Updated: Apr 14
Speaker 1 (00:04):
Welcome to another episode of The Solar Podcast. Today, Dave is talking with Scott Nguyen, CEO of Bodhi. Join us as Scott discusses his journey from Vietnamese refugee to Harvard trained PhD and how his new company Bodhi is helping solar companies deliver the digital experience that modern consumers expect. Let's get right into it on The Solar Podcast.
Dave Anderson (00:33):
Well, we're thrilled to have with us today, Scott Nguyen on the Solar Podcast. I'm Dave Anderson, the host, and I tell you, I've actually known Scott for a while being in solar as long as I have been. He brings a fantastic perspective, particularly on the residential side, but I think he's going to be able to offer perspective just generally on solar and where Solar's going, but has a fantastic background and upbringing starting as a refugee and then ending as a PhD. Well, ending, I guess more recently as an entrepreneur. And so I'd love, Scott, if you wouldn't mind just diving a little bit into your background and feel free to talk a little bit about your childhood as well. I think it's just a fantastic and fascinating story.
Scott Nguyen (01:09):
Yeah. Hey, thanks, Dave. Thanks for having me on the program. It's exciting to be here to chat with you. And man yeah, I guess you didn't know this, but I don't think many other people knew this as well. So I was born in Vietnam. Of course, my name, Scott, doesn't give that away, but I was born in Vietnam and so this was 1978. In 1980, there was a huge exodus of Vietnamese folks after the Vietnam War that were moving to different places. And so our family escaped from Vietnam by boat. So we were one of the boat people that you may have heard about. And my family escaped, wandered around in sea, got lost in South China Sea for a few days. And then finally actually got saved by a German oil tanker who picked us up and the boat was already taking in water.
And so it was pretty timely for us. And we went through the refugee, went to a refugee camp in Thailand for a few months and then to another one in the Philippines before we were able to be sponsored over by my dad's cousin who was already living in Austin at the time. So he came over to the US in 1975 with a lot of other Vietnamese refugees during the fall of Saigon. And from there, this is where I grew up. I grew up a Houstonian. And one of the first few things that when we came over, my parents actually back in Vietnam, my dad was a English teacher and writer and my mom was a elementary school teacher. But most immigrant stories, we came over to the US and just did whatever we could. And so they worked some blue collar jobs and raised a family of three. And so just with hard work we went through and I went off to college and in the end got a PhD in physics from Harvard.
Dave Anderson (03:21):
Which is incredible. So how old were you when you left Vietnam?
Scott Nguyen (03:25):
So I was two years old when I left Vietnam.
Dave Anderson (03:28):
Do you have any memories or recollections of the trip?
Scott Nguyen (03:31):
No, no recollections. But there's a story that my parents always tell that we were escaping under the cover at night and there was a story how since I was only two years old, my parents were trying to get everything ready and they actually left the house with my older brother and sister and forgot about me. And it was actually my grandmother who was staying behind who was like, "Hey, here's your youngest, you forgot about him." So that's a story that we tell because if not for my grandmother, I'd probably still be in Vietnam, I'd probably have a pig farm or something along those lines.
Dave Anderson (04:11):
Well, if ever there were a story that shows just the opportunity for someone to overcome circumstances, I think you're a fantastic example of that. It's a marvelous story from my perspective. So thanks for sharing that. And a lot of, I think, credit you probably would give to your parents and their willingness to do what it takes to support their family. And I can't imagine that it was really simple. I guess your father was probably somewhat advantaged when he arrived in that he was an English speaker when he got here, correct?
Scott Nguyen (04:44):
That's right. I think we had advantages, I think also just going through the refugee camps as well because of how well he did speak English. And so then me able to pick up jobs when we moved over and that helped him as well. So I think as growing up as a kid, I don't think I appreciated and understood the sacrifices that my parents made, but now I'm 44 years old now, got two kids of my own. It really does make a difference and understanding like what are these opportunities? Because one of the things I always talk about these days is that talent has no boundaries, but opportunities is where that's still pretty scarce. And so we are able to get here into the states and the land of opportunity is definitely true for us. And so I think that's an important aspect to always understand and appreciate.
Dave Anderson (05:43):
Yeah, absolutely. So I got to ask, have you ever been back to Vietnam?
Scott Nguyen (05:47):
Yeah, it's funny, I've only been back once, and that was back in 1996, so it was quite a while ago, and that was the first time I went back and that was an eye-opening experience. First time I got to see my grandmother, aunts and cousins that were living there. The place they lived at was a little bit on the outskirts, so there was very little electricity. So there's all sorts of stories that I have about having very little electricity, going out to get food every single day from the market because there was no refrigerator. And then what then happens when their monsoon season comes around and washes out all the rows so that the trip to the market is impossible. And then what do you do?
Dave Anderson (06:32):
Yeah, we've talked a lot on this podcast, how big of a difference to any society that electricity makes, and access to electricity is a really important thing. And I think we certainly center most of our conversations around what it means to electrify and to bring solar to the US marketplace. But there is a spillover effect. There are still just under a billion people in the world that don't have access to electricity. And the monsoon season in Vietnam, actually, I don't think they would actually even count in that statistic. So people that have limited access to electricity probably aren't even part of that statistic, but so.
Scott Nguyen (07:10):
No, that's true. Our house at the time, so back in '96, my relatives home had limited electricity, so just enough for lights and I think for the TV. But there was enough for refrigeration. Like I said, we were going out for food every day to the market. And was great there, it was like when we could do that, fresh food, fresh herbs, it was amazing food. But then when that monsoon season, that storm came, and I remember that day we couldn't go and we had nothing. There was really very little to eat and I was starving. And I remember what specifically was that my cousins who were about 10 or 12 at the time, they ran out into the field and basically caught a bunch of frogs, little tiny frogs, and that was what was fried up for our evening meal.
Dave Anderson (08:02):
Yeah, I grew up differently than that, to say the least. So anyway. So moving on a little bit further into your future from your childhood, obviously education is something that you probably would say defines you as well. You have an incredible educational background. So how was it that you landed in Harvard and what was it precisely that you studied while you were there?
Scott Nguyen (08:25):
I was a bit of a science geek, and so I went and studied physics and because what I wanted to do was try to uncover the mysteries of the universe. And going into grad school at Harvard, what I wanted to do was figure out what are all the underlying laws that govern how nature works, how atoms and molecules work? And so that's what I wanted to go into. And I did. So what I was doing at the time was really building up experiments to understand how atoms and molecules were interacting at really low temperatures right above absolute zero. And really my goal at the time, in my naive sense was if we could understand these interactions and actually start to control these interactions between Adams and molecules, maybe there would be completely different ways in which we can handle and control chemical reactions rather than just relying on pressures and temperatures.
And so I did that. And it was really interesting and it was great. But then as we continued along, there was a point in the time in my career in grad school, it was a six-year period by the way. Somewhere in the middle I started thinking, what else is out there? And this is when the various aspects of the social impact of... I remember very clearly I was reading a New York Times article about arsenic in water wells, and you think about it where in the US, we're trying to do all these advanced things, we've got this state-of-the-art technology, but there are still people in the world who can't have clean drinking water. And so that's what started changing how I started thinking about what I wanted to do. And so it was definitely from an environmental sustainability bant, which pre-precipitated from that arsenic story that I was telling you.
But then more broadly, at that time, this is around 2003, 2004, this is when climate change really started getting a lot more press and started to understand what was the situation with the climate crisis, but then how does clean energy really play a big role? And so as I was finishing up my degree, that's what I wanted to try to look into was what type of impact could I make in this whole clean energy revolution? And one of the interesting things was that I was academic, I was getting a PhD. And I remember talking to engineering professors and one engineering professor told me this, he said, "You can stay in academia, but if you really want to make a difference, you need to go out into industry because that's the place where they have enough money to make a real impact." So that's why I left the ivory towers and went into industry.
Dave Anderson (11:20):
So the natural transition for a guy that's starting to come around to this concept of climate and climate catastrophe and climate change is to go to work for big oil, right?
Scott Nguyen (11:30):
Yeah. That's right.
Dave Anderson (11:31):
How did that transition happen?
Scott Nguyen (11:33):
Yeah. I think what's interesting, this is like, and anyone that's listening, one's career is going to zigzag from one place to the other. And one thing that you realize is that you really don't know that much where you currently are. And after a few years you're going to know a lot more, but you still won't know enough. And so at that time, Shell Oil was one of the few companies that appreciated a PhD degree. And one of the opportunities that they gave me right off the bat was to explore various different types of technologies including renewable air technologies to be evaluated into their portfolio. Because like I said, in 2006 when I graduated, that was the heyday of Clean tech 1.0, right? So not only were the startups working on it, but all the big companies. Shell was putting billions of dollars into trying to see, to commercialize renewable technologies.
And so they put tons of money into buyer appeals, they had some solar work and they were doing a bunch of others. And so, one of the areas that I came in and looked at was some various alternative energies. And so I was able to scope out and learn tons of information, tons of on solar PV, concentrated solar power at the time, which both at that time was equivalent in price, if anyone can even fathom that. But yeah, I looked into quite a bit, did a lot of due diligence on nuclear power as well. So it was a great opportunity for someone that was young and didn't know that much about the industry to really pick it up. And because they appreciated PhDs, there was a lot of opportunity for me to learn.
Dave Anderson (13:18):
Yeah, I think another way of thinking about that would be companies, big companies even, their complacency can oftentimes lead to their extinction. And I don't think it's really well known that a lot of these oil companies, big oil companies are spending quite a lot of money and quite a lot of time and effort and resources toward trying to better understand other alternative energy sources. Obviously, oil is the primary focus for each of these businesses. And I would suggest and say that there is still a level of ignorance even in these companies in terms of how important in the impact that these renewable energy sources like solar and wind and other things, the magnitude of the impact. But to say that they're not looking into it or spending money on it or time on it, I think is also a little bit of an ignorant position to think about.
Scott Nguyen (14:03):
No, no, I agree. Because I think when you look at it from the amount of money they were spending was a small percentage of how much their capital spend was for sure. I think they're probably spending 40 billion on capital expenditures, but one billion of that was into renewable energy. And that's the thing where the percentage was small, but the absolute number was actually quite large. And I don't think people recognize that fact as well. But I think you're right. I think the other aspect of it is that from some of these, I don't think they necessarily understand the urgency of the problem. And so there's always this discussion about it needs to be a transition. Yes, there does need be a transition, but they also say, "Well, maybe it's not just renewable. It's all of the above." And I think that's where one gets this complacency where one doesn't get the sense of urgency that it is needed for us to be able to get out of that mess that we created.
Dave Anderson (15:06):
Yeah. And frankly, they have a obligation to their investor base to be able to return a responsible return. And most people invest in oil companies because of their position in oil. And to your point, it's more than just virtue signaling. I mean, there's material money coming into the industry from these water traditionally thought of as dirty energy or big oil. So it's material money that's coming into the industry that's actually helped to drive some of that change. And frankly, I'd love to see more of it. At some point though, you leave working for these big organizations and you make a transition into being more of an entrepreneurial role. So how did that happen or where did that come about?
Scott Nguyen (15:47):
The first one was just that first opportunity was just one of my old bosses at... I used to work for the chief scientist of Shell, and so he retired and essentially is like, "Hey, Scott, you want to come work for my new startup?" And I said, "Sure." And he said, "It's going to be in Israel." I was like, "Wait, hold on, let me talk to my wife." And at the time, it was funny, we had about a one-year-old kid at that time. Things were going fine, but we were living in Houston and she's like, "What? Live in Tel Aviv? Okay, let's go." So that was really the start. And that was where it was actually really interesting because the entrepreneurial world are much more dynamic, much more responsibilities.
So just as a young person who's ambitious, that actually checked a lot of the boxes about what I wanted to do to get more fulfillment. And so that started from there, that company over in Israel. Then back in the US, I came back in the US after about three years, joined another startup before really starting Bodhi in 2018.
Dave Anderson (17:06):
Gotcha. So I want our listeners to understand who is Bodhi, what do you guys do? What's the problem that you're trying to solve? Yeah. So if you wouldn't mind just going into that a little bit.
Scott Nguyen (17:18):
Oh yeah, sure. The best way to think about this is that solar companies, maybe not complete solar, but a lot of regional solar companies across the US, they're actually really good at selling solar, are really good at installing solar, but they need help with delivering that digital experience that their customers now expect. And I'm speaking on the residential side, and it's interesting because on the residential side, solar is a consumer product and these consumers, they're now very different than what they were five years ago. They're being conditioned by the likes of Amazon and Uber, where they have customers who expect that type of experience that's on demand at the top of their fingers.
There's a joke that we always say at our company, which is like, you can buy $30 worth of takeout like pizza and know exactly when it goes into the oven, exactly when it gets picked up for delivery and it's outside your door, but you buy $30,000 worth of solar, you have no idea what goes on. And so that's what Bode is here to help. It's a software platform that really enables these same solar companies to start to deliver that digital experience their customers now expect. And a lot of this is through automation and personalization such that not only are we delivering that digital experience for the customers, but ones also able to really help reduce the operational headaches and improve operational efficiencies at the companies tremendously. So our customers are telling us they can save about 50% reduction on customer support costs with the use of our platform.
Dave Anderson (19:01):
Yeah. So the real problem that you're trying to solve is trying to provide clarity to the homeowner on the intricacies process. From a homeowner's perspective said differently. There's some confusions like, "Hey, I can get a pizza in 30 minutes." But why does it take me? And I would imagine you have some stats on this, but from your platform, what's the average time from the sale or the transaction to when customers actually get their system installed and then ultimately when it's interconnected and it's functional?
Scott Nguyen (19:33):
So those two points that you just described are actually really important. So from contract to installation, that's actually not too bad. From our data, it's about three months. And some of this, there's some areas jurisdictions where it's faster, but there's always been delays.
Dave Anderson (19:53):
Not to cut you off at all, but we're comparing three months to Australia's two days.
Scott Nguyen (19:58):
Exactly. You're right.
Dave Anderson (20:00):
We as an industry have given ourselves a pass and we've said it's okay that it's not too bad at three months. But the truth is that we're getting creamed by most of the other markets where solar is well-established.
Scott Nguyen (20:13):
Exactly. So this thing that goes into the extra cost, the soft cost of solar. So we've got three months from on average to three months from contract to installation, which sounds great. And this is where an installer gets their first payment. The problem for a homeowner is that, wow, they've got the panels installed, they're expecting the system to be working, and then the solar company says, "Oh wait, hold on, I've tested the system, I know it works, but we can't turn it on until the inspection happens by the utility." Now that period from installation to powering on to PTO, that is now averaging, I think, six weeks to two months from what we're seeing. And that is a period where no one is happy. The installers aren't happy because they can't get their final payment. The homeowners are like, "I've got this system that's just sitting on my roof. I'm just got to wait for a utility who does not have great reputation in general, when are they going to come down around to it?"
So essentially these customers, the homeowners, they're going through this roller coaster of emotions from when they sign the contracts, they're really excited, but then they go like, "Hey, I got to fill out all these permitting applications." They go down low. But then they say, "Hey, we're about to install." So they're backup at high. And then right immediately they're like, "You can't use it." And they're back down. And so it's really managing that expectation, that customer journey that's really important for a solar company to be able to do so that they're just not stressing and taxing the operations team. Project managers should not be up Sunday nights e-mailing and texting their customers. These are things that if you set the right expectations and you just keep regular cadence, there's a way to help keep customers informed, but then let the operations team do what they should be doing, which is just executing on the projects.
Dave Anderson (22:28):
Interestingly, just some back of the envelope math as we talk about this. What's that mean to the homeowner? Well, what it means to the homeowner is first of all, it's just confusion, like why is this taking so long? Secondarily, it's frustration. And the tertiary thing as well, and maybe it's the first thing, is that inefficiency costs them significant amount of money. So that period of time between contract and install is probably on $150 average electricity bill a magnitude of around $450 of cost just in terms of waiting. And then that installed a PTO period of time, that period of time waiting for the utility company, which by the way, is losing a customer for all intents and purposes, and losing revenue for all intents and purposes.
So that period between install and PTO is probably in the magnitude of $225 to $300, again, assuming $150 bill. So we're talking about a $750 on average on your platform anyway, a $750 inefficiency in the marketplace for every single person that goes solar. So it artificially elevates the cost or artificially decreases the value of going solar for homeowners. And it's something, it's a huge problem. We talk a lot about it on the solar podcast, all of the bureaucratic steps, necessary steps. But I would imagine that your platform has provided some additional insight about opportunities for improvement. Do you help your customers understand where their areas of opportunity are relative to competitors?
Scott Nguyen (23:49):
Yeah, we do. So one of the key things that it's really important is to just get a gauge of the sentiment of the customers throughout this journey. One of the tools that we provide our customers are customer satisfaction surveys that they can embed along their journey. And this is really simple. And the question is simply, what's your experience so far? And the reason why this is so powerful is twofold. One is that it's great if the customer's happy. We always want them to get a four or a five. The real advantage of this is if the customer's not happy, for whatever reason, a company wants to know early on. The worst thing is for a company to find out at the very end of a project via a one-star Google review, that a customer is (beep) off.
If the company is able to uncover this early on, then they have the opportunity to fix it. And not only are you able to avoid that one star review, it's counterintuitively the customers that complain at the beginning that are unhappy. But if you're able to resolve it adequately, these are the ones that turn out to be the biggest champions down the road. So the folks that you're going to get referrals from are journeying these folks who, for whatever reason, maybe someone came in and accidentally left the gate opened and a dog ran out. Or if a site survey came and left a bag back. Maybe the person the homeowners annoyed for these minor things, well, maybe the dog leaving isn't minor, but these are things that can be addressed, and those are the opportunities that a solar company can use to be able to build a stronger rapport with that customer. And from that strong rapport, be able to really improve, translate that into longer term sales.
Dave Anderson (25:47):
I know you're a doctor but not a psychologist, but I'm going to ask you a question to help me understand better the customers psyche. So if you poll customers, now they might complain about the process of going solar from sale to PRO. But generally speaking, people that have solar are extremely exuberantly happy about the fact that they have solar. And it's really rare that you'll find a customer that went solar that regrets it. In fact, across the tens of thousands of customers that complete solar as assisted, and I would imagine the many customers on your platform, it's just so rare to ever hear a customer say, "Oh, I wish I hadn't have gone solar. I regret solar." They might complain about the process, but never about the end product.
Scott Nguyen (26:29):
No, I think you're right. So I think probably on in the 90% are those that are very happy with it. But we have polled asking specifically, how do you feel about your solar array? That is actually extremely high. We've also polled, how do you feel about your installation experience? That generally comes back four out of five, 80% of homeowners actually remember that negatively. But then here's the other kicker. After some time, and this is not of customers from Bodhi, but we actually did a lot of surveys of customers that were not using Bodhi before. We asked them for customers who went solar previously, we asked them who their solar company was. And many times they did not remember and. Okay, so here's a great anecdote. So I was talking to a homeowner who had two homes.
On the first home, she went with Tesla to install solar, had a horrible experience. So on the second home, she went with a local installer and actually had a really good experience. But when I asked her who that second company was, she couldn't remember. And so that gets back to this issue for solar installers who are like, they work so hard to get that customer, overcome this huge customer acquisition cost. But then they do a great job with the installation, commissioning and everything, and then they're done. They don't interact with the customers any more afterwards. And I think that's leaving a lot of money on the table.
Dave Anderson (28:14):
So two follow-up questions. The first one is around that 80% number. How much of that do you think is just because you have a vocal minority that's willing to talk about their negative experience and maybe some of the people that had a positive experience that aren't willing to perform the survey?
Scott Nguyen (28:27):
No. I surveyed quite a lot and over a couple of hundred homeowners, and this is where we had all of them were actually happy about their system.
Dave Anderson (28:40):
Okay. So you feel like you've controlled for that at least a little bit?
Scott Nguyen (28:43):
A little bit, yeah.
Dave Anderson (28:44):
And then the second question, which is the segue and perhaps the more important question is, so you talked about high customer acquisition costs, and we have established that people that have solar are generally very happy about it. But the referability, any given customer, meaning how often do they refer someone else? It seems like the pain of going solar weighs pretty heavily on them when they're deciding whether or not to refer and if they're going to refer their friends. And I would say that the industry, at least the referral rates for the industry remain really low for a product where the customer base is exuberantly happy, generally speaking.
Scott Nguyen (29:26):
Yeah. I think I agree with that. And I'm not sure exactly why. It is a big dollar approaches, and I think part of it is there definitely needs to be more. And I think a lot of studies have shown that if you've got a neighbor who's gone solar, you're probably, I forgot exactly the numbers, like five or 10 times more likely to go solar than if you didn't have a neighbor that goes solar. So that familiarity of someone that you know or someone in the neighbor that has solar is really, really important. But there's this combination of a few things that when we talk about referrals. One is they've got to be motivated. A lot of referrals are purely motivated in by that intrinsic. I know that there's referral incentive that every company provides. That's a little bit of cherry on top. But a customer needs to have a good experience first.
So the better the experience, the more likely they're going to provide referrals. The second thing that's really important is they need easy ways of doing this. And you ask customers how they actually get referrals right now like, "Well, I've got this form somewhere on my webpage, so if someone goes on, has a referral, they have to go on there, fill it out." A homeowner's not going to go through that process. And so what the industry needs is to provide tools that are really, really easy for a homeowner to provide referrals. And so that's some aspects of what Bodhi's trying to do as well.
But then the last thing, and this is really important, is it needs a triggering condition. And really the triggering condition is when that solar customer is talking to their friends or neighbors. So what needs to happen is when they're having that conversation and the friend's like, "Oh yeah, I see that you put solar. What's that? What's that? How much does it cost?" They need to be able to talk about it intelligently and they need to be right on the spot, be able to say, "Oh, look, let me send you my salesperson's contact information." And that's I think what will help facilitate the referrals more.
Dave Anderson (31:40):
So I got to ask you, what's the origin story of the name Bodhi? Where did that come from?
Scott Nguyen (31:46):
It was interesting. So our company name is legally 17 Terawatts. So we started the company in 2018, 17 Terawatts. And that's the total power consumption of all energy forums worldwide. And so we're like, "That's a cool name, my background and all that." But when we were designing the software, we needed a new name. We knew that we couldn't call it 17 Terawatts, no one would actually like that. And so we're coming up with brainstorm around names, and my co-founder came up with the term Buddha Vista, which is essentially a person who has teamed enlightenment. And that really hit home for us in terms of at least the symbolic meaning of it. How did the person become enlightened with their energy use through their journey on solar?
But we knew Buddha Vista wouldn't work, and that got eventually shortened down to Bodhi. So we went with it and we tested it with users and they're like, "This is a great name." And eventually when I was going around in the early days of selling Bodhis, implementing it at different installers companies, they're like, "Oh, hey, the Bodhi guy's coming." Yeah. And so we just went with it for the past four years.
Dave Anderson (33:11):
Yeah, that's great. Yeah, I actually didn't know that, that story. But yeah. So do you get any interesting pronunciations of the name or is it caught on?
Scott Nguyen (33:21):
We'll get Bodhi is... But then I would always go back. I grew up during the days of the original Point Break, it's like, Hey, do you remember Bodhi from Point Break, Patrick Swayze character? They're like, "Oh, yeah, I do."
Dave Anderson (33:38):
So you've gone a little bit full circle in terms of your academic career as well. So I know that you're doing some work for UT Austin. So what's your responsibility and roles there? What are you doing at UT Austin right now?
Scott Nguyen (33:50):
Yeah, so UT Austin, I'm a fellow at the Energy Institute, and it's really about just understanding various ways of... What they wanted to do was bring folks from industry and to be able to interact with the research initiatives that are there. And so it's really more of a liaison. So there's both a little bit of outreach that I do outside and interactions with news media and such on behalf of the institute. But then also to listen in to what some of the companies or some of the researchers and professors, what research they're doing and seeing what type of applicability that that might have into industry.
Dave Anderson (34:37):
So just forward-thinking, are there any interesting projects that you think are particularly exciting or that have some real legs for industry that could make an impact even in the short run or long run?
Scott Nguyen (34:46):
No. So I think there's a lot of talk about virtual power plants, for example. And it's still pretty nascent in the implementation, especially, there's a lot of work being done on how to actually take vehicles and not just using a vehicle like the Fort Lightning to power the home, but how can you actually have that two-way interaction of grid flow. And that both, there's a technical hurdle to that. And so some of the research at UT is around that area of what is the control between on the technology side. But one area which I don't think has gotten much attention is, what is that user experience from the homeowner? How they're interacting with this? Because you can always look at it from the technology perspective of like, "Hey, I've got this fleet of cars around." And somehow somebody's going to control it and we're going to have this great robust, reliable system. But then people forget to ask the question, does the homeowner, does the owner of the car, does the owner of the house, the PV system, the installer, they really want that type of interaction?
And some of them will say, yes. But some of them will say yes in particular more limited ways. And I think that area is a good area of research that hadn't yet been fully explored.
Dave Anderson (36:20):
I think that this is already put into practice in some examples. I think you're right in terms of it's not completely mainstream, but there are some utilities, particularly on the East Coast that are already doing charge control and using customer and homeowner battery storage to be able to help stabilize the grid. And NEM 3.0, which certainly got a lot of airtime on this podcast. And California is a step toward that. The technical hurdle there I guess is how do you control each of these disparate home and small power generation stations to be able to stabilize the grid? I would imagine that's probably the technical hurdle that you're referring to, or is it something more in depth than that? Yeah.
And then the other thing that we've talked a lot about with cars is that when we establish and think about residential communities that want to create and form their own micro grid situations, that might be actually eventually removed from the large macro grid that's controlled by the utilities, how is the interplay between the storage that exists both within cars as well as storage that exists in people's basements or garages with their solar?
How's that all going to work together? But the great news is there is it actually helps to solve some of the inefficiencies that exist. And one of those is, I was talking actually with my father-in-law and he was complaining about the number one question that people always ask, that don't like electric cars is, "Yeah, but how far can you go? What's the distance that you can travel?" And for most homeowners, they need 20 or 30 miles a day. So it's really the wrong question to ask. In fact, in some ways you'd say, well, cars have too much ranged. We're putting so many batteries in. If we put fewer batteries in that met the typical demand that homeowners, most people that drive cars needed for their smaller trips, you'd actually create potentially a more efficient car. But we have been conditioned as consumers, we want that 300 mile range. And I think there's a lot of reasons for it.
And so all of those days where you're not using that usage, is there a better use for that storage? And I think these are the sorts of things that get really exciting for the solar industry is, yeah, can we stabilize the grid by using these virtual power plants? And I think it's an exciting proposition. But that's not really the thing that's ultimately plaguing the solar industry right now. It's difficulty in terms of the high customer acquisition costs and the very bureaucratic process. So, Scott, you're a president for a day, what are the changes that you make to the solar industry to create a better system such that homeowners can have a more natural transition into moving into renewables?
Scott Nguyen (39:04):
Yeah. There's an effort right now, but I think it's got some major hurdles. So here's the thing. So one of the things that I would try to figure out a way to streamline the permitting process, but not in the way where this... So there's the solar app right now, which is trying to just digitize that process. However, if you go and look in the oil and gas, take a lesson out of oil and gas, there have definitely been states where an oil and gas company says, "Hey, I've got to drill all these wells. Rather than me permit every single one of them, maybe just give me the permit to drill any of them." And so it's more of a universal thing. And I think if we went, for example, that route, and so that's a very specific policy suggestion, then I think that could help quite a bit and take away a big chunk of that permitting cost and delays.
Dave Anderson (40:07):
So how does that practically work for the oil companies? They essentially identify multiple locations and they say, "Give me a permit. We're going to institute the same practices at any of these wells, so give me a blanket permit to work at any of these locations?"
Scott Nguyen (40:21):
Something along those. Yeah, across the state.
Dave Anderson (40:25):
Okay. And how would that work practically speaking then for homeowners? So we essentially say, "Look, I'm an installer in California. I'm a licensed installer in California, and homes are going to come in one of these four categories, 100 meter, 200 meter, 300 meter, 400 meter, whatever it is, 400 amp, excuse me. And we're going to use these setback requirements. We're going to use these best practices for wind load and for installation and for ceiling, and just give me a blanket permit to work anywhere in the state." That's the concept?
Scott Nguyen (41:01):
Yeah, that would be the concept.
Dave Anderson (41:03):
Yeah. It seems like a fantastic concept to me. In fact, we talked briefly about Australia, that there is no permitting process in Australia, but there is regulation on the practices. So it feels like when we say that there's no permitting process. It probably operates a lot more like this concept of saying, "Look, we're going to be a licensed contractor, we're going to file best practices here." I would imagine that for most cities that are looking for the revenue that comes from permits, you'd have to potentially figure out a way to make the payment. Yeah.
Scott Nguyen (41:41):
You still do. Yeah, I would still say that there's some fees for each site that the city will get. Right now there are armies of people creating, applying for permits on every single site. It's gotten to the point where there are armies of people doing permit and site plans and such in India to handle that, to lower the cost of that practice. And do we need that for every single site? So I think that's the question that the industry needs to answer. And then they need to try to see if they can learn some lessons from some of the other industries that have been able to streamline a lot of the operations, because a lot of the installations that in solar, they are cookie cutter. And so why can't we be able to have a more blanketed permit operation? So yeah, that's my one suggestion.
Dave Anderson (42:49):
The typical cost for permitting, the design and engineering piece of it. And it ranges obviously by jurisdiction, which is another problem. Some places will require an actual engineer to wet stamp, both a structural design as well as an electrical design. And then on top of that, you need to have the CAD design with your single line diagram and plan set. And in those jurisdictions, you're probably averaging probably $400 of cost plus the permit, plus the head count for the people that are running the permits and picking permits and things like that. And on the lowest end, even in the areas that you have over the counter permitting where there's not really a permit checker per se, you're just having to submit the plans and then an inspector ultimately decides whether or not you've built to the plans. And those examples, you're still probably a couple of hundred dollars of cost and added time to those projects. But it can be as much as in those extreme examples, it could be a thousand dollars cost and certainly a delay.
Scott Nguyen (43:49):
So it's the cost into it, but I think the delay is a big deal. I think for the solar installers, their business model, they're basically selling a product, starting to do work on it, but they don't actually get paid until the install happens. And so that time to install is such a critical parameter that if that can be shrunken by just a little bit, that does mean for a more profitable business, more sustainable industry.
Dave Anderson (44:17):
What are some of the things that get you excited about where the industry's going? Where do you feel like the industry's moving?
Scott Nguyen (44:25):
There are more and more products that are becoming available, energy products that are becoming available to the consumer. So we already have the batteries, we've got EV chargers, but there's the whole electrification that's occurring. And I think that is an area where the solar industry can take the lead. So this year, there's a lot of discussion about heat pumps. It's in the inflation reduction act. And so a lot of energy efficiency opportunities that are there. And so some solar installers are already selling and installing heat pumps as well in addition to the PV systems.
Others are looking to try to partner with other home service providers that can do the installs of these heat pumps or other type of energy efficiency services as well. And so I think with the inflation reduction act, with a lot of the rebates that are going into energy efficiency, I think that is where a solar installer can start to look beyond just the transaction of selling one single system to now thinking about their relationship, thinking about the lifetime customer value that they spent so much time and effort to actually acquire in the first place.
So I think that's exciting.
Dave Anderson (45:46):
So is Bodhi trying to solve or add to the process flow, these ancillary products or these additional products?
Scott Nguyen (45:54):
So that's what we want to do. And one of the things that we definitely try to say to our customers is that we want you to become more than just a solar installers. By developing these deep relationships with your customers, you can leverage the fact that there's this 25-year customer relation that just comes inherent in solar. So you start to go from just being a solar installer into turning into a home energy service provider. And I think that is where owners of these solar installation companies, they start to think about where they're going to be a few years from now and what type of business they're going to have. And so they're definitely thinking about O&M, but they're also thinking about other sales opportunities. And so I think this is the direction of at least some segment of the solar installer base.
Dave Anderson (46:44):
Yeah, absolutely. Well, Scott, it's been absolutely fantastic to visit with you today. I would love to do a follow-up at some point. I think the wealth of information that you bring, particularly on the residential side of solar, but just generally on energy, it's just fantastic for our listeners to hear. It's great to catch up with you as well. And thanks so much for coming on.
Just maybe as a parting thought, what are some of the things that you think that our listeners should hear about Bodhi that we haven't talked about today?
Scott Nguyen (47:18):
You can remove a lot of headaches through automation and through personalization, and so that's my parting thought to everybody. There's a big opportunity on the table for if anyone wants to be able to really embrace that concept and the opportunities that exist after that post-install part of the customer journey.
Dave Anderson (47:42):
Yeah. Solar at times has felt like it's stuck somewhere in between construction and service, and I think that smart people like you that are working on the problem to try to make it easier for people to provide a great service, but also understand the construction project in the real world here in the United States, and have to work in that framework. I appreciate people like you that are trying to make the industry smarter. And so fantastic always to visit with you and look forward to our follow-up conversation that we'll certainly have here on the podcast. Thanks so much for coming on, Scott.
Scott Nguyen (48:09):
Right. Thanks for having me, Dave.