This solution adds an encumbrance to the home, someone else who could file a lien against the new buyer or evade repairs when the system breaks down. This complicates ownership and transfers of ownership on both sides - for the homeowner and when the company sells these 'assets' and liabilities at a later point. Some of the early Solarci…
This solution adds an encumbrance to the home, someone else who could file a lien against the new buyer or evade repairs when the system breaks down. This complicates ownership and transfers of ownership on both sides - for the homeowner and when the company sells these 'assets' and liabilities at a later point. Some of the early Solarcity deployments come to mind, which in my mother's case involved a piece of hardware meant to update over the internet that was out of service through about 5 years of support callouts (Ops is going to an existential risk here).
The 20% reserve promise means the homeowner will have 20% capacity when the grid falls over (as arbitrage will be most advantageous right into the collapse), leaving quite a small reserve in the time of need. It'll be smaller if that 20% reserve is established by the service provider at initial install as their permissible 80% draw looks like... leaving the consumer to eat the year over year degradation in capacity.
The arbitrage on ERCOT is going to be extraordinary. There are <10 grid capacity failure events in a year with really crazy prices (last year they paid crypto miners $35M to curtail demand - so these are likely total supply exceeding events), but you can routinely hit a $5k/MWh price difference on either side of a node bottleneck (and even if the grid contains sufficient capacity that capacity won't neatly match the node-for-node distribution path in demand right now). This is why co-located solar and battery storage is less optimal than individually siting those assets - when co-located they'd sit behind the same limited capacity interconnect to node to node grid bottleneck (if one is blocked both are blocked, if one is discharging to fill the interconnect capacity the other is idle) - that system configuration is less robust to current failure modes.
They've got a well crafted solution story here taking advantage of many of the local absurdities of ERCOT. And surprising message discipline. I can see how they got funded and generated interest.
They've found a way to externalize the facilities costs and even get someone else to chip in some of the costs. $2k is extraordinarily low for a hookup like this, you'll pay $6k just for an electrician to pull the cable and configure the circuit these days in Seattle and then the development, battery, and ongoing management costs go over the top. That number is probably here to filter out applicants, not as a material piece of the business (50 discharge/charge cycles on the gen1 battery is a MW, and by arbitrage can net +$4k aka $80 per cycle - if you can play the arbitrage game twice a day and depreciate that asset over 15-30 years you don't need that up front outlay save for early cash flow or as a proof point for PMF - the asset's Lifetime Value is going to be in the $1-2M range).
They've also clearly never deployed to 100,000 PLCs over the wire before. There is manufacturing and then there is manufacturing; Tesla has done a lot of innovative manufacturing but they don't have much history. It is worse at SpaceX, small volume boutique manufacturing. I had a customer with a 125 yr. old machine in the factory; I've worked with manufacturers older than our country. Base Power is still early enough that they can wave that reality away, but every possibility of physical error during updates will occur and several of those conditions will lead to damage to the customer's panel, the battery, the grid, or all three while leaving the central office unable to query that remote for status, recovery, or even to intervene. Many manufacturing companies expect their leaders to do a turn in operations just to internalize the differences between IT and OT. This story is a bit of a classic 'breaking into jail' prologue, consumer retrofits are not going to go smoothly and while the financial alignment is great for the company the ground-reality is going to be a mess with every homeowner able to run their mower into the unit or leave it exposed to hail, etc.
For the consumer it is a bad deal (it may be the only option and better than nothing, but it is still not set up primarily to benefit the home-owner). Even a modest kickback, like $40/month, doesn't come near the yield from one's own participation in peak shifting and discharging back into the grid in periods of high demand (you can use that battery to minimize your own costs, or Base Power can maximize their own yield on those assets. I'd expect that split to go about 80:20 in favor of Bold Power given their reserve model. Texas grid pricing develops crazy short (physical) range deltas.
And to the question about being too popular and driving out one's own arbitrage... if they do 'win' and end up deployed in sufficient scale to ensure smooth functioning of the grid end to end they'll also have the power to induce that arbitrage on demand and hit whatever margin they feel comfortable with achieving. This is an exploitive utility design model - and why this young startup just raised $68M against a $300M valuation for the 2024 version of free UPC readers (Cuecat, circa 2000). Ok, that's too harsh. But the valuation isn't based on making the world a better place, it isn't a coincidence that this is the same market that gave us Enron 25 years ago and a new generation of regulators no longer remember (though apparently ChatGPT was trained on the Enron emails, so they could ask it).
They have a good answer for V2G, because V2G is a natural competitor, but the monetization here sits on the wrong part of the system.
I want this story to work because peak shifting and shaving at the panel is a tremendous opportunity to modernize our civic capacity to deliver base services to our entire population.
Go for it! Prove me, a random person on the internet, wrong! Share the story of a primary company success metric justifying a $30B exit in 4 years (given their $68M raise, VC funding, and $300M valuation pre-revenue? on a team of 11-15) aligned to providing power to people who need it. "People who need it" are notoriously unable to pay as much for it as the individual residential homeowners carrying many of the infrastructure costs supporting this latest go at the free market re-allocating money from rate payers to the venture capital investors without fixing or changing the structural problems in the ERCOT grid and market.
Availability of power shouldn't be left to the free market, we can't say internet access is a national priority and not electricity (especially as AC demand is going to climb everywhere). Exploiting a mistake (ERCOT's whole market design), that punishes your customer, is just a conflicted story top to bottom.
This solution adds an encumbrance to the home, someone else who could file a lien against the new buyer or evade repairs when the system breaks down. This complicates ownership and transfers of ownership on both sides - for the homeowner and when the company sells these 'assets' and liabilities at a later point. Some of the early Solarcity deployments come to mind, which in my mother's case involved a piece of hardware meant to update over the internet that was out of service through about 5 years of support callouts (Ops is going to an existential risk here).
The 20% reserve promise means the homeowner will have 20% capacity when the grid falls over (as arbitrage will be most advantageous right into the collapse), leaving quite a small reserve in the time of need. It'll be smaller if that 20% reserve is established by the service provider at initial install as their permissible 80% draw looks like... leaving the consumer to eat the year over year degradation in capacity.
The arbitrage on ERCOT is going to be extraordinary. There are <10 grid capacity failure events in a year with really crazy prices (last year they paid crypto miners $35M to curtail demand - so these are likely total supply exceeding events), but you can routinely hit a $5k/MWh price difference on either side of a node bottleneck (and even if the grid contains sufficient capacity that capacity won't neatly match the node-for-node distribution path in demand right now). This is why co-located solar and battery storage is less optimal than individually siting those assets - when co-located they'd sit behind the same limited capacity interconnect to node to node grid bottleneck (if one is blocked both are blocked, if one is discharging to fill the interconnect capacity the other is idle) - that system configuration is less robust to current failure modes.
They've got a well crafted solution story here taking advantage of many of the local absurdities of ERCOT. And surprising message discipline. I can see how they got funded and generated interest.
They've found a way to externalize the facilities costs and even get someone else to chip in some of the costs. $2k is extraordinarily low for a hookup like this, you'll pay $6k just for an electrician to pull the cable and configure the circuit these days in Seattle and then the development, battery, and ongoing management costs go over the top. That number is probably here to filter out applicants, not as a material piece of the business (50 discharge/charge cycles on the gen1 battery is a MW, and by arbitrage can net +$4k aka $80 per cycle - if you can play the arbitrage game twice a day and depreciate that asset over 15-30 years you don't need that up front outlay save for early cash flow or as a proof point for PMF - the asset's Lifetime Value is going to be in the $1-2M range).
They've also clearly never deployed to 100,000 PLCs over the wire before. There is manufacturing and then there is manufacturing; Tesla has done a lot of innovative manufacturing but they don't have much history. It is worse at SpaceX, small volume boutique manufacturing. I had a customer with a 125 yr. old machine in the factory; I've worked with manufacturers older than our country. Base Power is still early enough that they can wave that reality away, but every possibility of physical error during updates will occur and several of those conditions will lead to damage to the customer's panel, the battery, the grid, or all three while leaving the central office unable to query that remote for status, recovery, or even to intervene. Many manufacturing companies expect their leaders to do a turn in operations just to internalize the differences between IT and OT. This story is a bit of a classic 'breaking into jail' prologue, consumer retrofits are not going to go smoothly and while the financial alignment is great for the company the ground-reality is going to be a mess with every homeowner able to run their mower into the unit or leave it exposed to hail, etc.
For the consumer it is a bad deal (it may be the only option and better than nothing, but it is still not set up primarily to benefit the home-owner). Even a modest kickback, like $40/month, doesn't come near the yield from one's own participation in peak shifting and discharging back into the grid in periods of high demand (you can use that battery to minimize your own costs, or Base Power can maximize their own yield on those assets. I'd expect that split to go about 80:20 in favor of Bold Power given their reserve model. Texas grid pricing develops crazy short (physical) range deltas.
And to the question about being too popular and driving out one's own arbitrage... if they do 'win' and end up deployed in sufficient scale to ensure smooth functioning of the grid end to end they'll also have the power to induce that arbitrage on demand and hit whatever margin they feel comfortable with achieving. This is an exploitive utility design model - and why this young startup just raised $68M against a $300M valuation for the 2024 version of free UPC readers (Cuecat, circa 2000). Ok, that's too harsh. But the valuation isn't based on making the world a better place, it isn't a coincidence that this is the same market that gave us Enron 25 years ago and a new generation of regulators no longer remember (though apparently ChatGPT was trained on the Enron emails, so they could ask it).
They have a good answer for V2G, because V2G is a natural competitor, but the monetization here sits on the wrong part of the system.
I want this story to work because peak shifting and shaving at the panel is a tremendous opportunity to modernize our civic capacity to deliver base services to our entire population.
Go for it! Prove me, a random person on the internet, wrong! Share the story of a primary company success metric justifying a $30B exit in 4 years (given their $68M raise, VC funding, and $300M valuation pre-revenue? on a team of 11-15) aligned to providing power to people who need it. "People who need it" are notoriously unable to pay as much for it as the individual residential homeowners carrying many of the infrastructure costs supporting this latest go at the free market re-allocating money from rate payers to the venture capital investors without fixing or changing the structural problems in the ERCOT grid and market.
Availability of power shouldn't be left to the free market, we can't say internet access is a national priority and not electricity (especially as AC demand is going to climb everywhere). Exploiting a mistake (ERCOT's whole market design), that punishes your customer, is just a conflicted story top to bottom.