery products popping up now. People are really going for it on the little battery market. And there are lots of just sort of like a box battery, like a portable battery, theoretically that you could back up you know, stuff in your home with for cheaper than your product. Is it the telemetry and the mesh and the computing that is your sort of moat that is your advantage relative to all these other battery products?

You know, we're focused in this conversation very much on like the hardware and the technology, but really it's about what you do with that. You know, like a portable power station, fine. It's, it's designed for episodic backup and mobility and you charge it, you move it around, you take it camping. There are some that are, they're kind of retooling the camping battery to make it a bit slimmer, to put it on top of the fridge, you know, great.

Yeah.

FactThat'll do one thing for your home. But Velo was really designed from day one to be this 10-year always connected energy infrastructure. And let's do it this way, by way of an analogy, OpinionTesla Powerwall and Enphase batteries have something like 85% market share. And why is that when they're 2x the cost of the cheaper option? You know, I think that's worth unpacking because ultimately it's not just about the absolute cheapest battery box, just like it's not about always buying the absolute cheapest compact sedan or appliance when it's something that you count on. So I don't want to paint a picture that, you know, Pela is only exclusively this premium product, but we've been really selective about the components, the technology, the safety profile, the cells, and the capabilities that get smarter over time. in this product. And what we found is for many, if not most customers, that actually matters a lot. And we are talking about cheaper, but we're talking, you know, maybe $200, $300 here or there. And our cost structure, we've talked about a little earlier, also benefits from the fact that battery cells are getting cheaper. And, you know, broadly, these kinds of electronic components are coming down in cost.

So, well, I mean, they were. They were until, until tariffs and data centers came along.

Yeah.

Are you worried at all? I mean, when I look out to the future, I see like there are already some sort of high-end stoves that have batteries built in now. Carrier is talking about building batteries into their AC units. You know, as batteries get cheaper, as battery cells get cheaper, PredictionI could sort of envision batteries just kind of being built into everything, including like new homes that are built or new apartment buildings, new appliances. You know, do you worry that like a separate battery product is in the fullness of time going to get squeezed out by just sort of like all these other built-in batteries becoming ubiquitous and battery storage basically becoming sort of like Taken for granted and everywhere.

I share that conviction. That will be the future in 10 years. And I think if this is successful, the quote unquote battery becomes much less visible as a category. You know, storage will end up inside appliances and attached to HVAC and in cars and electrical equipment and scattered throughout the building because it gets cheap enough that you stop, you know, asking, do we want to buy a battery? But the hard question there is how do all those things behave as one system and can you count on them like grid infrastructure? You know, the brand vision of Pela is certainly not we want to go sell standalone batteries, but having built products in this space for a while, we, we tend to be pretty pragmatic and we think we have our finger on the pulse of, you know, what the, what the moment demands. And in this moment, we are at the, the Roku, the Fire Stick stage of smart TVs.

That's a good analogy. And, but like you theoretically could pivot, you could be a supplier to like a refrigerator manufacturer for built-in batteries or something like that. Like you could do other things than a standalone battery.

Absolutely. The core technology is kind of infinitely composable into these different shapes and sizes. And the hard part is, you know, the power electronics, the coordination. And the software layer that kind of wraps them keeps the whole building coordinated locally and can connect that coordinated building level asset upwards towards the grid while balancing occupant needs, appliance needs, and requests from grid operators. That's the hard problem. The hard problem is coordination. That's what we're most focused on. We decided to build the first version of that platform in this way because it allows us to go frankly faster than, uh, most other folks. You know, if we had put a battery in a fridge, we'd have probably a pretty expensive fridge that, you know, worked for some folks, but not for all.

The stove with the battery is a very high-end stove. Let's just say.

They're very nice too.

Yeah.

I'm big fans of what the Sams are building. And, uh, you know, I think we need more of this from all angles.

Speaking of speed, like, do you think, are you willing to sort of predict that these sort of smaller edge batteries are going to race ahead of full-scale home batteries? Like, do you think you're going to deploy a lot faster, get a lot more batteries into a lot more homes and apartments? Like, that's kind of the premise, right? I mean, that's sort of the premise of the whole thing.

PredictionThat's the bet. And it's not just faster, but further, you know, into more of the built environment, like the condos, the renters, the multifamily, the commercial spaces for which a big battery in your yard, you know, designed for your yard is probably not the right architecture. So I think we, we do believe that we're, that this is a way to go faster. And it is not only faster, but in many cases, like we discussed, it's a lower landed cost. And in taking this distributed approach, we have higher fidelity data, which feeds into better control. So I, it's not just about cheaper, smaller. It's actually about kind of recognizing that the most interesting parts of the distribution grid are where the loads connected to it exist. And by having that understanding, you can actually do a better job shaping things. Here's one example. If you are living alongside the HVAC system or the refrigerator, you know, and you've got a, you know, small 1.6 kilowatt hour battery, but you also have awareness of internal temperature in the home, uh, inside the fridge, you can play with power modulation to make that 1.6 kilowatt hours go further, you know, because what is a fridge if not a thermal battery? You can't do that unless you've got that really, you know, close relationship with the appliance and the load. So maybe a little bit of a forward-looking hint at some of the interesting controls that we're building.

Well, yeah, I want to talk about that in a second, but I wonder like utilities is sort of like one of the sort of sources of angst. Lately is that all this stuff is happening on the distribution edge and a lot of it's just sort of invisible to utilities. They sort of like don't know what's happening. This is, you know, the big problem with solar panels, but all this stuff, like, are utilities knocking at your door just for the information, just for the informational benefits, just for better knowledge of how their power is being used at the edge?

In some cases, yeah, absolutely. StoryWe are doing innovation partnership with PG&E out here in California, and we have some batteries installed in their San Ramon facility that is meant to be kind of an electrified home of the future with V2H and all these batteries. And, you know, that's a big part of the story. How do we get all of these things coordinating locally? And in PG&E's case, to give them credit, I think they're thinking about it less, you know, from a greedy standpoint saying we need all the data. They're actually very focused on a local-first control layer. But, you know, I think it is fair if customers are, you know, if it's transparent, customers opt in and utilities are paying some of the way here to share that data in a way that respects customers' privacy and does give these utilities a better map of the distribution grid, which in many cases, like utilities don't have very good visibility on the last mile of the grid.

Yeah. I mean, like just distribution planning is becoming such a huge thing. And so just the need for better maps, better information seems to me to be a huge piece of this. Well, to wrap up, let's look forward. What in the next, say, 5 years, how is the technology going to change? How is the business model going to change when you think about a plan? moving forward? What are the next pieces of the, of the plan?

Yeah.

And are there technology changes outside of your control that you are sort of anticipating or relying on that are going to open up new possibilities, you know, bidirectional outlets or, or regulatory changes like legalizing export, you know, all sorts of things. Like, I'm just curious how you see this, how you see this evolving over the next 5 years. Yeah.

Okay. I love the question. I could probably give 20 bullet points on this, but I'm going to restrain myself. Uh, and maybe I'll answer the ones that—

Let's do a top 10.

Yeah, that's another episode. Since you asked it, you know, the bidirectionality at the outlet, things are moving really fast there. You may be aware of this. Your listeners may be aware of this. You know, Pela is bidirectional capable, just like a modern EV. Most modern EVs are. We absolutely see that as where the puck is going and we've built for that future.

And is that mostly a regulatory thing or is there technology changes required to make that possible?

FactTechnology for sure. You know, not every inverter is capable of doing this kind of thing in this way. And it's a bet that we made on the technology and it is one, you know, one hardware design thing that separates us pretty distinctly from these camping batteries today. The outlet level bidirectionality thing to me is very reminiscent of early days of rooftop solar and Powerwall where it's like, what do you mean you can't, You can't connect something that just feeds into an electrical panel. This is a one-way system. And, you know, fast forward to where we are now, like the posts have moved, we've advanced this forward, and it's not ever done by some sweeping legislation. So despite there being, you know, I think 50 bills in 35 states for the balcony solar plug-in thing, you know, the way this actually moves forward is by addressing concerns through very important but very boring discussions in Mm-hmm. And NEC code-making panel discussions, which, you know, we, we like participating in that stuff because that's how you get this done. But things are moving forward there. We have new UL standards that are coming out. This is absolutely a topic of discussion. And there are some very real questions and topics being addressed on how you do this safely. But there's also precedent, you know, Europe, Germany, I'm sure people know balcony solar has been broadly deployed there in millions of homes now. So I think in, in 3 to 5 years, we will absolutely see here in this country, in the U.S., ability to feed back into an outlet in, in a controlled, safe way.

Interesting.

The, you know, other technology pieces, while we've said the word battery, I don't know how many times.

I say the word battery a lot on this, on this podcast.

As you should. It's a fun thing to talk about. You know, we, we are not in the battery chemistry game. We're working with whatever the best chemistry is that's safest and gets the job done. I do think sodium ion and some of these other chemistries are quite interesting, but for us, it's really the controls story. So we are most interested in pushing the forefront at integration and showing that a coordinated building level system across, you know, multi-tenant and commercial can be reliably counted on as infrastructure. And that's exciting because we're not waiting on some technology breakthrough. It's really a combination of product innovation, partnerships, some small advances in legislation and rulemaking. And we are just on the cusp of kind of proving that this kind of thing can work and can be a really valuable part of the distribution planning process. And if we do our jobs well, we're also helping, you know, the average American home through tough events like power outages and hopefully helping them understand and reduce their bill a bit more. And then we already said it, like, I think the future of this is a bit more boring. It's infrastructure that is coordinated behind the scenes and our homes and our businesses just take care of us a little bit better. They cost a little bit less to operate and we can, you know, go about doing the things that we like to do in our daily lives without hassle.

Yeah, it's interesting that when I ask you to look forward, mostly you are thinking from the infrastructure perspective and kind of the big picture perspective. Do you sort of think that like, In the fullness of time, you know, 'cause I was gonna ask like, well, how is the thing gonna change from the customer's perspective? But I almost wonder, like, do you think in the fullness of time, this is going to sort of disappear from the customer's view and not be a customer perspective at all? Do you know what I mean? Like, this is going to disappear into infrastructure and consumers aren't gonna have to think about it. or buy it or fuss with it at all? Is that sort of the endpoint, do you think?

Yeah, I do. OpinionI channel the Amory Lovins mentality a lot of people don't care about kilowatt hours and electrons. They care about hot showers and cold beer. The other reason I think that's an important end state is that just means it's like one less thing to worry about. Yes. And I think it's an honest approach to just how we improve quality of life. We, we don't need to beat people over the head with the climate stick and make them, you know, pay out of pocket to adopt expensive technologies. We just need to kind of collectively figure out how to deploy tech that we already have, make it easy, you know, and easy often means boring. And our place in this is we intend to be at that kind of infrastructure layer. Will we continue to have products with our brand on it and, you know, be front and center in some homes? Maybe, you know, I think we've built a strong brand so far and there are a lot of folks that do care about kilowatt hours and electrons, and that's great. But I think, you know, your question was, was 10, 20 years looking forward, and that's, that's how I see it.

OpinionYeah. Interesting. And I think this is a theme that comes up a lot, I think, in a lot of my recent discussions, which is just sort of the migration of clean energy from a customer product, a consumer product, To infrastructure, basically to thinking of just in general, thinking about it more like infrastructure.

FactYeah, absolutely. It does not have to be one or the other. I think there's a lot of great prosumer products that we can draw on, but delivering impact, I think we have to drive through the path of being an infrastructure player because otherwise, you know, it's, we've seen this with other quote unquote smart home technologies, like, I don't know, smart doorbells and things like that. You kind of tap out at 10 to 20% of early adopters pretty quickly. But hey, utility smart meters, that's 80% penetration, you know, and very, 2 very different products. But point being, we need to operate our grid way more effectively than we are now. OpinionBatteries are clearly the tool to do that. There's so much benefit that we can realize by putting these behind the meter in terms of resilience and bill savings and all the things that we talked about. So we see that as the piece to push on. And again, I feel like I've broken record, but at the end of the day, it's really just about making life easier for folks and, you know, not, not adding another thing to their plate.

All right. All right. Interesting. Well, this is fascinating. I love talking about batteries. StoryMy children mock me for talking about batteries so often. So this, the pod is my safe place where I can talk about batteries endlessly with people who also care. So thanks for, thanks for coming on, walking us through it. I appreciate it.

It was absolutely my pleasure. Thanks for having me on, and, uh, we'll talk soon.

All right, bye. Thanks everybody. You've been listening to Volts, founded and hosted by me, David Roberts, produced by Nate Peavey, and supported entirely through the generosity of listeners like you. If you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. See you next time.