Episode 158: Arch Rao, Span
Today's guest is Arch Rao, Founder & CEO of Span.
Span is reinventing the home electrical panel. The existing home electrical panel has seen very little innovation over the last 75 years. Span is a smart digital electrical panel that makes it easier to integrate renewable energy and distributed energy resources into your home.
After a few years of pursuing a Ph.D., Arch decided to drop out and work on technologies that would have a non-linear impact on our efforts towards abating climate change. Arch has spent over a decade working in clean energy. He was an energy consultant at LCG Consulting and technical advisor for The Westly Group. Arch also co-founded Verdigris Technologies and was a Founding Engineer and Director at Joby Energy. Arch served as the Head of Products, Application & Sales Engineering at Tesla, where he focused on building the Battery Business Unit. In 2018, he left Telsa to found Span. Arch holds a B.E. in Automotive Engineering from the University of Madras and an M.S. in Mechanical Engineering from Stanford.
In this episode, Arch tells me about his career leading up to Span, the company's mission to electrify the home, and what makes Span unique. We have a lively discussion about why traditional electrical panels need to be innovated, what the market looks like today, and how to incentivize homeowners to make the switch to renewable energy. Arch is a fantastic guest, especially for those looking to learn more about home electrification.
Enjoy the show!
You can find me on twitter @jjacobs22 or @mcjpod and email at info@mcjcollective.com, where I encourage you to share your feedback on episodes and suggestions for future topics or guests.
Episode recorded May 5th, 2021
In Today's episode we cover:
An overview of Span and its technology
Arch's career path and what led him to found Span
The impact homes have on climate change from a fossil fuel consumption perspective
A look at why EVs were not prioritized in the same way solar was at the onset of renewable energy
What is wrong with the existing electrical panel, why it needs to be improved, and what makes Span unique
The pros and cons of new panels versus retrofitting the current technology
The landscape of home electrical panels before Span and the major players in the market today
Span's customer base and what makes homeowners a good customer
The cost comparison between Span and traditional electrical panels
The most significant barriers to electrifying the home and the best entry points for those looking to make the switch to renewable energy
How utilities fit into electrification and the distinction between regulated and deregulated markets in regards to utilities
Whether subsidizing electric panels is viable and where policy fits at Span
How to build trust among the customer base as a venture-backed startup
Links to topics discussed in this episode:
Those with solar-powered homes will find this app-control electrical panel indispensable
Span is hiring! Various positions across Hardware Engineering, Legal, Operations, Product, Sales & Business Development, and Software Engineering. Check out open positions here.
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Hello everyone. This is Jason Jacobs, and welcome to My Climate Journey. This show follows my journey to interview a wide range of guests to better understand and make sense of the formidable problem of climate change and try to figure out how people like you and I can help. Today's guest is Arch Rao, Founder & CEO of Span, a technology company reinventing the electrical panel to enable the rapid adoption of renewable energy.
We have a great discussion in this episode about decarbonizing the home, the role that the electrical panel has historically played, some of the challenges with how it is currently implemented, some of the opportunities to do so differently, the Span approach, what makes it different and special, some of their progress to date, what's coming next. And if Span is wildly successful, what role they play in decarbonizing the home. Arch, welcome to the show.
Arch Rao: Thanks for having me.
Jason Jacobs: Thanks for coming. Yeah, I think this might be, well ... Yeah, I want to say this might be the first episode we've done around electrifying the home directly.
Arch Rao: I'm glad to be talking to you about it. I think it's an important mission for us all to be on.
Jason Jacobs: So what is Span?
Arch Rao: Span is reinventing the home electrical panel. If you think about the device that sits at the nexus of energy coming in from the grid, all the devices in your home, especially the new wave of technologies like batteries, electric vehicles, and of course, rooftop solar, they all by design connect into the home electrical panel. And that device has seen, frankly, very little innovation or no innovation in over 75 years. So Span is a device that is a digital smart electrical panel that makes it easier to integrate these devices into your home, the renewable energy and distributed energy resources. And it makes it possible to optimize your energy or optimize your power flow once you have these devices connected to your home.
Jason Jacobs: Great. And where did this idea come from? And maybe even further back than that, what led you down the path of doing the work that you do?
Arch Rao: I've been fortunate to be in the clean energy space for a little over a decade and a half now. My very early work was in academia when I was working on advanced combustion strategies for engines. So how do you make combustion cleaner? After a few years of my research in the PhD program, I realized that's just not how we're going to change the world. Getting incremental efficiency gains out of engines is just not moving the needle fast enough. So I decided to drop out of the PhD and try to work on technologies that were going to have non-linear impact on our effort towards abating climate change.
So along the way, I worked on wind energy technologies, but very out-there concepts like airborne wind turbines. I worked on desegregation and energy metering technologies. And then most recently before I started Span, I was fortunate to be at Tesla helping build the Battery Business Unit. So starting with very early incarnations of what is now popularly known as a Powerwall as well as batteries that are very large-scale good connected assets that help us optimize or manage the intermittency of renewables in the grid.
Jason Jacobs: Well, this is a really timely discussion for me, because we actually just pulled the trigger on a Tesla [laughs] as a family. We don't have it yet, but finally I've been kind of so eager to get to starting to electrify our personal lives. And I feel like this is a wedge where it's like, "Oh, well, if we're going to get one of those, like, what else is happening in the home? And how does this stuff all go together?" So secretly, that might've been subliminally another reason to have you on the show is to[laughing]-
Arch Rao: That's great.
Jason Jacobs: ... is to get some free consulting about all this stuff. 'Cause it's all, uh, a lot of it's new to me.
Arch Rao: I'm happy to be your personal electrification consultant. I will not charge you anything for it. Yeah. It is an incredible thing, right? I think we have seen over the last roughly two decades the growth and adoption of solar, where solar is increasingly becoming often talked about solution for most homeowners. Over the last five years especially, we've seen the sort of rapid electrification of transportation. Maybe you've seen consumer vehicles becoming all electric. We're increasingly seeing commercial vehicles move into the demand of being all electric. I strongly believe that this upcoming decade is about electrifying everything in your home. How do you disconnect that natural gas pipeline coming into your home?
Jason Jacobs: That's what we have in our home, natural gas. I hate it.
Arch Rao: Unbeknownst to you, there's a significant impact you're having because of the amount of fossil fuels you're consuming, right? Because it's become part of your utility. That's what powers your water heaters, it's what power- powers your, uh, home heating system. And for most homes, that's what helps you cook every day. And I think that our existing technologies that can help you disconnect that dependence on fossils, right at the outside of your house, right outside of your home, but very, very hard to adopt today because of the limitations of the incumbent technology, like your home electrical panel and the amount of energy or power it can deliver instantaneous to you.
Jason Jacobs: And things like our slate roof.
Arch Rao: That's right. I can go off on a bit of a tangent or a diatribe about this, but I think solar has often been positioned as the anchor product, as the first product, but I think that's really not what's getting the adoption of EVs or batteries or home electrification products. That's part of what we are trying to enable as well is, how do you make it such that every home, not just single family homes with the perfect kind of roof, can move towards a cleaner home, but how do you make every homeowner, every home move towards less dependence on fossils?
Jason Jacobs: And so what is the Span origin story? When did it come about? How did it come about? And why did it come about?
Arch Rao: Yeah, um, I started Span in the fall of 2018 or a little bit before that in the summer of 2018, I should say, when I officially incorporated the company. I had been at Tesla for about five years prior, and I left Tesla in the spring of 2018. In my time at Tesla, I was very fortunate to work on a number of things. I led, like I said, residential commercial and utility scale, uh, the product teams that built products for all these market segments. And I was part of the team that also helped integrate the solar products once Tesla acquired SolarCity. And you can say I was fortunate or unfortunate to manage the Solar Roof Team for a little while where we oversaw the deployment of the very first generation of roof tiles. In all of this, whether it was in the US or in Australia or in Germany or UK, there was a very consistent team.
The level of complexity when it comes to adopting solar and batteries and EV charging is still incredibly high, which means they're often not seen as appliances in your home, they are seen as aspirational improvements to your home. And one of the key pieces of technology that nobody seemed to be working on is, what does an integrated solution for home look like? How do we make it such that you don't have to retrofit your existing electrical panel, your circuit breaker device, that is ubiquitous, right? It's present in every home, anywhere you go in the world. We've often been circumventing the problem or solving for solutions around it by retrofitting it with CTB sensing, by retrofitting it with gateways, with controllers.
And that to me seemed like a very inelegant solution. And you go back to the drawing board and it starts to become immediately obvious, if we make the panel integrated with metering, with controls, with a computer, with the ability to sense the health of the grid and the power flow in your home, it now makes it possible to integrate solar and batteries and EV charging electric appliances in a much easier fashion, both in terms of reducing operational costs, as well as adding functionality to the home. So that's what I did. I left a great job at Tesla where I learned a lot, and I decided to focus on reinventing the home electrical panel, which nobody else was doing at the time. And two years since, we are now in a lot of homes, and we're continuing to scale and hopefully enable faster adoption of clean energy.
Jason Jacobs: I mean, EVs had certainly been on the radar a lot prior to that as had solar. Why do you think no one was doing it? Is it that no one had tried, or that there was a bunch of bodies on the road of companies that had just come and gone?
Arch Rao: Yeah, I think it was a confluence of things. People were obviously tackling what was either a lowest hanging fruit opportunity or what was a major technology barrier, right? We've seen companies work on higher efficiency sort of modules. And we've had companies obviously work on lower cost power electronics, and now increasingly scaling up lithium-ion manufacturing to make batteries more affordable. I don't think there were very many people seeing this as a problem. And as you think about the rate at which we were beginning to deploy solar and EV charging in batteries, it became more and more common that the electrical panel either had to be upgraded or replaced.
You kind of had to be in the know, right? You kind of had to be the person either responsible for or very close to the deployment of thousands of these systems to then see that the electrical panel was a bottleneck, which we're often solving by, not by using technology, not by applying new architectural approaches to solving the problem, but instead just brute forcing your way through it, which is buy a [inaudible 00:10:29] panel or buy two of them, and then have a smorgasbord of stuff on your garage wall that kind of worked but required a whole lot of customization. Again, having lived it for many years, it became obvious, painfully obvious to me that the panel was an opportunity that nobody was looking at.
Jason Jacobs: And the existing electric panels, what is it specifically that they're missing that you feel like is required to do this home electrification at scale effectively? And then maybe talk a bit about the Span approach.
Arch Rao: Sure. The traditional electrical panel has, architecturally has remained the same for a very long time, which is you have power coming in from the street, like the utility, a means if you will, and then it's a multiplexing device. It distributes that power to different parts of your home, and it does so very well and it does so through a safety device called a circuit breaker, right? And that's all it does. When you want to introduce a solar system and you want to measure how much solar you're producing, you have to add on a meter to do that. When you add a battery for it to be able to assess how much power it needs to inject into the home, you need to add an additional meter that's measuring how much your home is consuming at any given point in time. When you want to be able to have these devices communicate with one another, or have the consumer be able to control these devices, you're adding a computer or a gateway that can then interface with the meters and the battery and the inverter of the solar system, right?
I'm sort of telling you an elaborate story here, but I'm sure this is becoming obvious, right? And now you want to think about being able to operate off grid, you're having to introduce a disconnect device that then has to sit between where your supply is and where the rest of your loads are, where your critical loads are. All of these components have been piecemealed over the last decade or half a decade, which means your solution is not just, "Here's my solar system and here's my battery, and then it works with an electrical panel," it's often, "Let me come to your home, Jason, and figure out, how do I rewire your home. What are all the different third-party components I need to add to it to make it work?"
And therein lies the opportunity. Within our panel, we've integrated the ability for us to monitor the grid and determine when it's safe to disconnect and when it's safe for the join. We have the ability to measure every circuit, that means every major appliance and every appliance downstream. We have the ability to control every circuit and also control some subset of major appliances in your home, and it's got an edge computer or a computer built into it that is purpose built to optimize the power flow in your home.
Jason Jacobs: And so when it comes to installation, is this something that really makes the most sense at new construction? Or is retrofitting into an existing home that ... I mean, at least in my neighborhood, the homes have been around a long time. So maybe talk a bit about each of those cases and where Span works best today and in the future.
Arch Rao: Yeah. Frankly, it's both. The new home construction space, it's no-brainer because you are already designing and roughing in space for you to put in an electrical panel. Putting in a panel like Span that both solves for solar mandates in California and gives the customer the easy optionality to add batteries or EVs in the future without having to redesign their electrical system makes a whole lot of sense. But where we are seeing the most amount of traction and demand today is retrofitting into existing homes like yours and mine that have been around for a few decades or are getting solar and battery and EV charging or some combination thereof.
What's, a strong impetus that is new today is that, as you add these new loads and new generation devices and new storage devices, it is no longer the case that the largest load in your home is your air conditioning system. If you looked at most homes 10 years ago, the largest power draw was your air conditioning, which probably drew around four or five kilowatts at any given point in time. That's no longer true. Your EV charger draws about the same or more. Your battery can push or pull about the same or more. And your solar system, the average system size has gone up like seven, seven and a half kilowatts, right?
So the electrical panel, agnostic of Span's existence, is now being upgraded. It's not being forced to be upgraded in every home just to be able to accept these devices being connected to your home. Therein lies the opportunity. If you're going to be doing a service upgrade or a panel upgrade or a panel addition, Span slots in incredibly well into most jobs.
Jason Jacobs: And when you talked about the way things had been before Span, it sounded like there were different pieces of equipment or wiring that needed to be done and things like that. So who are the big players for the electrical panels? And is it them that's also providing the other equipment that you mentioned and those services, or is it someone else? And then I have the same question about what that ecosystem of products and services looks like in a Span world.
Arch Rao: If you stare at it, it starts to hurt your head because you have the electrical panel that's produced by incumbents like the Schneiders and the Siemens and the Eatons of the world that you can pick up at a distributor like Home Depot. You have the bulk meter that is provided by the utility, which is your quote, unquote, "smart meter" by the utility. You have an energy meter for the home that's usually a third-party current transformer, or a CT-based device, that the solar installer usually buys from a third-party vendor. You are often, in some geographies you're required to use a next-generation output meter or an NGOM, that's another metering device that's a third-party vendor provided system. And then of course, you have a third-party meter for the solar or battery, et cetera, et cetera, right?
So as you can tell, there are just too many ad hoc components that have to be added to your home in order to make the solar or battery installation work. Not to mention, you have the complexity of having to wire all these things together, and every home becomes a custom exercise. And oftentimes, the electrical installer shows up at the customer's home and then they have to figure out what brand, make and model of electrical panel you have and find the corresponding circuit breakers, et cetera. So long and short of it is the operational cost is just incredibly high, and that's a significant impediment to the rapid adoption of distributed energy. And my view of the world is, we really want to get to a place as soon as possible where getting a solar system or a battery or an EV charger installer in your home become as easy as getting a home appliance, right, like getting a washer or dryer installed where you can just pick a system online, have a pro come and install it for you.
That, if you will, is the problem statement, right? And how did we achieve that? We built a panel that truly integrates all those things that I talked about. It's got a clear disconnect. It's got metering. It's got controls built into it. It's got compute built into it. It's got compute built into it. So when you show up to a customer's home, every installer's now homogenous. You're not guessing at what loads are going to be backed up versus what's not. Every load and circuit in your home is backed up by design without panel. And you're literally just able to run the AC cables from the solar inverter or the battery system to EV charger and you're done.
Not to mention, we can also support any brand of home circuit breakers. In my home, for example, the Span panel that I have houses a Square D breaker, a bunch of Eaton breakers and some Siemens, Murray breakers. And they're designed to be interoperable, which further reduces the installation time and cost.
Jason Jacobs: So from an installer's standpoint, is it the same installers that are installing the Span panel versus the traditional panel? And if not, who? And if so, what training is required to enable them to do this work effectively?
Arch Rao: Yeah. We've really engineered the system to be incredibly easy to install with very minimal or no real training. So any licensed electrician that can swap out an old at- or incoming traditional electrical panel should be able to pick up our product and install it today.
Jason Jacobs: So is it the homeowner that's the ultimate buyer of these panels?
Arch Rao: Right. Much like your solar system or your battery system, the homeowner is the ultimate buyer, but we are offering the product through solar installers, right, the solar financiers of the world that bundle the solar inverter, solar panels and the battery as a ... the form of a PPA or a loan or a lease, if you will, right? And so our product becomes a component of that sale and is ultimately owned by the homeowner.
Jason Jacobs: And maybe you just answered my question or at least provided some clues on how you might answer it, but what criteria make a homeowner a good customer for Span?
Arch Rao: If you're getting a, uh, solar system that requires a panel upgrade, you're a good customer for Span. If you're a customer that's getting a battery system, there is no better backup solution than Span today in that no existing or pre-existing backup solution offers the kind of whole-home, real-time and controllable backup capabilities that the Span panel provides. So you're a very obvious customer for Span. If you're a customer that's getting an EV charger, EVSE installed in your home and you're moving towards more electric home, Span is a fit for you. And one thing that takes a couple of mental hops to understand is, as you continue to add these electric appliances to your home, be it an EVSE or a battery or induction cooktop or a heat pump, inevitably sometime over the course of the next several years, your electrical panel will become under capacity depending on what the service rating is, be it 100-amp or 125-amp panel, you're going to need to upgrade that any way.
And what Span allows you to do is minimize the exposure to costs for continuously upgrading your home service in that we can manage the amount of loads that are running at any given point in time digitally. So we can limit the amount of power that needs to be brought into your home while giving you a lot of flexibility in terms of the different types of appliances in your home that can become electric. So these are all customers that are, I would say, is a good customer for Span today.
Jason Jacobs: What does the cost look like of Span versus the traditional panels?
Arch Rao: Much like, you know, like the Nest Thermostat came and it was not a cost competitor with the traditional analog thermostat. Like, we are about an order of magnitude more expensive than a, equal to a 200-amp panel of the incoming product, right? So you could buy a, like a Square D or Siemens 200-amp panel at Home Depot for a few hundred bucks, 200 or 300 bucks. The Span panel sells to installers for a few thousand dollars in the $4,000 range today. Fully installed, it's about $6,000 to the homeowner, but it's all part of typically a larger sale of a solar and battery system.
But the key thing to note there is, we are not just a circuit breaker panel. In it's simplest form, in it's dumbest form, if you will, it's a safety device that can house circuit breakers. But in reality, we are a whole lot more. We're a, you know, grid disconnect, a meter or a controller, a computer, et cetera.
Jason Jacobs: And if I'm a potential customer that's considering this, if I don't go with Span, what am I missing out on? Because you told me a bunch of things that Span has that the traditional one doesn't. But what I wanna understand is, what are the things that the customer really cares about and would feel acute pain about if they didn't have?
Arch Rao: Today, if you get a battery system or a battery backup system for your home, almost the very first question, uh, the installer is going to ask you is, "Hey Jason, what part of your home do you want backed up? Or which circuits do you want backed up?" Because unless you go to a multi-battery system where you buy multiple 10 to 15 kilowatt batteries that can give you between 10 and 15 kilowatts of available power, you cannot back up your entire home, right? With the Span panel, you can back up your entire home, even if you just have a single battery, because we have the ability to turn loads on or off dynamically and, or give you the controls.
What that translates into is you get a Span app where you can set and forget or determine in real-time what circuits in your home you'd like to have as high priority, which is, you know, uh, always-on loads, medium priority, which is, you know, nice to have as long as I have enough battery and the outage doesn't last very long, or non-essential. That functionality simply does not exist with any battery solution out there today, any backup solution out there today.
Jason Jacobs: And when you look at the overall quest to electrify the home, putting Span aside for a moment, what do you think the biggest barriers are to more wide scale deployment of home electrification? And what are some of the things that if changed would have the highest impact on accelerating that transition?
Arch Rao: The moment in time where our customers think about electrification is oftentimes a moment of panic, right, in that the only time I think about replacing my water heater is when my current water heater fails. And when it does, the last thing I wanna do is figure out the complexity of how to electrify my water heater and the cost associated with upgrading my electrical system to do that, right? So more often than not, I wake up and I pick up the phone and call the first service provider I can find on Yelp and have them come and replace it with a gas water heater, which means you've now lost that customer for another 10 years again, right, at least. Because once you've put in a new water heater, you're not gonna revisit that decision, or a new gas-based water heater, you're not gonna revisit the decision for many years to come.
I think that is kind of the fundamental problem in that the complexity or the cost of adopting electric appliances today is very high because of the associated cost of having to revamp your electrical system. So a combination of smart panels like Span that can enable you to avoid the significant cost of upgrading your service can then defray that cost of adopting an electric appliance. Is what you can actually say, "I want to move to an electric water heater, because with a smart panel like Span, I don't have to spend $10,000 to upgrade my service. It's just the one-for-one cost of replacement with an electric system."
And separately, I think if we start moving towards programs that encourage customers, much like we have now solar mandates in California or EV rebates, I think moving towards a program where not just the core technology like heat pumps or electric water heaters are incentivized but also associated technologies like panels are incentivized, then I think the rate of adoption can go up significantly.
Jason Jacobs: And what generation of device are you on now? And if you look at that roadmap as future generations come, what are the areas that you feel are most important to innovate on? And what can consumers expect from Span in the future?
Arch Rao: Yeah. We are just, we're in the second-generation product right now. We've got a lot of field experience deploying the first-generation products, and we'll be going to market with a sleeker, smaller, lower cost product very shortly here that becomes applicable to every home, right, not just single-family homes but also, you know, single-family homes with multiple panels, condos, apartments, et cetera. Because we think that's a category of customers that have been unloved when you think about solar being the first product that you introduce to them.
Jason Jacobs: And for those customers, would, would solar still be the best entry point, or is that less relevant if you, for example, are a condo owner in a high-rise building?
Arch Rao: It's much less relevant to think about solar, right? And that, at that point, you're either looking to get solar from, like, a community solar system that might be rooftop or adjacent to your condo, or you're looking to procure green energy from your utility or CTA, Community Trust Aggregator. That's how you offset your carbon footprint. But at the same time, things that you can put in your home, you still care about resiliency whether you live in a condo or in a single-family home, right? So things like batteries can be made possible with our device, things like electric appliances can be made possible with our device.
Jason Jacobs: I mean, that does bring up an important question. Actually, I poked on Twitter for some questions leading into this discussion, and we did get one around resiliency and how Span fits into that story.
Arch Rao: Yeah. So resiliency is, has become increasingly important, especially in the last couple of years. You can certainly draw the connections between climate change and sort of the natural disasters that we've been encountering here in California and Texas and the Northeast, et cetera. So I think there are sort of two pieces to this. One is, making technologies like batteries safe and available for a large number of customers, safe affordable and available to a large number of customers, but at the same time, making it such that the cost of installing them and the amount of batteries you need is reasonable, right? Most homes cannot afford to have 30-kilowatt hours of batteries supporting their home.
So what we are trying to do is two things. One, with the amount of controls we have within our device, we're able to provide customers a better outage protection with a smaller battery, because we can turn off non-essential loads in real-time as opposed to letting the battery just discharge into whatever's on in your home, right? So it, it gives you more, more duration of all this production with the same quantity of battery. The second thing we're able to do is provide meaningful insights into what's happening in your home in real-time. Because we're able to monitor it at a circuit level, because we are able to monitor the health of various appliances, we're increasingly moving to a place where we can inform you when there's an opportunity for you to upgrade your aging appliances with a more efficient and potentially electric appliance.
Jason Jacobs: Got it. And then, where do the utilities fit into all of this? And I guess I'll ask that question both in regulated and deregulated environments in case there's any distinction.
Arch Rao: Utilities are going to be a very important part of how we migrate towards electrification. A lot of utilities are, have obviously started playing an important role in offering customers energy efficiency solutions but also now solar and resiliency like batteries and EV charging solutions. We've already partnered with a couple that we've announced publicly. We've partnered with Green Mountain Power in Vermont and with Silicon Valley Clean Energy here in California to start to offer customers the Span panel both as a battery paired device but also as a replacement for the panel or the replacement for the smart meter.
Because we have the ability to provide higher resolution metering information to the utility and we have the ability to provide more granular information to them about different circuits, it provides them a whole lot more visibility at the edge of grid. But more importantly, we're able to give them the ability to control loads at the edge of grid in a more robust way. So think about programs like demand response that have existed for a long time. They are very, very dependent on customers enrolling into specific programs for either thermostat control or air conditioning control or water heater control. Whereas with the Span panel, you're now able to monitor and control multiple circuits or multiple loads, and it only requires the customer to enroll via the app saying, "Hey utility, you can now control circuits three, seven and 14 between 3:00 and 5:00 PM on weekdays [crosstalk 00:29:07]," right? That level of fidelity is incredibly valuable to a utility and a grid operator.
Jason Jacobs: I'm bouncing around a bit, but you mentioned solar as a good channel. What about EVs and EV manufacturers?
Arch Rao: We are increasingly working with electrical installers, uh, electrical contractors that ultimately become the level of service providers that support solar installation, EVSE installs and other appliances being installed in your home. So what we are finding is there's a significant pull from consumers when they see technologies like Span that can be added to their home and can get them ready for products like EV charging and batteries. We are seeing some partnership opportunities with battery companies and EV OEMs to help them get the customers to adopt their products faster, right? One of the limitations with, uh, customers purchasing EVs or batteries today is oftentimes they fall out of the sales process when they realize that there's a huge amount of upfront costs associated for adopting these technologies, where we can come in and help them lower that cost fairly significantly, because we directly reduce the OPEX of installing these systems.
Jason Jacobs: And another thing that comes to mind is on the solar side, I understand that in the early days thing like the SunShot program and subsidies to consumers were an important part of jump starting solar adoption. Is there any of that happening on the electrical panel side, and should there be?
Arch Rao: There isn't to my knowledge, and I think there should be. There are a number of organizations, including Rewiring America that Saul Griffith started along, uh, Calisch. Coincidentally, Saul is an advisor to Span as well. Uh, they're looking at educating the Biden Administration and working with different lawmakers to provide incentives for products like Span or smart electrical panels that can do two things, like one, reduce the friction or reduce the upfront burden of transition to electrical appliances or electrified homes. And two, can really enable economic growth by creating opportunities and jobs for a large number of electrical contractors that are already present in the country. So we certainly see a path there, and we're hoping to see more of that become programs that we can subscribe into in the coming years.
Jason Jacobs: Uh-huh [affirmative]. And given that you've raised a fair bit of capital at this point, are you staffing to any type of government relations or, uh, policy advocacy internally? And if not, any plans to do so in the future?
Arch Rao: We certainly plan to do so in the future. Right now we are partnering with organizations like CalSERVE that are a strong voice for us. And we're also partnering with other technology developers in our space, you know, competitors or otherwise, because we think we need a unified voice here.
Jason Jacobs: And looking forward, what are the key goals or KPIs that the company is trying to achieve over, say, the next 12 months?
Arch Rao: We are well past the point of, uh, technology validation. You know, we're into scaled manufacturing right now. And we're well past the point of early product market fit. We have, you know, strong indicators of demand. We have really strong installation partners. So right now, the core focus for us over the next year, next 12 months is, how do we get as many homes enabled with Span as possible Our singular focus is deploying a large number of systems. And adjacent to that, we're continuing to work on features and capabilities on the product that continue to deliver customers just a phenomenal end customers experience, right, through over the air software updates and they are ready for us to control devices in your home through the Span panel.
Jason Jacobs: Is it exclusively a channel model, or do you have a direct sales force as well?
Arch Rao: We do have a small direct sales force. Having built products and distributing for a while now, it's incredibly important for us to have the touchpoint both with the homeowner and the installers that are handling our product, if you will. So we do have a number of customers that come to us directly, and we have a small sales team that supports them from understands the benefits of Span, understanding what battery systems and solar systems we are currently interoperable with and all the way through identifying the electrical contractor through our network that can install it in your home for you today.
Jason Jacobs: Uh huh [affirmative]. Great. And if you could wave your magic wand and change one thing that is outside of the scope of Span control, what would you change and how would you change it to most dramatically accelerate your progress?
Arch Rao: I think there are a few areas that I can think of, but the most important one I would say is the solar and the electrical contractor ecosystem is very poorly organized. And there's a lot of misinformation out there, right? The cost of solar and the cost of storage adoption doesn't have to be as high as it is today. And part of that is customers not being in the know about what technology options there are. And part of that is the soft costs associated with the adoption of these technologies, be it the permitting timelines or the interconnection of costs, et cetera. So if I had a magic wand, I think that's probably where I would point it is, how do we reduce the burden to customers so that the cost of option can go down and the rate of adoption can go up?
Jason Jacobs: Uh huh [affirmative]. And that actually reminds me, I think it was Duncan Campbell from Scale Microgrids, tweeted at me a question to ask, which was just given that you guys are venture-backed or for any venture-backed consumer product company, I guess, not just Span, what would you tell customers that are worried that if they put a core piece of infrastructure in their home from a young upstart, that that company might not exist three years or five years down the line?
Arch Rao: Needless to say, my view is we're gonna exist for a long time to come [laughs]. But that's a fair question. We have designed our systems to outlive homes, right, in that we are warranting our product for 10 years. We d- the design life of our product is 30 plus years. And the simple answer to that question is, if you strip away the remote intelligence, like our cloud connected capabilities or the Span app, if you will, presuming that we don't exist, the system still functions flawlessly, right? It is still a control system for your home that you can control locally. It is still a safety device that has, uh, traditional breakers in it and does not require you to do any fancy remodeling or revamping to have it be replaced. It can remain in your home for the next few decades and continue to be that second breaker device for your home.
Jason Jacobs: One question I didn't ask is just for anyone listening that's inspired about what you're doing, where do you need help and what kind of people might you want to hear from?
Arch Rao: Glad you asked me that. We are, with the new round of funding that we have and the commercial partnerships we have in place, we are growing fairly rapidly. Um, we are a team of about 55 today, and we're growing to a team of almost 100 by the end of the year. And that's hiring people across all fronts. We are bringing onboard folks on the commercial side that can help us partner with the right solar installers, with the right electrical contractors and the right utilities to scale the adoption of Span. We're bringing onboard folks on the operations side that can help us deliver and install systems and train electrical contractors. We are hiring a number of folks across different engineering functions spanning firmware, so embedded software, a cloud and mobile software and, you know, hardcore engineering faculties like electronic board design to mechanical engineering.
Jason Jacobs: Great. And is there anything I didn't ask you that I should have or any parting words for listeners?
Arch Rao: No. I appreciate the opportunity to share my journey with you, Jason, and then talk about what we're up to at Span. I think there's a lot for us to do ahead of us. And like I said at the top of our conversation, I strongly believe that this decade is going to be our effort to transition towards electrified homes. And I'd like to invite folks to come join us on the journey.
Jason Jacobs: Well, this is such a natural point to break on. But there's one question that just popped in my head that I wanna ask you anyways, even if it's a little awkward. And that's just, in your wildest dreams, if you look back, say, 10 years out or maybe even longer and you achieve everything that you set out to achieve and more, what have you accomplished?
Arch Rao: I think it takes on the order of 10 years or more to build really impactful companies and develop products that wow customers. I'm hoping that 10 years out, I'll be looking back at having built a company with some exceptional people that has had a significant impact in abating climate change. And we have a very interesting roadmap of products that goes well beyond just the panel that we're offering in to market today. So I'm hoping that we will have executed well on delivering those here in the US and globally, and starting to be able to talk about our impact in gigatonnes tons of CO2 abated. That would be, that would be great to look back at.
Jason Jacobs: Well, that's a terrific point to end on. So Arch, thank you so much for making the time to come on the show. And best of luck to you and the whole Span team.
Arch Rao: Thank you very much for having me, Jason.
Jason Jacobs: Hey everyone. Jason here. Thanks again for joining me on My Climate Journey. If you'd like to learn more about the journey, you can visit us at MyClimateJourney.co. No, that is .co, not .com. Someday we'll get the .com, but right now, .co. You can also find me on Twitter at JJacobs22, or I would encourage you to share your feedback on the episode or suggestions for future guests you'd like to hear. And before I let you go, if you enjoyed the show, please share an episode with a friend or consider leaving a review on iTunes. Delores made me say that. Thank you.
