October 23, 2025 • 30 mins
Justin Lopas is the COO and co-founder of Base Power, a battery and power company based in Texas.
Justin’s problem is this: How can you deliver more energy to more people without having to build so much more grid?
On today’s show, Justin explains why the grid needs a major upgrade, and how putting batteries next to homes could help. Also: what Texas’ embrace of renewable energy could mean for the future of power in the U.S.
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Episode Transcript
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Speaker 1 (00:15):
Pushkin. The demand for electricity is rising fast because of AI,
because of the shift toward electric vehicles and electric heat
and electric everything else. And it's relatively easy to install
new solar panels and in a pinch to build more
gas power plants. But plugging them in, hooking them up
(00:38):
to the grid, that part is hard. The grid has
to be big enough to reliably carry all the electric
power that people will want at the moment of peak demand,
you know, at five PM on a hot summer day,
when everybody gets home from work and turns up the
air conditioner and plugs in the EV and expanding the
grid to accommodate those higher and higher peaks that is
(01:01):
really expensive. On top of that, in a lot of places,
expense is not the only problem. Even if you want
to add more power to the you have to wait
in line until the company that builds the poles and
the wires can get to you. And so people have
started to think, what if we could figure out how
to get more energy to more people without having to
expand the grid so much. I'm Jacob Goldstein, and this
(01:30):
is What's Your Problem? The show where I talk to
people who are trying to make technological progress. My guest
today is Justin Lowpos. Justin is the co founder and
chief operating officer at Base Power. On one level, Base
Power does something really simple. They install big batteries at
people's homes in Texas, and the batteries provide backup power
(01:51):
during blackouts. But Bass's business is actually much more interesting
than that. In a lot of places, Base actually owns
the batteries that they install at people's houses, and the
company acts as the homeowner's electric provider. They send them
a bill every month, and this is the really interesting part.
Having those batteries installed on thousands of houses has huge
(02:14):
implications for the grid because the batteries can charge whenever.
In particular, they can charge when the grid is underused,
say in the middle of the day when solar panels
are cranking out power. Then at that moment when everybody
gets home and cranks up the AC the batteries can
discharge that power. That means less energy traveling over the
(02:36):
grid at moments of peak demand. So at the micro level,
Base is a battery company, but at the macro level
they're a utility. But instead of having a few giant
power plants, they have all those batteries, which are essentially
thousands of tiny power plants stash next to people's houses.
I asked Justin to explain how all this works from
(02:58):
the point of view of a customer.
Speaker 2 (03:01):
Let's say you have a house in Houston and your
single family homeowner. You first of all, you have to
choose who you buy a power from. You can't buy
it from the utiel in this case, Center Point Energy
is the Polls and myyers on our they don't sell power,
not on their menu, so you got to go to
someone else. We are one of the options with it.
You can buy your power and we offer a rate today.
(03:21):
That rate is on our website, and that rate is
quite competitive in comparison to the other power providers. And
like we like to say, there's no sexy electron, uh huh, sure,
Our electrons are the same as every other retailer's.
Speaker 1 (03:33):
Classic commodity doesn't get more commodified than electrons.
Speaker 2 (03:36):
That's right, Because it's a commodity. The fundamental value is
in the price and in its reliability. And that's what
we offer. Cheaper, more affordable, more reliable power. Because when
you sign up with Base Power, we charge you our
relatively comparably cheap rate, and we then put a battery
on your home that we own and operate. So typically,
(03:59):
if you're a homeowner and you want a battery, you
can chop around from online. There's a handful of manufacturers
of them. You're typically paying upwards of fifteen to twenty
thousand dollars for Actually, for battery of our size is
typically twenty five thirty thousand dollars.
Speaker 1 (04:11):
And why would I be buying that battery if I
was a homeowner.
Speaker 2 (04:15):
Without company like us. That's really your only option if
you want a battery in your home to provide you
back up power.
Speaker 1 (04:20):
So the battery, it's like instead of a generator the
way people used to buy a generator, now they might
buy a battery instead. That's right, But from you, I'm
not buying the battery, I'm what am I doing? I'm
just paying you to install it, but you own it.
Is that what's going on?
Speaker 2 (04:34):
Yeah, So we have compared to the costs of the
unit with a very small upfront fee. Today it's on
the order of five or six hundred dollars.
Speaker 1 (04:41):
So for five hundred bucks you install the battery. How
much cheaper is the power, by the way, than the
median power price.
Speaker 2 (04:47):
We typically save folks ten to twenty percent on their
power and that gap is widening over time as our
costs to serve customers and put batteries on homes go down.
And that's kind of the whole and we'll talk about
this more later, but the whole sort of vertical integration
concept for the company continues to drive prices down for homeowners.
Speaker 1 (05:03):
And then so that's basically it for me, and how
long can the battery power my house if the power goes.
Speaker 2 (05:09):
So it just like you know, how often you use
your cell phone throughout a day. It depends on it
depends on your usage. Typically what we say is on
the order of a day for an average Texas home longer.
If you curtail your usage, you reduce your usage in
some way.
Speaker 1 (05:22):
Great. Okay, so that's the basic model.
Speaker 2 (05:25):
How's it going quite well? Actually, So we're a little
over two years into the company now. So we're based
here in Austin in the headquarters where I'm at now,
and we have operations in San Antonio, Dallas, Houston, and
here in Austin where we do tens of batteries a day.
We've got several thousand on the grid. We're going quite quickly.
Our ability to install the batteries is far out surpassed
(05:50):
by our demand for batteries.
Speaker 1 (05:52):
It does seem labor intensive, right, having to go one
house at a time, seems like the hard, expensive part
of your approach.
Speaker 2 (06:00):
Yeah, I see, there's a lot of hard parts. But
bidding them into the wholesale markets and financing and all that.
Speaker 1 (06:05):
Yeah, fair, fair people always say that. When I say
that seems like the hard part. People like a hard
part of your approach.
Speaker 2 (06:10):
It is a hard part, that's very right. This concept
we call the deployment factory. So my backgrounds of manufacturing,
what I was doing prior to starting the company here
was in manufacturing and assembly, and one of the things
you learn is that manufacturing and construction are very different things.
Construction is a one off, project managed sort of like individualized, custom,
(06:32):
non repeatable process.
Speaker 1 (06:33):
You're using where it's that make things sound like it
take a long time and always go over a budget.
Speaker 2 (06:38):
Yeah, and are expensive, that's right.
Speaker 1 (06:39):
Yeah.
Speaker 2 (06:40):
With manufacturing, you know, there's literature we didn't make up,
like what good manufacturing process looks like. But you know,
Henry Ford pioneered this in the early nineteen hundreds with
division of labor and moving assembly line Toyota. You sort
of perfected it with the Toyota production system in the
seventies and eighties, and these concepts were applying to what
is traditionally construction project So if you get a battery
(07:01):
or generator or solar and sold in your home, you'll
typically have a project manager. They will custom design it
for the home, and they will sort of take a
very construction focused approach. We're taking a very manufacturing focused approach.
So we've developed software that auto generates our engineering drawings
that we need to submit to the cities for permitting
and to the utilities. We have a piece of software
(07:22):
also that commissions the system, meaning when you turn it
on and make sure it works, it automatically checks itself
to make sure that you installed it correctly. And very interestingly, also,
we are beginning to design and manufacture the hardware, like
the literal battery and power electronics themselves, that are very
easy to install in comparison to what's available on the market.
If you just went and bought a battery for the home.
Speaker 1 (07:44):
Uh huh, because you don't want some like high skill
sort of artisanal process where you need some guy who's
really good at installing batteries to do it. Right, that's
got to be that's right. That's the enemy of scale
at some level.
Speaker 2 (07:56):
That's right. So reducing the skill set and training required.
Speaker 1 (07:59):
Yeah, that's very Industrial revolution automation, right, de skilling.
Speaker 2 (08:04):
Yeah, the concept is not like, the fundamental concept is
not new. The application to this use case is new
and is unique for what we're building.
Speaker 1 (08:12):
Well, and even more generally, the application to putting it
house by house, right, Like, the whole point of the
factory is it's this incredibly sort of predictable, you know, homogeneous,
uniform environment that you can create for your optimization needs.
And a house is the opposite of that. It's just
some house, and like to some extent, every house is
different than every other house, right, Like that seems like
(08:34):
a thing that you are up against in trying to
quasi automate this process totally.
Speaker 2 (08:38):
You have the nail on the head and this is
one of the fundamental hard parts. And this is frankly
a lot of the reason why we're designing the hardware itself.
Speaker 1 (08:45):
Uh huh, the hardware meaning the battery pack.
Speaker 2 (08:50):
Yeah, So the reason we're designing it ourselves is because
we're trying to abstract a way as much of the
difference of the homes as possible. So take this really
really simple example. Many batteries in the market today are
mounted to a wall because they're a little bit you know,
people at least think they're a little bit more aesthetically pleasing,
and I don't know, it's just kind of the way
it's been done, so to speak. The problem with that
(09:11):
is that you have to know what the side of
the house is made out of. Yeah, if it's a
stud wall, you have to go find the studs. You
have to bring all of the different fasteners that you
might need for a brick versus stone, versus stuck oversus
siding house, and then you have to train all of
your crews on how to adapt to all of that.
And so the hardware that we've designed is ground mounted.
It looks like an air conditioning unit. It's not mounted
(09:33):
to the wall. Again, it's a somewhat simple change that
makes a big difference in the supply chain, availability, labor
training and availability, the skill sets required, and the time
to install. That's one example. There's like fifty other examples
of things that we've done with our hardware that is
different from what's on the market today. That makes this
(09:53):
home by home installation motion far more efficient and easier.
Speaker 1 (09:57):
Give me one other example. I like that example.
Speaker 2 (09:59):
Another is the way we have made the battery modular. Oftentimes,
batteries that you buy are like one big brick that
weighs several hundred pounds and it takes a few people
to like either lift on the wall or place and
move move around. We've modular azed our system so that
it's much lighter weight and you can quick connect it
into the others. So instead of having to run conduit
(10:22):
and wire, which means like fasten the condo to the wall,
the fish tape through, pull the wire through, terminate the ends,
make sure you've connected it right. It's a harness. It's
like literally like you know your laptop into its charger.
It's a quick connect mechanism. So now you don't need
to know how far to strip back the installation on
the wire. Yeah, make sure you don't nick one of
the copper strands.
Speaker 1 (10:41):
It's de skilling. It's if you can plug a thing in,
you can do this.
Speaker 2 (10:44):
Yeah, exactly. That's another thing that we've custom developed, a
custom connector that makes it easy to transfer both data
and power and high power together. This is not today
that's available on the market today.
Speaker 1 (10:55):
So what are your metrics like how many people it
takes and how long? Like you have some core metric
for installation? Is it people in time? Is it money
you have? Where are you at? Where were you what
are you at? Where are you trying to get to?
Speaker 2 (11:08):
Yeah, So at the very top level of the company,
we track two major metrics that sort of check us
on how good we are doing, so to speak. One
is the dollars per killo odd hour deployed kill awd
hour is like a unit of energy, and so how
many dollars does it take to plug one unit of
energy into the grid essentially.
Speaker 1 (11:27):
And that's including the materials and the labe's that's everything.
Speaker 2 (11:31):
It's everything, Okay, that's the bill of materials for us
to manufacture at the manufacturing costs that we do our
own last mile logistics, we deliver it to the home,
that cost the install costs, all that, okay. So that's
metric number one, and metric number two is how fast
are we going? How many killo odd hours or megawatt
hours are we deploying each month.
Speaker 1 (11:50):
So what is your cost per whatever killo odd hour,
whatever unit you want?
Speaker 2 (11:56):
So are the dollars per kill a OT hour? We
are comparable to grid scale today and our next gen
hardware will be far far lower than that. We're already
the fastest deploying battery developer here in Texas. We're fashion
than anyone else on a megawatt hours per unit time
per month basis.
Speaker 1 (12:14):
And so you're racing not against other people doing what
you're doing, but against people doing giant batteries and fields.
And you're saying you're doing more total battery storage deployed
per year.
Speaker 2 (12:27):
That's right, that's the case there. And then on cost,
we're comparable to that today. In our next generation hardware
will make us meaningfully more competitive.
Speaker 1 (12:33):
So the demand side is really clear. Right, you're a homeowner,
you get power, you get a backup. Tell me about you, like,
are you selling back to the grid, Like obviously you're
buying from the grid in some fashion. You're buying power
from somebody, right and then selling it to the consumer
because you're not generating it on net. Tell me about
(12:54):
your business as a seller of power.
Speaker 2 (12:56):
So in the deregulated parts of Texas. This gets a
little nuance.
Speaker 1 (13:01):
I didn't know there were regulated parts of Texas as
a naive New Yorker.
Speaker 2 (13:05):
Deregulation's a bit of a misnomer actually, So all that
really means in this con text is that you can
sell power. So actually here in Austin is a regulated area,
and if you live in the city of Austin, you
have to pay Austin Energy, which is the municipally owned utility.
But if you live in round Rock, which is like
one of the suburbs north of here, you have to
(13:26):
choose who you buy or power from. Were one of
those options. Okay, So in terms of selling electricity to homeowners,
that business is quite good. But again it's honestly because
of the battery because as a retailer the financial model,
if you don't have any batteries, you're just a regular
old rep retail electric provider. You are buying energy typically
at the wholesale price, and then you're selling it at
(13:48):
a retail price that is higher, and that difference is
the margin that you're making. Most of the time that
margin is pretty good, and then oftentimes, like in August
and hot like it is now in the evenings and
everyone comes home plugs and their ev turn on their oven,
et cetera. Prices go above what you're selling your energy
to your.
Speaker 1 (14:04):
The wholesale price is higher than the retail price at
certain moments.
Speaker 2 (14:07):
Yeah, and so the retailer is losing money in that moment.
Speaker 1 (14:10):
And that's when the business gets blown out, because like
sometimes those are crazy swings. Right, it's not like a
little bit above, it's like they are these wild whatever
tenex swings or something.
Speaker 2 (14:18):
Right, that's right. So here in Texas, just put some
numbers to it. Typically, prices are between kind of ten
and fifty, ten and eighty bucks a megawat hour.
Speaker 1 (14:27):
Okay.
Speaker 2 (14:28):
The highest price that the grid operator ORCOT allows in
the wholesale market is five thousand dollars.
Speaker 1 (14:33):
Wow.
Speaker 2 (14:34):
And this happens not super often, but it will go
certainly above one hundred bikes.
Speaker 1 (14:37):
So that's one hundred x more or less from fifty
to five thousand. It's one hundred x swing.
Speaker 2 (14:42):
Yeah. And so if you're just a regular old rep,
you're hurting pretty badly when prices are five thousand dollars
even for fifteen minutes or thirty minutes, forty five minutes
or even you know, one thousand or or five hundred bucks,
because we have the battery. When prices are that high,
we're able to basically turn off the home from the
grid and instead support that battery or support that homeowner
(15:03):
with the battery. And so now from a retail perspective,
we're not losing money simply during those periods of times.
Speaker 1 (15:11):
Right, because you don't have to pay the wholesale prices
when they go crazy.
Speaker 2 (15:13):
That's right. And we can actually spin the meter backwards,
so to speak. We can go sell that power.
Speaker 1 (15:19):
So can you sell at when it's five thousand dollars?
Can you be a seller?
Speaker 2 (15:23):
We can't. In fact, that is the market signal begging
the market to put more supply into the system.
Speaker 1 (15:30):
That is surge pricing. Yes, yeah, we'll be back in
just a minute.
Speaker 2 (15:47):
Interestingly, also, prices are not the same everywhere on the grid. Ah,
So it's not like all of Texas electricity in any
given moments is the same. There's different prices throughout the grid.
That is a function of the congestion on the lines,
and so in an area where there's a lot of congestion,
there's typically higher pricing. At the end of that congestion
to incentivize more supply local to that point to relieve
(16:10):
the congestion. And so our batteries are operating differently. Our
batteries in Houston are operating different than our batteries in Dallas,
different than our batteries in San Antonio, different than our
batteries in Austin.
Speaker 1 (16:20):
And presumably you built I mean, is that AI Is
it just an algorithm? I mean, presumably that is automated
to some high degree.
Speaker 2 (16:29):
Yeah, it's automated. Yeah, And this is a big part
of the software tech. And we also got a energy
markets software team that's developed algorithms and direct interface with Urcott.
In the case of Texas to go trade energy basically
through Arcot.
Speaker 1 (16:45):
So you mentioned Arcot and like as, I understand that
they're in a broadway sort of three grids in America, West, East,
and Texas, which is kind of awesomely Texas, right, it
seems very and my understanding is that Texas grid is
is less regulated. Right. Part of the reason is Texas
didn't want to be subject to federal regulation, so they
had their own grid. I know that's something of a simplification,
(17:07):
but it's it's basically right, Yeah, and so I'm curious, like,
is that why you're in Texas in part? And are
there regulatory barriers that would or will make it hard
for you to expand outside of Texas.
Speaker 2 (17:20):
So the first party question is why Texas eat the
nail on the head. Part of it is because of
the regulatory environment where you can become this concept of
a wrap retail actric provider. The other is this fundamentally
separated grid. To your point, it's not connected for the
most part to the Western Nation interconnection, and that drives volatility,
which means that batteries typically can can add a lot
(17:42):
of value, can make a good amount of revenue.
Speaker 1 (17:45):
It drives volatility just because there's a smaller area to
move power around, Like because if you have a big
grid and there's sort of more demand in one place,
you can pulse apply from one thousand miles away or something,
and you can't do that in Texas because it's not connected.
Speaker 2 (17:59):
Yeah, said simply you can borrow from your neighbors in
other areas, you can't. There's no neighbors to borrow from
in Texas.
Speaker 1 (18:04):
In Texas, interest, right, and volatility is good for your business, right.
That's it's a narbatrage business. At some level, you want
there to be the swings in price. That's your margin
to some extent.
Speaker 2 (18:15):
Right, that's right. In the deregulated markets where we're directly
interfacing with the whole sal markets, volatility generally drives returns
on the business. So outside of Texas, the way that
this works is that you get a partnership with the utility.
So it's the same operations and the same technology, but
a different business model. So in these cases, we go
(18:36):
acquire customer, say hey, customer, you want a battery, and
they're like, yep, we do. We go design, manufacture, and
deploy our own battery onto their home and then we
give the keys to that battery to the utility and
they control it and they pay us for that. And
the reason that they want that is because they need
capacity to offset their demand. They import energy from the
rest of the Texas grid into their service territory. They
(18:58):
pay costs for that, and they have other costs like
the cost of upgrading transformers that are at the end
of their life and other things that you can offset.
Speaker 1 (19:08):
Right, it's still the same problems.
Speaker 2 (19:10):
It's the same problem. Yeah, I say, in those cases though,
we're not directly interfacing with the wholesale markets. Now we
give them access to our software stack that allows them
to do that on their own behalf. But that's the model.
Speaker 1 (19:22):
So you're basically you're providing the battery on the software
in that setting.
Speaker 2 (19:26):
Yeah, it's the way we say it is. It's megawats
as a service. You as a utility are looking for
megawatts and you're bidding grid scale batteries natural gas peaker plants.
Here's another option that is faster to deploy or cost
effective and adds value in ways that centralized assets can't.
Speaker 1 (19:41):
So you're competing with like a natural gas power plant
in that setting, Like instead of adding a natural gas
peaker plant, they can just deplay on what's the order
of magnitude one thousand batteries and people's houses a thousand houses.
Speaker 2 (19:55):
Yeah, a little more than a thousand, but yeah, yeah,
like between a thousand and ten thousand compared to something
like that. That's right, depending on the size of the
natural gas plant. This is how we expand outside of Texas,
and we're actively pursuing opportunities frankly across the US outside
of text in the same business model.
Speaker 1 (20:10):
Again, how is that going so are you doing that
outside of Texas at this time?
Speaker 2 (20:15):
We do not today have live deployments outside of Texas.
We are working on a handful of deals that are
in the pipeline, so to speak. I'll say for a
few different opportunities outside of Texas. We have a few,
as I said, regulated utility deals inside of Texas, and
the goal is to be deploying batteries outside of Texas
next year.
Speaker 1 (20:32):
What's something that's hard that you haven't figured out yet? Like,
what do you try to figure out now? But that's
not working? We haven't.
Speaker 2 (20:40):
You know, we figured out some level of scale, but
you know, thirty or forty a day is very different
from hundreds a day, right, and hundreds a day outside
of Texas. So I'll say that like kind of this
deployment factory concept is good from the standpoint of well,
you know, if we've been a company for about a
little over two years now, but not nearly the maturity
where we need to be. We need to be much
much at a much larger scale. We need to have
(21:02):
hundreds of thousands of electricians in the field across fifty states.
Like this is a very different thing than what we're
doing today. The other thing that we're starting to do
now is manufacturing. So the battery itself, the major components
called eighty percent of it, we haven't manufactured ourselves today.
We've been using a contract manufacturer for that. And manufacturing
is no joke. This is like a hard thing to
get right, as you likely know, we're already starting to
(21:25):
do it now. We're building a factory across the street
here actually in Austin and building out a team of
what i'd like to think are some of the top
people in manufacturing, in battery design, in facility construction in
the world.
Speaker 1 (21:39):
So you're building a factory, I mean you're also charging
people five hundred dollars for installation, which I imagine is
less than the battery costs you installed. No, that's right,
and presumably because it pays you back over years, right,
many years. Yeah, So it's a super capital intensive business.
You have to spend lots and lots of money now
(22:01):
to get paid back over a long time in the future,
which is the way utilities work. Right. You build a
gas power plan and it's going to run for whatever
fifty So, like, how do you finance that?
Speaker 2 (22:13):
Yeah, it's a great question. So to date, we have
been blessed with large amount of support from the venture
capital markets. We recently raised a Series C and so
that will continue to accelerate our growth and give us
the capital to continue to build all the things that
we just talked about.
Speaker 1 (22:30):
How big is it? How much money did you raise?
Speaker 2 (22:33):
So it's a relatively large Series C. So we actually
are closing out over the next few days here on
a billion dollar Series C inequity funding.
Speaker 1 (22:40):
That's a lot of batteries.
Speaker 2 (22:41):
It's a lot of batteries.
Speaker 1 (22:42):
But I guess is it the factory. Is that money
going to build the factory, to build the batteries? Is
that what that is?
Speaker 2 (22:47):
Yep? It will allow us to grow the team, build
the factory, build the batteries, continue to live out the
mission of putting more and more distributed batteries on the grid.
We hope to have a battery on every home or
most homes over the lifetime of the company. And this
is not a short lived company that ends up selling
or whatever else.
Speaker 1 (23:03):
Like.
Speaker 2 (23:04):
The idea is to make a dent in the universe
and to really have a meaningful impact. We will know
that we have sort of achieved at least part of
our mission when we see the curve of cost of
delivered electricity to homeowners meaningfully go down, and we can
attribute some of the work that we've done to that.
That's why we're all here. That's the mission of the company.
That's why we've got all the people that have joined
(23:26):
us on this mission, and that's what we're here to do.
Speaker 1 (23:28):
When I think about what you're doing, I think about
electrification of the economy, whatever, of our power supply, and
you don't talk about it that way.
Speaker 2 (23:37):
Why you know, I think it's somewhat unfortunate that energy
gets politicized. It's like literally science and engineering, and it
shouldn't be, but it is. And I can tell you,
as a not native but now adopted Texan and spending
a lot of time with a lot of right leaning
politicians and individuals here in Texas, that batteries and solar
(24:00):
and renewable energy is not a like, it's not a
left or right thing. It's just an economic thing. It's
just a technological thing. And so we try to avoid
sort of any verbiage or sort of like insinuation of
politicization because it's just.
Speaker 1 (24:16):
Not It is notable that Texas is the leader in
solar and wind power, Like I think an underappreciated and
extremely interesting fact in the context of what you're describing.
Speaker 2 (24:28):
Right, Yeah, totally right. And I think a lot of
it is because there's free market principles, which yeah, sometimes
you can get you can have sort of right or
left coded or whatever, but like generally.
Speaker 1 (24:37):
Yes, well that is right coded, and it gives you
more renewable energy, which is left coded. Right, That is
why it is a delightful fact pattern.
Speaker 2 (24:45):
Yeah, yeah, And it's like there's free market principles that
allow for the cheapest marginal megawad of electricity to be generated.
Speaker 1 (24:51):
Which happens to be solar power in Texas, right.
Speaker 2 (24:54):
Yeah, but the company is not. We don't consider ourselves
a green technology company a climate company. Like happy to
be in that crowd too, But so anyways, we try
to avoid that. That's why.
Speaker 1 (25:08):
We'll be back in a minute with the lightning round. Okay,
we're gonna finish with the lightning round. What's one thing
that your dad taught you about being an engineer?
Speaker 2 (25:24):
Oh? Interesting, I think to never to never sort of
take the existing solution for granted. It's very easy to
sort of color your solution to a problem with what
has already been done, and sometimes the way in which
humanity has solved the problem is the best way, because
(25:45):
it's sort of like the wisdom of the crowd, you know.
But oftentimes, in particular in sort of old school industries
like energy, there's a lot of existing solutions that are
not the best, especially with new technology.
Speaker 1 (25:56):
Next question might have the same answer, but I'm gonna
ask it anyway. Okay, what's one thing Elon Musk taught
you about being an engineer?
Speaker 2 (26:03):
Well, that's definitely a piece of it. I actually think
that the thing that I learned from Elon the most
is how much you can get done in a relatively
short period of time if you work both hard and efficiently. Oftentimes,
what I've said sort of the first part of that
sentence is like, oh, you just spend more hours in
work all night, and like, yeah, that's a part of it,
but there's only somebody like you can only work twenty
(26:24):
four hours in a day, and realistically you can't even
do that, not for long, not for long. But the
importance of speed and the ability to reduce what he
would say is delete the part or delete the process
is extremely valuable to solving any problem, whether it's designing
(26:45):
a car like he and the team does at Tesla,
or a battery like we're doing here, or something operational
with how we're acquiring customers. Always ask yourself why that
thing or that process needs to exist, and frankly, like,
at least half of the time it doesn't. Just don't
do it, delete it, move on to the next thing,
and oftentimes it's okay. The ability to design a simple
(27:08):
part of process is much much harder than the design
of complex one. It's very counterintuitive, but simple engineering is
very hard to do.
Speaker 1 (27:14):
Right. Deleting the key thing is just get rid of
everything you can get rid of.
Speaker 2 (27:19):
Yeah, you may have seen online there's like this sort
of the Starship's engine, the Raptor engine went from like
very complex to very simple, and it's like it was
actually hard to get to the simple thing. Yeah, because
as an engineer and as a problem solver, you sort
of start with the complex thing by design, and you
have to continuously ask yourself why something needs to exist,
why that system or that part needs to exist, or.
Speaker 1 (27:40):
Is there a way we could make it work without
that thing?
Speaker 2 (27:43):
That's right.
Speaker 1 (27:44):
Yeah, what's one thing you learned about manufacturing from building
a car from a kit.
Speaker 2 (27:51):
Oh you've dug You've dug into my past. I like it.
Speaker 1 (27:53):
I mean it's a public we don't know any secrets here,
just on the internet.
Speaker 2 (27:58):
Yeah, I love it. So the kit card belt was
a lot of fun. Actually it was based on a
most of meat. And it's like this tube frame orange
thing I've seen when you were pre before this recording stocking.
Speaker 1 (28:08):
Me and we call it doing research. But no, I
like that.
Speaker 2 (28:12):
I know this is great, well researched. What I learn
about manufacturing, the ability to service basically like repair something
after it has been assembled is an additional hard portion
of the engineering problem. And you also need to determine
whether or not you even need to do that. So
when you're taking a part of MOUs and be ad
to put it together, like the ability to assemble and disassemble,
(28:33):
and it's like does the screw have access to come
out and need some like weird angled wrench, Like oftentimes
that's sort of an afterthought.
Speaker 1 (28:41):
Like that thing wasn't built to be taken apart by
a guy with the wrench.
Speaker 2 (28:44):
Yeah, right, And like actually sometimes that's okay. Sometimes it's
the one way door and it's like look, if it's broken,
just replace that whole module. Yeah, we take that approach
to some of our hardware. But actually building something that
is easy to service and take apart and reassemble and
modify is very hard to do it, and you sort
of need to consciously make that decision as you're designing it,
(29:04):
and it's not something that everyone does.
Speaker 1 (29:07):
What's one DIY project you regret taking on?
Speaker 2 (29:12):
So you used to living in southern California. We my
wife and I actually like flipped a house there and
we lived in it, well we while we flipped it.
That was the first mistake was doing the live in
and for at the same time piece. The second was
I am very bad at drywall, like extremely bad. I'm
not like I think I'm like okay at carpentry and
plumbing and you know, I think i'd say decent and
(29:34):
electrical at this point, really bad at drywall, very hard
to make it look right, the like finesse and artisanal
nature of like mud on drywall impossible to get right.
I look up to people that can do it. I
messed it up big time.
Speaker 1 (29:47):
How'd you do on the house?
Speaker 2 (29:48):
The house was okay, the drywall there's I've now learned
why people put texture on walls. It's like to hide
a lot of that kind of thing. Uh, and that's
what I ended up doing, So ended up being like okay,
sort of but.
Speaker 1 (30:01):
Some kind of like la groovy deco stuff. It's like, no, no,
it's lady's right, stop.
Speaker 2 (30:09):
Exactly.
Speaker 1 (30:17):
Justin Lopas is the co founder and COO of Base Power.
Please email us at problem at pushkin dot fm. We
are always looking for new guests for the show. Today's
show was produced by Trinamanino and Gabriel Hunter Chang, who
was edited by Alexander Garretson and engineered by Sarah Bruguerrett.
(30:37):
I'm Jacob Goldstein, and we'll be back next week with
another episode of What's Your Problem.
Pushkin. The demand for electricity is rising fast because of AI,
because of the shift toward electric vehicles and electric heat
and electric everything else. And it's relatively easy to install
new solar panels and in a pinch to build more
gas power plants. But plugging them in, hooking them up
(00:38):
to the grid, that part is hard. The grid has
to be big enough to reliably carry all the electric
power that people will want at the moment of peak demand,
you know, at five PM on a hot summer day,
when everybody gets home from work and turns up the
air conditioner and plugs in the EV and expanding the
grid to accommodate those higher and higher peaks that is
(01:01):
really expensive. On top of that, in a lot of places,
expense is not the only problem. Even if you want
to add more power to the you have to wait
in line until the company that builds the poles and
the wires can get to you. And so people have
started to think, what if we could figure out how
to get more energy to more people without having to
expand the grid so much. I'm Jacob Goldstein, and this
(01:30):
is What's Your Problem? The show where I talk to
people who are trying to make technological progress. My guest
today is Justin Lowpos. Justin is the co founder and
chief operating officer at Base Power. On one level, Base
Power does something really simple. They install big batteries at
people's homes in Texas, and the batteries provide backup power
(01:51):
during blackouts. But Bass's business is actually much more interesting
than that. In a lot of places, Base actually owns
the batteries that they install at people's houses, and the
company acts as the homeowner's electric provider. They send them
a bill every month, and this is the really interesting part.
Having those batteries installed on thousands of houses has huge
(02:14):
implications for the grid because the batteries can charge whenever.
In particular, they can charge when the grid is underused,
say in the middle of the day when solar panels
are cranking out power. Then at that moment when everybody
gets home and cranks up the AC the batteries can
discharge that power. That means less energy traveling over the
(02:36):
grid at moments of peak demand. So at the micro level,
Base is a battery company, but at the macro level
they're a utility. But instead of having a few giant
power plants, they have all those batteries, which are essentially
thousands of tiny power plants stash next to people's houses.
I asked Justin to explain how all this works from
(02:58):
the point of view of a customer.
Speaker 2 (03:01):
Let's say you have a house in Houston and your
single family homeowner. You first of all, you have to
choose who you buy a power from. You can't buy
it from the utiel in this case, Center Point Energy
is the Polls and myyers on our they don't sell power,
not on their menu, so you got to go to
someone else. We are one of the options with it.
You can buy your power and we offer a rate today.
(03:21):
That rate is on our website, and that rate is
quite competitive in comparison to the other power providers. And
like we like to say, there's no sexy electron, uh huh, sure,
Our electrons are the same as every other retailer's.
Speaker 1 (03:33):
Classic commodity doesn't get more commodified than electrons.
Speaker 2 (03:36):
That's right, Because it's a commodity. The fundamental value is
in the price and in its reliability. And that's what
we offer. Cheaper, more affordable, more reliable power. Because when
you sign up with Base Power, we charge you our
relatively comparably cheap rate, and we then put a battery
on your home that we own and operate. So typically,
(03:59):
if you're a homeowner and you want a battery, you
can chop around from online. There's a handful of manufacturers
of them. You're typically paying upwards of fifteen to twenty
thousand dollars for Actually, for battery of our size is
typically twenty five thirty thousand dollars.
Speaker 1 (04:11):
And why would I be buying that battery if I
was a homeowner.
Speaker 2 (04:15):
Without company like us. That's really your only option if
you want a battery in your home to provide you
back up power.
Speaker 1 (04:20):
So the battery, it's like instead of a generator the
way people used to buy a generator, now they might
buy a battery instead. That's right, But from you, I'm
not buying the battery, I'm what am I doing? I'm
just paying you to install it, but you own it.
Is that what's going on?
Speaker 2 (04:34):
Yeah, So we have compared to the costs of the
unit with a very small upfront fee. Today it's on
the order of five or six hundred dollars.
Speaker 1 (04:41):
So for five hundred bucks you install the battery. How
much cheaper is the power, by the way, than the
median power price.
Speaker 2 (04:47):
We typically save folks ten to twenty percent on their
power and that gap is widening over time as our
costs to serve customers and put batteries on homes go down.
And that's kind of the whole and we'll talk about
this more later, but the whole sort of vertical integration
concept for the company continues to drive prices down for homeowners.
Speaker 1 (05:03):
And then so that's basically it for me, and how
long can the battery power my house if the power goes.
Speaker 2 (05:09):
So it just like you know, how often you use
your cell phone throughout a day. It depends on it
depends on your usage. Typically what we say is on
the order of a day for an average Texas home longer.
If you curtail your usage, you reduce your usage in
some way.
Speaker 1 (05:22):
Great. Okay, so that's the basic model.
Speaker 2 (05:25):
How's it going quite well? Actually, So we're a little
over two years into the company now. So we're based
here in Austin in the headquarters where I'm at now,
and we have operations in San Antonio, Dallas, Houston, and
here in Austin where we do tens of batteries a day.
We've got several thousand on the grid. We're going quite quickly.
Our ability to install the batteries is far out surpassed
(05:50):
by our demand for batteries.
Speaker 1 (05:52):
It does seem labor intensive, right, having to go one
house at a time, seems like the hard, expensive part
of your approach.
Speaker 2 (06:00):
Yeah, I see, there's a lot of hard parts. But
bidding them into the wholesale markets and financing and all that.
Speaker 1 (06:05):
Yeah, fair, fair people always say that. When I say
that seems like the hard part. People like a hard
part of your approach.
Speaker 2 (06:10):
It is a hard part, that's very right. This concept
we call the deployment factory. So my backgrounds of manufacturing,
what I was doing prior to starting the company here
was in manufacturing and assembly, and one of the things
you learn is that manufacturing and construction are very different things.
Construction is a one off, project managed sort of like individualized, custom,
(06:32):
non repeatable process.
Speaker 1 (06:33):
You're using where it's that make things sound like it
take a long time and always go over a budget.
Speaker 2 (06:38):
Yeah, and are expensive, that's right.
Speaker 1 (06:39):
Yeah.
Speaker 2 (06:40):
With manufacturing, you know, there's literature we didn't make up,
like what good manufacturing process looks like. But you know,
Henry Ford pioneered this in the early nineteen hundreds with
division of labor and moving assembly line Toyota. You sort
of perfected it with the Toyota production system in the
seventies and eighties, and these concepts were applying to what
is traditionally construction project So if you get a battery
(07:01):
or generator or solar and sold in your home, you'll
typically have a project manager. They will custom design it
for the home, and they will sort of take a
very construction focused approach. We're taking a very manufacturing focused approach.
So we've developed software that auto generates our engineering drawings
that we need to submit to the cities for permitting
and to the utilities. We have a piece of software
(07:22):
also that commissions the system, meaning when you turn it
on and make sure it works, it automatically checks itself
to make sure that you installed it correctly. And very interestingly, also,
we are beginning to design and manufacture the hardware, like
the literal battery and power electronics themselves, that are very
easy to install in comparison to what's available on the market.
If you just went and bought a battery for the home.
Speaker 1 (07:44):
Uh huh, because you don't want some like high skill
sort of artisanal process where you need some guy who's
really good at installing batteries to do it. Right, that's
got to be that's right. That's the enemy of scale
at some level.
Speaker 2 (07:56):
That's right. So reducing the skill set and training required.
Speaker 1 (07:59):
Yeah, that's very Industrial revolution automation, right, de skilling.
Speaker 2 (08:04):
Yeah, the concept is not like, the fundamental concept is
not new. The application to this use case is new
and is unique for what we're building.
Speaker 1 (08:12):
Well, and even more generally, the application to putting it
house by house, right, Like, the whole point of the
factory is it's this incredibly sort of predictable, you know, homogeneous,
uniform environment that you can create for your optimization needs.
And a house is the opposite of that. It's just
some house, and like to some extent, every house is
different than every other house, right, Like that seems like
(08:34):
a thing that you are up against in trying to
quasi automate this process totally.
Speaker 2 (08:38):
You have the nail on the head and this is
one of the fundamental hard parts. And this is frankly
a lot of the reason why we're designing the hardware itself.
Speaker 1 (08:45):
Uh huh, the hardware meaning the battery pack.
Speaker 2 (08:50):
Yeah, So the reason we're designing it ourselves is because
we're trying to abstract a way as much of the
difference of the homes as possible. So take this really
really simple example. Many batteries in the market today are
mounted to a wall because they're a little bit you know,
people at least think they're a little bit more aesthetically pleasing,
and I don't know, it's just kind of the way
it's been done, so to speak. The problem with that
(09:11):
is that you have to know what the side of
the house is made out of. Yeah, if it's a
stud wall, you have to go find the studs. You
have to bring all of the different fasteners that you
might need for a brick versus stone, versus stuck oversus
siding house, and then you have to train all of
your crews on how to adapt to all of that.
And so the hardware that we've designed is ground mounted.
It looks like an air conditioning unit. It's not mounted
(09:33):
to the wall. Again, it's a somewhat simple change that
makes a big difference in the supply chain, availability, labor
training and availability, the skill sets required, and the time
to install. That's one example. There's like fifty other examples
of things that we've done with our hardware that is
different from what's on the market today. That makes this
(09:53):
home by home installation motion far more efficient and easier.
Speaker 1 (09:57):
Give me one other example. I like that example.
Speaker 2 (09:59):
Another is the way we have made the battery modular. Oftentimes,
batteries that you buy are like one big brick that
weighs several hundred pounds and it takes a few people
to like either lift on the wall or place and
move move around. We've modular azed our system so that
it's much lighter weight and you can quick connect it
into the others. So instead of having to run conduit
(10:22):
and wire, which means like fasten the condo to the wall,
the fish tape through, pull the wire through, terminate the ends,
make sure you've connected it right. It's a harness. It's
like literally like you know your laptop into its charger.
It's a quick connect mechanism. So now you don't need
to know how far to strip back the installation on
the wire. Yeah, make sure you don't nick one of
the copper strands.
Speaker 1 (10:41):
It's de skilling. It's if you can plug a thing in,
you can do this.
Speaker 2 (10:44):
Yeah, exactly. That's another thing that we've custom developed, a
custom connector that makes it easy to transfer both data
and power and high power together. This is not today
that's available on the market today.
Speaker 1 (10:55):
So what are your metrics like how many people it
takes and how long? Like you have some core metric
for installation? Is it people in time? Is it money
you have? Where are you at? Where were you what
are you at? Where are you trying to get to?
Speaker 2 (11:08):
Yeah, So at the very top level of the company,
we track two major metrics that sort of check us
on how good we are doing, so to speak. One
is the dollars per killo odd hour deployed kill awd
hour is like a unit of energy, and so how
many dollars does it take to plug one unit of
energy into the grid essentially.
Speaker 1 (11:27):
And that's including the materials and the labe's that's everything.
Speaker 2 (11:31):
It's everything, Okay, that's the bill of materials for us
to manufacture at the manufacturing costs that we do our
own last mile logistics, we deliver it to the home,
that cost the install costs, all that, okay. So that's
metric number one, and metric number two is how fast
are we going? How many killo odd hours or megawatt
hours are we deploying each month.
Speaker 1 (11:50):
So what is your cost per whatever killo odd hour,
whatever unit you want?
Speaker 2 (11:56):
So are the dollars per kill a OT hour? We
are comparable to grid scale today and our next gen
hardware will be far far lower than that. We're already
the fastest deploying battery developer here in Texas. We're fashion
than anyone else on a megawatt hours per unit time
per month basis.
Speaker 1 (12:14):
And so you're racing not against other people doing what
you're doing, but against people doing giant batteries and fields.
And you're saying you're doing more total battery storage deployed
per year.
Speaker 2 (12:27):
That's right, that's the case there. And then on cost,
we're comparable to that today. In our next generation hardware
will make us meaningfully more competitive.
Speaker 1 (12:33):
So the demand side is really clear. Right, you're a homeowner,
you get power, you get a backup. Tell me about you, like,
are you selling back to the grid, Like obviously you're
buying from the grid in some fashion. You're buying power
from somebody, right and then selling it to the consumer
because you're not generating it on net. Tell me about
(12:54):
your business as a seller of power.
Speaker 2 (12:56):
So in the deregulated parts of Texas. This gets a
little nuance.
Speaker 1 (13:01):
I didn't know there were regulated parts of Texas as
a naive New Yorker.
Speaker 2 (13:05):
Deregulation's a bit of a misnomer actually, So all that
really means in this con text is that you can
sell power. So actually here in Austin is a regulated area,
and if you live in the city of Austin, you
have to pay Austin Energy, which is the municipally owned utility.
But if you live in round Rock, which is like
one of the suburbs north of here, you have to
(13:26):
choose who you buy or power from. Were one of
those options. Okay, So in terms of selling electricity to homeowners,
that business is quite good. But again it's honestly because
of the battery because as a retailer the financial model,
if you don't have any batteries, you're just a regular
old rep retail electric provider. You are buying energy typically
at the wholesale price, and then you're selling it at
(13:48):
a retail price that is higher, and that difference is
the margin that you're making. Most of the time that
margin is pretty good, and then oftentimes, like in August
and hot like it is now in the evenings and
everyone comes home plugs and their ev turn on their oven,
et cetera. Prices go above what you're selling your energy
to your.
Speaker 1 (14:04):
The wholesale price is higher than the retail price at
certain moments.
Speaker 2 (14:07):
Yeah, and so the retailer is losing money in that moment.
Speaker 1 (14:10):
And that's when the business gets blown out, because like
sometimes those are crazy swings. Right, it's not like a
little bit above, it's like they are these wild whatever
tenex swings or something.
Speaker 2 (14:18):
Right, that's right. So here in Texas, just put some
numbers to it. Typically, prices are between kind of ten
and fifty, ten and eighty bucks a megawat hour.
Speaker 1 (14:27):
Okay.
Speaker 2 (14:28):
The highest price that the grid operator ORCOT allows in
the wholesale market is five thousand dollars.
Speaker 1 (14:33):
Wow.
Speaker 2 (14:34):
And this happens not super often, but it will go
certainly above one hundred bikes.
Speaker 1 (14:37):
So that's one hundred x more or less from fifty
to five thousand. It's one hundred x swing.
Speaker 2 (14:42):
Yeah. And so if you're just a regular old rep,
you're hurting pretty badly when prices are five thousand dollars
even for fifteen minutes or thirty minutes, forty five minutes
or even you know, one thousand or or five hundred bucks,
because we have the battery. When prices are that high,
we're able to basically turn off the home from the
grid and instead support that battery or support that homeowner
(15:03):
with the battery. And so now from a retail perspective,
we're not losing money simply during those periods of times.
Speaker 1 (15:11):
Right, because you don't have to pay the wholesale prices
when they go crazy.
Speaker 2 (15:13):
That's right. And we can actually spin the meter backwards,
so to speak. We can go sell that power.
Speaker 1 (15:19):
So can you sell at when it's five thousand dollars?
Can you be a seller?
Speaker 2 (15:23):
We can't. In fact, that is the market signal begging
the market to put more supply into the system.
Speaker 1 (15:30):
That is surge pricing. Yes, yeah, we'll be back in
just a minute.
Speaker 2 (15:47):
Interestingly, also, prices are not the same everywhere on the grid. Ah,
So it's not like all of Texas electricity in any
given moments is the same. There's different prices throughout the grid.
That is a function of the congestion on the lines,
and so in an area where there's a lot of congestion,
there's typically higher pricing. At the end of that congestion
to incentivize more supply local to that point to relieve
(16:10):
the congestion. And so our batteries are operating differently. Our
batteries in Houston are operating different than our batteries in Dallas,
different than our batteries in San Antonio, different than our
batteries in Austin.
Speaker 1 (16:20):
And presumably you built I mean, is that AI Is
it just an algorithm? I mean, presumably that is automated
to some high degree.
Speaker 2 (16:29):
Yeah, it's automated. Yeah, And this is a big part
of the software tech. And we also got a energy
markets software team that's developed algorithms and direct interface with Urcott.
In the case of Texas to go trade energy basically
through Arcot.
Speaker 1 (16:45):
So you mentioned Arcot and like as, I understand that
they're in a broadway sort of three grids in America, West, East,
and Texas, which is kind of awesomely Texas, right, it
seems very and my understanding is that Texas grid is
is less regulated. Right. Part of the reason is Texas
didn't want to be subject to federal regulation, so they
had their own grid. I know that's something of a simplification,
(17:07):
but it's it's basically right, Yeah, and so I'm curious, like,
is that why you're in Texas in part? And are
there regulatory barriers that would or will make it hard
for you to expand outside of Texas.
Speaker 2 (17:20):
So the first party question is why Texas eat the
nail on the head. Part of it is because of
the regulatory environment where you can become this concept of
a wrap retail actric provider. The other is this fundamentally
separated grid. To your point, it's not connected for the
most part to the Western Nation interconnection, and that drives volatility,
which means that batteries typically can can add a lot
(17:42):
of value, can make a good amount of revenue.
Speaker 1 (17:45):
It drives volatility just because there's a smaller area to
move power around, Like because if you have a big
grid and there's sort of more demand in one place,
you can pulse apply from one thousand miles away or something,
and you can't do that in Texas because it's not connected.
Speaker 2 (17:59):
Yeah, said simply you can borrow from your neighbors in
other areas, you can't. There's no neighbors to borrow from
in Texas.
Speaker 1 (18:04):
In Texas, interest, right, and volatility is good for your business, right.
That's it's a narbatrage business. At some level, you want
there to be the swings in price. That's your margin
to some extent.
Speaker 2 (18:15):
Right, that's right. In the deregulated markets where we're directly
interfacing with the whole sal markets, volatility generally drives returns
on the business. So outside of Texas, the way that
this works is that you get a partnership with the utility.
So it's the same operations and the same technology, but
a different business model. So in these cases, we go
(18:36):
acquire customer, say hey, customer, you want a battery, and
they're like, yep, we do. We go design, manufacture, and
deploy our own battery onto their home and then we
give the keys to that battery to the utility and
they control it and they pay us for that. And
the reason that they want that is because they need
capacity to offset their demand. They import energy from the
rest of the Texas grid into their service territory. They
(18:58):
pay costs for that, and they have other costs like
the cost of upgrading transformers that are at the end
of their life and other things that you can offset.
Speaker 1 (19:08):
Right, it's still the same problems.
Speaker 2 (19:10):
It's the same problem. Yeah, I say, in those cases though,
we're not directly interfacing with the wholesale markets. Now we
give them access to our software stack that allows them
to do that on their own behalf. But that's the model.
Speaker 1 (19:22):
So you're basically you're providing the battery on the software
in that setting.
Speaker 2 (19:26):
Yeah, it's the way we say it is. It's megawats
as a service. You as a utility are looking for
megawatts and you're bidding grid scale batteries natural gas peaker plants.
Here's another option that is faster to deploy or cost
effective and adds value in ways that centralized assets can't.
Speaker 1 (19:41):
So you're competing with like a natural gas power plant
in that setting, Like instead of adding a natural gas
peaker plant, they can just deplay on what's the order
of magnitude one thousand batteries and people's houses a thousand houses.
Speaker 2 (19:55):
Yeah, a little more than a thousand, but yeah, yeah,
like between a thousand and ten thousand compared to something
like that. That's right, depending on the size of the
natural gas plant. This is how we expand outside of Texas,
and we're actively pursuing opportunities frankly across the US outside
of text in the same business model.
Speaker 1 (20:10):
Again, how is that going so are you doing that
outside of Texas at this time?
Speaker 2 (20:15):
We do not today have live deployments outside of Texas.
We are working on a handful of deals that are
in the pipeline, so to speak. I'll say for a
few different opportunities outside of Texas. We have a few,
as I said, regulated utility deals inside of Texas, and
the goal is to be deploying batteries outside of Texas
next year.
Speaker 1 (20:32):
What's something that's hard that you haven't figured out yet? Like,
what do you try to figure out now? But that's
not working? We haven't.
Speaker 2 (20:40):
You know, we figured out some level of scale, but
you know, thirty or forty a day is very different
from hundreds a day, right, and hundreds a day outside
of Texas. So I'll say that like kind of this
deployment factory concept is good from the standpoint of well,
you know, if we've been a company for about a
little over two years now, but not nearly the maturity
where we need to be. We need to be much
much at a much larger scale. We need to have
(21:02):
hundreds of thousands of electricians in the field across fifty states.
Like this is a very different thing than what we're
doing today. The other thing that we're starting to do
now is manufacturing. So the battery itself, the major components
called eighty percent of it, we haven't manufactured ourselves today.
We've been using a contract manufacturer for that. And manufacturing
is no joke. This is like a hard thing to
get right, as you likely know, we're already starting to
(21:25):
do it now. We're building a factory across the street
here actually in Austin and building out a team of
what i'd like to think are some of the top
people in manufacturing, in battery design, in facility construction in
the world.
Speaker 1 (21:39):
So you're building a factory, I mean you're also charging
people five hundred dollars for installation, which I imagine is
less than the battery costs you installed. No, that's right,
and presumably because it pays you back over years, right,
many years. Yeah, So it's a super capital intensive business.
You have to spend lots and lots of money now
(22:01):
to get paid back over a long time in the future,
which is the way utilities work. Right. You build a
gas power plan and it's going to run for whatever
fifty So, like, how do you finance that?
Speaker 2 (22:13):
Yeah, it's a great question. So to date, we have
been blessed with large amount of support from the venture
capital markets. We recently raised a Series C and so
that will continue to accelerate our growth and give us
the capital to continue to build all the things that
we just talked about.
Speaker 1 (22:30):
How big is it? How much money did you raise?
Speaker 2 (22:33):
So it's a relatively large Series C. So we actually
are closing out over the next few days here on
a billion dollar Series C inequity funding.
Speaker 1 (22:40):
That's a lot of batteries.
Speaker 2 (22:41):
It's a lot of batteries.
Speaker 1 (22:42):
But I guess is it the factory. Is that money
going to build the factory, to build the batteries? Is
that what that is?
Speaker 2 (22:47):
Yep? It will allow us to grow the team, build
the factory, build the batteries, continue to live out the
mission of putting more and more distributed batteries on the grid.
We hope to have a battery on every home or
most homes over the lifetime of the company. And this
is not a short lived company that ends up selling
or whatever else.
Speaker 1 (23:03):
Like.
Speaker 2 (23:04):
The idea is to make a dent in the universe
and to really have a meaningful impact. We will know
that we have sort of achieved at least part of
our mission when we see the curve of cost of
delivered electricity to homeowners meaningfully go down, and we can
attribute some of the work that we've done to that.
That's why we're all here. That's the mission of the company.
That's why we've got all the people that have joined
(23:26):
us on this mission, and that's what we're here to do.
Speaker 1 (23:28):
When I think about what you're doing, I think about
electrification of the economy, whatever, of our power supply, and
you don't talk about it that way.
Speaker 2 (23:37):
Why you know, I think it's somewhat unfortunate that energy
gets politicized. It's like literally science and engineering, and it
shouldn't be, but it is. And I can tell you,
as a not native but now adopted Texan and spending
a lot of time with a lot of right leaning
politicians and individuals here in Texas, that batteries and solar
(24:00):
and renewable energy is not a like, it's not a
left or right thing. It's just an economic thing. It's
just a technological thing. And so we try to avoid
sort of any verbiage or sort of like insinuation of
politicization because it's just.
Speaker 1 (24:16):
Not It is notable that Texas is the leader in
solar and wind power, Like I think an underappreciated and
extremely interesting fact in the context of what you're describing.
Speaker 2 (24:28):
Right, Yeah, totally right. And I think a lot of
it is because there's free market principles, which yeah, sometimes
you can get you can have sort of right or
left coded or whatever, but like generally.
Speaker 1 (24:37):
Yes, well that is right coded, and it gives you
more renewable energy, which is left coded. Right, That is
why it is a delightful fact pattern.
Speaker 2 (24:45):
Yeah, yeah, And it's like there's free market principles that
allow for the cheapest marginal megawad of electricity to be generated.
Speaker 1 (24:51):
Which happens to be solar power in Texas, right.
Speaker 2 (24:54):
Yeah, but the company is not. We don't consider ourselves
a green technology company a climate company. Like happy to
be in that crowd too, But so anyways, we try
to avoid that. That's why.
Speaker 1 (25:08):
We'll be back in a minute with the lightning round. Okay,
we're gonna finish with the lightning round. What's one thing
that your dad taught you about being an engineer?
Speaker 2 (25:24):
Oh? Interesting, I think to never to never sort of
take the existing solution for granted. It's very easy to
sort of color your solution to a problem with what
has already been done, and sometimes the way in which
humanity has solved the problem is the best way, because
(25:45):
it's sort of like the wisdom of the crowd, you know.
But oftentimes, in particular in sort of old school industries
like energy, there's a lot of existing solutions that are
not the best, especially with new technology.
Speaker 1 (25:56):
Next question might have the same answer, but I'm gonna
ask it anyway. Okay, what's one thing Elon Musk taught
you about being an engineer?
Speaker 2 (26:03):
Well, that's definitely a piece of it. I actually think
that the thing that I learned from Elon the most
is how much you can get done in a relatively
short period of time if you work both hard and efficiently. Oftentimes,
what I've said sort of the first part of that
sentence is like, oh, you just spend more hours in
work all night, and like, yeah, that's a part of it,
but there's only somebody like you can only work twenty
(26:24):
four hours in a day, and realistically you can't even
do that, not for long, not for long. But the
importance of speed and the ability to reduce what he
would say is delete the part or delete the process
is extremely valuable to solving any problem, whether it's designing
(26:45):
a car like he and the team does at Tesla,
or a battery like we're doing here, or something operational
with how we're acquiring customers. Always ask yourself why that
thing or that process needs to exist, and frankly, like,
at least half of the time it doesn't. Just don't
do it, delete it, move on to the next thing,
and oftentimes it's okay. The ability to design a simple
(27:08):
part of process is much much harder than the design
of complex one. It's very counterintuitive, but simple engineering is
very hard to do.
Speaker 1 (27:14):
Right. Deleting the key thing is just get rid of
everything you can get rid of.
Speaker 2 (27:19):
Yeah, you may have seen online there's like this sort
of the Starship's engine, the Raptor engine went from like
very complex to very simple, and it's like it was
actually hard to get to the simple thing. Yeah, because
as an engineer and as a problem solver, you sort
of start with the complex thing by design, and you
have to continuously ask yourself why something needs to exist,
why that system or that part needs to exist, or.
Speaker 1 (27:40):
Is there a way we could make it work without
that thing?
Speaker 2 (27:43):
That's right.
Speaker 1 (27:44):
Yeah, what's one thing you learned about manufacturing from building
a car from a kit.
Speaker 2 (27:51):
Oh you've dug You've dug into my past. I like it.
Speaker 1 (27:53):
I mean it's a public we don't know any secrets here,
just on the internet.
Speaker 2 (27:58):
Yeah, I love it. So the kit card belt was
a lot of fun. Actually it was based on a
most of meat. And it's like this tube frame orange
thing I've seen when you were pre before this recording stocking.
Speaker 1 (28:08):
Me and we call it doing research. But no, I
like that.
Speaker 2 (28:12):
I know this is great, well researched. What I learn
about manufacturing, the ability to service basically like repair something
after it has been assembled is an additional hard portion
of the engineering problem. And you also need to determine
whether or not you even need to do that. So
when you're taking a part of MOUs and be ad
to put it together, like the ability to assemble and disassemble,
(28:33):
and it's like does the screw have access to come
out and need some like weird angled wrench, Like oftentimes
that's sort of an afterthought.
Speaker 1 (28:41):
Like that thing wasn't built to be taken apart by
a guy with the wrench.
Speaker 2 (28:44):
Yeah, right, And like actually sometimes that's okay. Sometimes it's
the one way door and it's like look, if it's broken,
just replace that whole module. Yeah, we take that approach
to some of our hardware. But actually building something that
is easy to service and take apart and reassemble and
modify is very hard to do it, and you sort
of need to consciously make that decision as you're designing it,
(29:04):
and it's not something that everyone does.
Speaker 1 (29:07):
What's one DIY project you regret taking on?
Speaker 2 (29:12):
So you used to living in southern California. We my
wife and I actually like flipped a house there and
we lived in it, well we while we flipped it.
That was the first mistake was doing the live in
and for at the same time piece. The second was
I am very bad at drywall, like extremely bad. I'm
not like I think I'm like okay at carpentry and
plumbing and you know, I think i'd say decent and
(29:34):
electrical at this point, really bad at drywall, very hard
to make it look right, the like finesse and artisanal
nature of like mud on drywall impossible to get right.
I look up to people that can do it. I
messed it up big time.
Speaker 1 (29:47):
How'd you do on the house?
Speaker 2 (29:48):
The house was okay, the drywall there's I've now learned
why people put texture on walls. It's like to hide
a lot of that kind of thing. Uh, and that's
what I ended up doing, So ended up being like okay,
sort of but.
Speaker 1 (30:01):
Some kind of like la groovy deco stuff. It's like, no, no,
it's lady's right, stop.
Speaker 2 (30:09):
Exactly.
Speaker 1 (30:17):
Justin Lopas is the co founder and COO of Base Power.
Please email us at problem at pushkin dot fm. We
are always looking for new guests for the show. Today's
show was produced by Trinamanino and Gabriel Hunter Chang, who
was edited by Alexander Garretson and engineered by Sarah Bruguerrett.
(30:37):
I'm Jacob Goldstein, and we'll be back next week with
another episode of What's Your Problem.
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