Nico Johnson  00:00

If I told you that millions of households in Europe are already generating their own power using solar systems they simply plug into the wall, you might assume we're talking about some niche experiment, but we're not. In Germany, plug-in solar, often called balcony solar, has become a mainstream consumer product. Meanwhile, here in the United States, policy makers, utilities installers, and millions of YouTubers are still debating what role these systems should play. Today's guest is Stephan Scherer, co-founder and CEO of CraftStrom. Stephan has spent nearly a decade helping shape and sell plug-in solar market and products first in Europe and now here in the United States. The question for today's conversation is quite simple: Can solar become an appliance? Stephan, welcome. It's great to see you. Thanks for taking time to join us here on Sun Cast.

Stephan Scherer  00:55

Thank you for the invite. Happy to be here.

Nico Johnson  00:57

I'd like to get a short version of your journey. How does someone go from energy consulting to becoming obsessed with something like plug-in solar, which even when you all really helped popularize the product category, was very much a niche product.

Stephan Scherer  01:15

I took a couple of detours there, as you mentioned, I was in energy consulting, I started out in the oil and gas industry, but by 2016 or so I decided that I wanted to do a consumer product going towards democratization of renewable energies, because the entire group of founders of this company grew up in rental apartments in big cities, so no way for solar installation, right? So, when we first heard about the idea of plug-in solar, which, by the way, has been around since the 1990s it was called guerrilla solar back then, because it was considered illegal, and by the way, technology wasn't quite there back then, and regulations didn't exist, right? So, but by the mid 2010s Europe was starting to discuss these systems that might be able to be run similar to an appliance, so smallish in size, but to kind of take care of this base load. There were first discussions, first laws, first studies were being undertaken around 2014 and I was back then working on a solar container, fully automatically deployable, but it was, it was very niche, and it didn't really quite hit the mark. I, that's not what I wanted to go. I really wanted a product that anyone could use, and when I first heard about this, that there might be regulations, I started talking to public utility commissions, started talking to utilities in Europe and in the US, and decided, well, you know, there's something there. The first products that that came out, or that was actually just one product, that one test product that came out, it was 150 watt solar panel, but it costs 700 euros, so it was totally out of the range. It was not economical any sort of way. So we started thinking, well, what.. what does the system.. we took a step back and said, what does the system have to really contain? Like, what does it have to encompass? This

Nico Johnson  03:15

is the first product that you delivered, or the first product that you saw come to market.

Stephan Scherer  03:19

This was the very first test product with regards to plug in solar in Europe.

Nico Johnson  03:25

Okay,

Stephan Scherer  03:26

and only a couple 100 were sold. It was, it was just a test, really. It wasn't really marketable,

Nico Johnson  03:32

but again, is this a test that you did, or that was in the market?

Stephan Scherer  03:36

No, that was that was not us.

Nico Johnson  03:38

Okay, perfect. That was some clarify if you observed, so you observed that this product came into the market and didn't sell well for a number of different reasons.

Stephan Scherer  03:48

Yeah, it was, it was a little early. This was a test product run by a utility, by a green power utility in Europe. So that's that's essentially how I heard that. Okay, the time might be right now, if a utility is thinking about this. If there's a study coming out by Fraunhofer Institute in Germany, but the products weren't there, they weren't ready,

Nico Johnson  04:09

right?

Stephan Scherer  04:10

You're still talking about 300 watt glass panels on the more expensive side. Inverters weren't ready, there was no communication, you didn't understand really what was happening. How much were you producing versus what was the effect of the technology for you, the consumer? Right. So we took a step back and we said, well, let's let's redefine this. What do we need to do? What's necessary in Europe? What's necessarily necessary in the United States? We quickly found out that the United States wasn't quite ready with regards to standards and regulations, that then happened in 2020 when we can get back to that,

Nico Johnson  04:46

yeah,

Stephan Scherer  04:47

but 2016 is when, funnily enough, the Austrian government decided we're going to introduce a law based on this study. The study said, well, you know, you've got the same risk as, as any appliance, if you. Limited to the 800 watts that's now known throughout Central Europe, so there was really no downside to this. So the government created the federal law saying this is legal up to this wattage, but you need to register it. Very simple.

Nico Johnson  05:15

Yeah,

Stephan Scherer  05:16

Germany followed suit the next year, in 2017 same federal laws, but it took a couple years to get it right. Finally finished in 2024 I want to say there was a steep learning curve introducing this to Europe.

Nico Johnson  05:30

Yeah,

Stephan Scherer  05:30

from a regulatory side, but also from the knowledge, the technology technology side. So we, we were the first company to introduce integrated Wi-Fi into the inverters, because we said, well, back then those inverters actually came with cable connections to a data logger, and then the data logger could be connected to a Wi-Fi box. It's just cumbersome.

Nico Johnson  05:50

Before we jump into the innovations that you brought to market, I want to take a look through the entrepreneurial lens, like you and your brother founded Craftstrom to go after what was a very nascent market, effectively. Yeah, there's a, there's a law in Austria. It seems like Germany perhaps is going to follow suit. What did you see as an entrepreneur that perhaps most people missed or perhaps dismissed?

Stephan Scherer  06:12

Yeah, so what we saw back then, it was the same criticism that we see these days in the US, namely that all these systems are too small. Where is the economic value for the consumer? How is this going to really affect positively the consumer?

Nico Johnson  06:25

Yeah,

Stephan Scherer  06:26

where you know, if you know something about economics and about technology behind it, you quickly realize what there's always going to be an effect. Doesn't matter how small the system is, as long as you can, as long as it's affordable, as long as it's easily installable, you can do this yourself. You don't need to pay no one else to do this. Yeah, there will be a positive economic effect. So that it took some time to get this message across that you don't have to install a full on traditional solar system on your roof,

Nico Johnson  06:55

right?

Stephan Scherer  06:55

Because when you do that, you essentially design it for every single kilowatt hour you spend throughout the entire year,

Nico Johnson  07:01

correct,

Stephan Scherer  07:02

that includes nighttime usage, where you're not producing solar, right? That in that includes, you know, might be smaller renovations, you have a lot of machines hooked up, you're not, you don't want to plan a solar system just for that if it's not affordable, and in the United States, at three to $4 per watt, it just wasn't right, and this technology took out those soft costs completely, especially interesting in markets like Germany and the United States, where the interconnection process is a lengthy one. It's can be a very expensive one. The

Nico Johnson  07:36

interconnection process for traditional solar system,

Stephan Scherer  07:38

for traditional solar. Exactly, at

Nico Johnson  07:39

what point did you realize this wasn't just like a new product opportunity that could be a consumer product, but potentially an entirely new category.

Stephan Scherer  07:47

Oh, fairly quickly on. Yeah, the differences to traditional solar are massive, and when we started going to Expose early 2020s the criticism we got from the traditional solar industry is what kind of emboldened us even more. We got very angry installers in our faces, saying, "Oh, we're going to sue you, this is illegal. So that told me, "Okay, well, I'm on to something. If they're that scared, you know, you know, must be something to it. So, yeah, that criticism hit nicely. It hit where it needed to be.

Nico Johnson  08:19

Yeah,

Stephan Scherer  08:20

from there on, it, it was a slow process, being one of the first companies. It is not always the easiest path, as you can imagine. We had to pass a lot of certifications that then changed. Same thing here in the States, right? We're certified, we've been certified since 2021 Now there's a new certification out, so there's a lot of capital expenses going in into this, so it's, yeah, it's, it's a journey. It's an interesting one.

Nico Johnson  08:49

It was a slow process, but then it was like, it's like they say it was slow than all at once. The German market, a lot of folks will comment that something like 4 million households have now balcony solar deployed that seems like a rather large and quick upward upward trend.

Stephan Scherer  09:07

Oh yeah, oh yeah. If you look at the diffusion curve of any technology, you know, we've got this beautiful S curves, right? And if you look at diffusion curves for like the iPhone, how quickly that dominated the market, right? And we saw very few technologies can emulate that, and we saw the same thing with this technology, because essentially when we started, and this is late 2010s right, when we started selling, there were maybe a couple 1000 systems in Germany within, I want to, yeah, within three years, once 2022 hit with the Ukraine war, it ballooned. I mean, it was crazy. And we went from a couple 1000 installed systems to over a million within two, three years. It hasn't been that long. Now we're probably close to 5 million systems installed, so. One in nine households in Germany has one of these, that's not a growth curve that is easily replicable with traditional solar, because there's so much work that goes into this, from the planning stage to the interconnection phase, right?

Nico Johnson  10:14

Right,

Stephan Scherer  10:15

whereas with plug-in solar, it's essentially click, deliver, install,

Nico Johnson  10:21

amazing.

Stephan Scherer  10:22

Yeah, there's weeks, potentially, depending on, you know, if we're sold out or not. In our case, click being purchase

Nico Johnson  10:28

online, by the way. Like, yeah, exactly.

Stephan Scherer  10:30

Yeah, yeah,

Nico Johnson  10:31

it's a, it's a direct to consumer product that one can buy, have delivered the same way Amazon delivers product, and literally install themselves, self-provision themselves. So it's a functional market in Europe. Everything's been worked out, the kinks, etc. You've sold, I don't know, hundreds of 1000s, perhaps, of systems into that market. Why leave a functioning European business and be and focus on the US, where things are still at best tepid?

Stephan Scherer  11:01

Well, for one, that was always the plan. We always wanted to create the plug-in solar market. That's why, in 2016 we started talking to public utility commissions, you know, from Texas to, we tried in California to kind of evaluate what we would be needed, but by 2020 the National Electric Code, the NEC, actually had pretty decent articles that would allow us to install these technologies.

Nico Johnson  11:28

Yeah,

Stephan Scherer  11:28

so that was kind of the first push that we did. Ah, okay, well, you know, now we have a direction we can go. So we kind of further developed our products because they needed to be slightly different, slightly more complicated to adhere to local regulations in the US, whereas in Germany you've got the simple up to 800 watts, the equivalent in a 120 volt market like the US is 400 watts, right? So that's very limited, and in the US we use a lot more electricity, we use like three to four times as much as a typical German household, just to give you an idea. So, we need larger systems, we need to offset more, essentially. So, that required slightly more complicated, better technology, which we took the time to develop, and by 2024 we felt, okay, now we're in a good place, we want to switch markets, and also Europe, at that time was already a fully established market with these systems being sold in supermarkets. Yeah, large chunk of our solar panels ended up in, like, Home Depot, the equivalent of Home Depot or supermarkets,

Nico Johnson  12:36

right?

Stephan Scherer  12:36

Essentially,

Nico Johnson  12:37

yeah, you mentioned Little was selling to Holly,

Stephan Scherer  12:40

is now selling very aggressively in the UK. Also, plug in solar, plug in batteries.

Nico Johnson  12:46

You can walk in and get your groceries in a solar system all at once.

Stephan Scherer  12:50

You can literally carry it out, put it in the trunk of your car, drive off, and you've got it installed in an hour at home. It's fantastic, and that's the idea. It's pure democratization of this technology of renewable power.

Nico Johnson  13:03

Let's talk a bit about what you witnessed there in Europe. I think most Americans underestimate just how large this opportunity is, based on how much has been deployed, not just in Germany, but in places further afield, in Asia. Now we're seeing in the UK, all over the world, I think this category is going to take root. What was the problem that you perceived Austria and then Germany were trying to solve when plug-in solar first emerged?

Stephan Scherer  13:34

If you know the markets, electricity was always quite expensive, hence the absolute boom once the Ukraine war started in 2022 so it was literally trying to get those electricity costs down, and those are to the, to the big, the biggest chunk of those electricity contracts are typically not fees like in the United States, but pure electricity costs, so it's an easy way to get those down and be demand being what it is in Central Europe, you can, you can cut a big chunk out of your electricity bill with an 800 watt system.

Nico Johnson  14:11

Wow,

Stephan Scherer  14:12

and you can increase that once you have a battery, because once you have a battery, you can attach more DC power, you can produce more, and then just also essentially cover your household base load at night with that, but whereas in the United States we hear more and more it's also about resiliency. Yeah, so I think when we talk about plug-in batteries, those took a while to make themselves a market in Germany and Austria and Switzerland and Netherlands, wherever else, because grid, say grid safety is high, you get 99% 99.9% grid safety in these countries, whereas in the United States, we hear more and more that they also want this as a solution during, you know, power outages, so. Batteries are, think, I think, are going to be a money are going to have a much bigger impact, actually, than they're going to have in Europe.

Nico Johnson  15:06

Okay, what do you think was the tipping point where the product went from interesting idea to millions of installs?

Stephan Scherer  15:15

Interestingly enough, there was another utility in Germany, it was actually Greenpeace Energy that went to court because our WE, one of the largest utilities in Germany, was trying to stop this. They were trying to force undue processes in the whole thing, and they went to court and said, you know, this, we'd like to, the, we'd like to do this, this is how easy it could be. They shouldn't be fighting this, and they, they essentially paved the way for everyone. This was, I think, around 2019 or so. So, yeah, it wasn't just industry, it wasn't just consumers, it was powerful representatives of consumers, and Greenpeace Energy was such an entity. So, that, that was, that's what it was in Germany. In Austria, it was, it's a small country, too, you know. There wasn't a big boom or anything. It's just the law was introduced, the technology came, and it was adopted fairly easily.

Nico Johnson  16:08

Why 800 watts?

Stephan Scherer  16:10

800 watts is what we call in the industry a safe harbor tier. It means that no matter where you plug it in, in your household, which, whichever power outlets you're never going to overload your this, this wire, the circuit, yeah, essentially the circuit with with that amount of power, and here we're looking at the current, right, that we get the ratings through the current, so in Europe is a typical 16 amp breaker means that it can tolerate a bit more than the 16 amps, the wire can go like to 22 I forget exactly, and when you push these 800 watts at 230 volts, then you're pushing around three amps, and three amps falls within that safety buffer of the wiring, anyone trying to control this technology, NEC, and then UL through testing is always out to ensure that you don't burn your house down, which is great. We don't want that, right? So they give us these limits, and the NEC is very strict about that in the United States, and it says, you know, on a 15 amp breaker up to 1800 watts on a 20 amp breaker up to 2400 watts, that's it. No more, I

Nico Johnson  17:26

think it's interesting. So, you just mentioned 15 and 20, and you said in Germany it's typically 16 amps. Why would the US allow more than twice the amount that Germany allows on the same breaker size?

Stephan Scherer  17:39

It's the way that it is allowed, the 800 watts represent a pure safe harbor, meaning that you can plug it into any circuit anywhere on that circuit, whereas the NEC says no, don't do that, we do not allow that.

Nico Johnson  17:56

Yeah,

Stephan Scherer  17:56

there's two ways you can plug this in, one is you have a dedicated circuit, meaning there's one outlet, a long cable goes straight to the breaker in the breaker box, that's right, you can't plug anything else in there,

Nico Johnson  18:09

it's dedicated, yeah, it's

Stephan Scherer  18:12

dedicated, right. And then it's considered somewhat safe, yeah, and you can power your home through that outlet.

Nico Johnson  18:19

In that regard, it's no different than just direct hardwiring the system. You just happen to interface it, happens to be a plug.

Stephan Scherer  18:27

Yeah, exactly. In this case, yeah, correct. But how many people do you know that actually have a dedicated outlet, or know that, or can guarantee that it is dedicated? Right?

Nico Johnson  18:36

No,

Stephan Scherer  18:37

very few. There's some building standards in the states that now acquire this for your back, like your garden outlets, or in Texas, for instance, are supposed to be dedicated outlets these days.

Nico Johnson  18:49

Okay,

Stephan Scherer  18:50

no idea how many earthly are.

Nico Johnson  18:52

Yeah,

Stephan Scherer  18:52

honestly, so you don't want to plan for that. You can't really build a technology assuming that people are going to have that, or going to know that you're going to have to assume that people just don't know if it's a dedicated circuit or not,

Nico Johnson  19:03

right,

Stephan Scherer  19:03

or where on that circuit you are. So the NEC gave us a second paragraph of a second article, and this was in 2020 So now, now we're getting to the point where we're, we're, we're opening up your ears and saying, "Ah, okay, this could be interesting, because then they came up with this term, power control systems, and in effect was what this does. It's trying, this was trying to do away with the hard code of the hardwire 120 bus bar rule,

Nico Johnson  19:34

which

Stephan Scherer  19:34

said, you know, you can't overload your bus bar either.

Nico Johnson  19:38

Yeah,

Stephan Scherer  19:38

so you had to take your 120% of your bus bar reading minus the if you remember minus the the main breaker and that's how much solar power you could detach, right?

Nico Johnson  19:49

right.

Stephan Scherer  19:50

So then you'd automatically limit your solar power, and then if you wanted batteries, you were sheer the luck. So there's so they were saying, okay, so instead of doing this, instead of. Having these issues with hardware and having to replace whole circuit breaker boards and main breakers, which cost a lot of money. Let's just include a rule that takes into account intelligent systems, because we live in the 20-first century these days, they're smarter solutions than just replacing hardware, and these power control systems essentially said, well, if you know how much you're using in your home on both of these main cables on both phases, and that control center can talk to your inverters well, then the inverters can simply adjust their output to however much you're using, right? So, instead of making everything bigger on the hardware side, we made the software sites way more intelligent, and we can use that same paragraph, that same article for plug-in solar, and saying, okay, if you don't have a data circuit, then here's the trick, you just need to know what happens on that circuit where you're plugging it in,

Nico Johnson  21:00

yeah, and then power conversion device, or some sort of a monitoring device, that is the interface,

Stephan Scherer  21:06

yeah, commonly known as power meters or power monitors, yeah, because they're not utility meters, right? There, so there's something

Nico Johnson  21:14

right

Stephan Scherer  21:14

that are installed by an electrician in your breaker box, typically. Okay, clamps go around the main wires, it gets power, and it tells you exactly how much you're using on it. Now, with plug-in solar, you can take one of these sensors and put it around that circuit wire.

Speaker 1  21:32

Yeah,

Stephan Scherer  21:32

and that way you know exactly how much you're using on that circuit.

Nico Johnson  21:36

Yeah,

Stephan Scherer  21:36

and then all you have to do is make sure that how much you're using plus the solar power never exceeds a certain that rating.

Nico Johnson  21:44

If you think about the German market in particular, let's just focus on that. What do you think were the two to three decisions that Germany got right?

Stephan Scherer  21:50

They got absolutely right that they needed to simplify the registration process, even though you didn't need a full on interconnection agreement in the beginning, there were two governmental entities you needed to notify, so that alone was way too much work.

Nico Johnson  22:08

Yeah,

Stephan Scherer  22:09

so registration process. Yeah,

Nico Johnson  22:12

most people don't register products with the manufacturer, let alone with the utility, right? This is what, as I started researching this, I'm like, wait, how does this actually get done, and I remember in the, in 2006 time frame, when the California Energy Commission needed a homeowner to go through this whole process to get these rebates that were coming back to them, the installer effectively did the work for the homeowner, but I'm fascinated by this registration process, generally, because effectively, and what I've heard you say, and what I've read, and some other things that we'll bring into the conversation. This registration with utility is one of the things that makes the utility confident that things are being done right, so that they can say, okay, green rubber stamp, green light, go for it.

Stephan Scherer  22:54

Exactly. Yeah, not so they kind of want to know this for two reasons. One is load management, so a utility rightfully says, well, I want to know if someone is exporting solar power.

Nico Johnson  23:05

Yeah,

Stephan Scherer  23:06

and there's no interconnection contract, like, how much is it going to be, max, so I can plan for this.

Nico Johnson  23:11

Yeah,

Stephan Scherer  23:12

on the other hand, what they're installing, is that safe? Like, how do we know? And then, if you register the system, then you know by name. Okay, well, this system has certifications. It has it passes all the regulatory tests.

Nico Johnson  23:26

Yeah,

Stephan Scherer  23:26

so you do, we, we, and we embrace this like we say, yes, there should be a registration process. There shouldn't be an interconnection agreement required. That's unnecessary, because honestly, most people don't want to export anyway. I think 99% of our people, of our customers, don't.

Nico Johnson  23:45

Yeah, how's it audited then? Like, I understand that in Germany, one of the way it was registered is an online form. Yeah, but what sort of controls are in place?

Stephan Scherer  23:53

Yeah, it's not being audited, so there's not

Nico Johnson  23:56

like, I mean, you could imagine in a, in a very technical sense, you could have the utility essentially authorize a token where every manufacturer is required to, like, have received that token before the system can effectively be turned on, like the system has a way to check in and, like, see, like, was it registered. There are devices, nothing comes to mind for me at the moment, but you know, you can't start, you can't start a software process, for example, like initiate your software license without including your token. I can, I can imagine that sort of in the current blockchain world this could be feasible, but what you're saying is that Germany simply put the regular, the regulation in place, or the requirement in place, and said, "Hey, we trust you to do the right thing.

Stephan Scherer  24:37

Yes, but they simplified the process way too late.

Nico Johnson  24:41

Okay,

Stephan Scherer  24:41

which is why we're urging legislators, and that a lot of the work that I do is basically trying to talk to legislators, educating them, and what we used to do, what the problems were in this process in Europe, and how we can.

Nico Johnson  24:53

That gets to the point that I wanted to ask you. So, Matt, I'm like, we're on the question right now of like, what did Germany get right, and the registration was what.

Speaker 2  25:00

One,

Nico Johnson  25:00

and I also will want to unpack, like, what did they get wrong, but was, were there other things before we talk about sort of what came too late? What, what decisions were the right choices that kind of helped the German market? I'm going to use the term explode, but you know, rapidly diffuse.

Stephan Scherer  25:16

They dropped the safety plug requirement.

Nico Johnson  25:19

Okay,

Stephan Scherer  25:20

that was another one that simply just wasn't accepted by the market. You can't say it's a plug and play system and then require an electrician to come out and exchange one of the outlets that's then pluggable, lockable, sorry, pluggable, obviously, but lockable, so that it can't easily be unlocked by a child, which could then touch the prawns, the prawn quite question was was really never an issue in Germany, because the the certifications already required that these inverters shut down in less than a second, as so as soon as you unplug them, they're dead, essentially all of our inverters, so that was that was just a no-go. People weren't accepting it either, so they could spy a regular cable on Amazon or whatever. So they dropped that eventually. Also, because there's no reason from a from a fireman's perspective, I was, because I was talking to some fire marshals recently that wanted to know about this technology, yeah. And they were like, but there's going to be more obstructions on balconies if people install these systems.

Nico Johnson  26:30

Yeah,

Stephan Scherer  26:30

and I told them, like, yeah, that's why we are very much against these lockable plugs, because in a case of an emergency, whether it's a tripping hazard or whether you need to unplug it to make sure it's safe. Don't make it lockable, don't make it complicated, like let it be a simple plug, just so it quickly unplugs and takes everything out of the data. So

Nico Johnson  26:52

you can imagine, and in the United States, the answer would be an immediate no. You call this plug and play, but I have to call an electrician. No thanks. You call this autonomous and sort of self-reliant solar, but I can't actually access the plug inside of my home. No thanks. Yeah,

Stephan Scherer  27:11

which is why we need these safe harbor tiers, these small systems that don't have any special requirements. If we're talking about renters, for instance,

Nico Johnson  27:22

yeah,

Stephan Scherer  27:22

they're not going to install a 2000 watt c system anyway. Typically, renters don't have that much space, at least in our experience.

Nico Johnson  27:32

Yeah,

Stephan Scherer  27:32

I also wanted to say the other thing that Germany got right is they the cap sales tax to zero to 0%

Nico Johnson  27:44

Okay, 0% sales tax,

Stephan Scherer  27:46

0% sales tax on any of these.

Nico Johnson  27:49

Is the first time I've heard that is that is a nuance that is more than just nuance. Introducing a new product category with zero sales tax is, is an incentive.

Stephan Scherer  28:00

I mean, they did apply it to all solar products, yeah.

Nico Johnson  28:05

So, there was zero, but the

Stephan Scherer  28:06

prevalence, but the prevalence of these systems, and suddenly millions of people are buying these, right? It's, it was fantastic to see, and this is a 19% sales tax, right? Yeah, this makes a difference, so whereas in the United States, probably not as much.

Nico Johnson  28:23

Yeah, so it's clear that Germany found a path, 5 million plus data points to prove it. America seems to be having different conversation around how plug-in or balcony solar will work. Before the interview, I spent some time reading Daniel Gerber's Berkeley Lab work on plugin solar that you pointed me to, as well as some other commentary that you co-wrote with industry thought leader luminary Jigger Shaw, focusing first on Daniel Gerber's paper. It argues that adoption is being slowed predominantly by technical concerns, utility visibility concerns, as we were talking about even Germany and regulatory complexity, I'm curious whether that matches what your, your lived experience has been for the last six years. It

Stephan Scherer  29:08

has been a very complex process. Absolutely, yes. There's a lot more hand holding involved with regards to the customers, and there's a lot more interaction with regards to utilities in the United States to get these passed, right. Just because there are regulations in place doesn't mean that everyone is aware, and doesn't mean that everyone agrees. And the utility with quasi monopolies in many states, in many still regulated states, right, doesn't matter what the law is, essentially. If they say we don't want this, then there's not much you can do

Nico Johnson  29:41

right.

Stephan Scherer  29:41

What we found was that if we adhere strictly to the national electric code and sell our systems as PCs that are intelligent, that don't even export at all, really, then we could get past a lot of these hurdles, we could get past the interconnection agreement contract. Acts by simply saying, well, these aren't running in parallel, they're zero export systems. We could say these are safe because we do have products that ensure the circuit stays safe, right? So, home safety is guaranteed, utility safety is guaranteed, line man safety is guaranteed by having these certificates, but yes, it meant that in many states we had to send our certifications to the utilities, prove, explain how these systems worked, how they are zero export, that they are PCS. It was a bit of a delay, but it was nothing compared to actually getting an interconnection agreement and paying for it, and there's never ever any fees included, but it is a more complex product, more complex process. Definitely means more work for us. It also means that marketing is not very effective at this point.

Nico Johnson  30:54

We've been waiting for products to come online, like the ones that you all manufacture that are, let's call it qualified certified, that that the U that UL and NEC and the utilities would adopt, we do have products now. Yours, there's AP Systems, just introduced a product. There are countless companies that folks would recognize that are into sort of mobile storage and mobile applications that claim to have plug-in solar ready products. What do you see actually slowing adoption in the US right now? The

Stephan Scherer  31:29

fact that this is not federal law, this is state law, means that it's a very slow process getting these into the market, because people looked, especially now that people know, oh, there's laws coming for plug-in solar. Now, a lot of people are waiting for them to be signed and enacted before they'll purchase, even though it's perfectly legal and safe to run,

Nico Johnson  31:53

even though the code allows it now.

Stephan Scherer  31:55

Even the code allows it.

Nico Johnson  31:56

Yeah,

Stephan Scherer  31:57

yeah, yeah, it's just the fact that now we're talking about it. Now, there's laws being introduced, they're saying, okay, I'm gonna wait for that law, so that has, so interestingly, it's not just the effect from the from markets, market pull into, in general, it's, it's really the positive effect of these laws can also have this downside for suppliers like us that suddenly people are pulling back and saying I'm going to wait for this.

Nico Johnson  32:26

Sure. Well, help me understand something else. Then we talked about the system size limits in Europe. Why does it seem like so much of the US conversation revolves around this, what seems like an arbitrary conversation of like wattage limits, specifically, if we have, if we have smart devices that themselves can then can cap power and export. What is the conversation happening right now around wattage limits in the United States?

Stephan Scherer  32:54

Yeah, the conversation is again very new technology, so I'm not trying to denigrate anyone, but the conversations are not always the most informed ones, especially now it's a lot better, but especially in the very beginning when Utah came out with this law, Representative Reward was the first one to introduce this, that was fantastic, because that was a Kickstarter, right, that was a true Kickstarter, but essentially no one went beyond, and no one asked, was why, why 1200 why that number?

Nico Johnson  33:21

Yeah, which is the number that Utah passed. Yeah,

Stephan Scherer  33:24

that Utah passed, and then a lot of other states, such as California, now passing the 1200 watt law, right? So, what does that really mean? They're looking, the problem is the politicians are conflating two different topics here, and they're doing that because no one's made them aware that they're doing this, and we are working with legislators to fix that, but essentially what they're conflating is that question of how much does a utility want exported, max, and what is safe to plug in your home. Now, what is safe? We know because NEC tells us, right? Yeah, which is 15 amps, 20 amps, so max with 2400 watts.

Nico Johnson  34:00

Okay, on a 20 amp circuit,

Stephan Scherer  34:03

on a 20 amp circuit, correct, yeah.

Nico Johnson  34:05

And if you have a bigger circuit than that, and you know that it can hold it, but I don't want to get, we don't get too far down the rabbit, so we know what the NAC says,

Stephan Scherer  34:12

yeah, and that should be separated,

Nico Johnson  34:16

by the way, 2400 watts should be in size, yep,

Stephan Scherer  34:19

yeah, and that's that's a big size.

Nico Johnson  34:21

Yeah, it is.

Stephan Scherer  34:22

That'll cover your entire AC, even in Texas, like our five ton unit, that'll cover that for the most part. Yes,

Nico Johnson  34:29

wow,

Stephan Scherer  34:30

yeah, it's a massive system, and it's beautiful to see, because you can do this legally and safely,

Nico Johnson  34:35

totally.

Stephan Scherer  34:36

But at the same time, they're also worried about what they totally want, so they're trying to find this one number that will cover both, and that doesn't really work. You call your sector effectively limiting the user with this,

Nico Johnson  34:51

but what I thought.. well, I thought really what the utility wants is to know what's being installed.

Stephan Scherer  34:55

Yeah,

Nico Johnson  34:56

isn't that really what they want?

Stephan Scherer  34:58

Yeah, yeah, exactly. I mean. I'm sure to a certain degree they don't want these systems to be too large because they're still selling electricity to these people.

Nico Johnson  35:05

Sure, but they can't control that, and that's that's the same argument against residential solar to begin with. But you're saying they're trying to solve for what the utility wants. The utility wants to know simply what is being installed and how, and has it been installed safely? That's the registration process, not a system size process,

Stephan Scherer  35:21

correct. Okay, that's that's that's the problem, that's the confusion here. And trying to find one number that fits both doesn't work.

Nico Johnson  35:28

So, the problem the lawmakers think that they're solving is the wattage cap gives the utility a not a knowledge, so basically they're gonna, the utility is gonna assume everybody installs the same and the max size, if they've, if they've registered it, or if, if they're tracking sales of the product. I'm not sure, right? Like lawmakers, and even regulators have to ask the question. Well, how do we know how fast these things are going to sell, and how can we handle the back feed if they're not installed properly? If there are legitimate questions,

Stephan Scherer  35:58

yes,

Nico Johnson  35:59

and concerns.

Stephan Scherer  36:00

Absolutely,

Nico Johnson  36:01

what problems should they be solving? Instead,

Stephan Scherer  36:03

they should be really solving by answering two questions. Okay, the utility wants only x amount of wattage to be max exported. Okay, great, let's put that in the law. Do not even mention a limitation with regards to how much can go into the house,

Nico Johnson  36:17

right?

Stephan Scherer  36:18

Right, that's that's dealt with by buyer standards, there was that are very smart, and they should be saying, okay, no interconnection agreement as long as you never export as x1 that should be it, essentially.

Nico Johnson  36:34

How does the utility know if you're exporting?

Stephan Scherer  36:37

Well, the meters know,

Nico Johnson  36:38

they only ever know if it's a net export,

Stephan Scherer  36:41

correct, correct, correct, and that can happen in the mornings if you're not using a whole lot of power, or after your morning routine, you're not losing, you're not using a whole lot of power, you're starting to produce a lot of solar power, you might, you might potentially export a little bit, yeah, we

Nico Johnson  36:56

see this in in island communities like Jamaica has a zero net export policy, doesn't mean that people don't install solar, it means that the power conditioning devices that are installed have to have, to your point, smart software that can essentially say I don't sense anything coming in from the grid, I'm not going to accept anything coming in from the solar,

Stephan Scherer  37:18

and some states have introduced these safe harbor tiers up to 390 watts in Colorado and Maryland, for instance. That's the three amps that we were discussing before, right? The safety buffer with those, you don't need any of this, and fine, just export, because you're never going to export a whole lot from a 400 watt system, right? What's interesting, I

Nico Johnson  37:39

mean, that touches on the point you wrote in the article with Jigger on LinkedIn that plug and solar needs smarter rules, not simply smaller systems. What does that mean in practice?

Stephan Scherer  37:47

That means use all, use all the technology that is available to make these systems, rather than just going blindly by x. This is a number going to follow that number. We can be very dynamic with what we do with technology these days, right. That's why we call them power control systems, or energy management systems, whatever we should take. We should be taking advantage of modern technology rather than trying to hinder the market, essentially. And we know what the customers want, because we're selling in all 50 states, and customers want larger systems on average than 1200 watts, because they want a chunk of their AC system covered,

Nico Johnson  38:26

for sure. So, if you're advising state legislators in a conversation over the, you know, over the coming week, what are the components of the playbook that you would tell them to adopt?

Stephan Scherer  38:37

Well, to certain, so we actually help draft legislation that makes sense.

Nico Johnson  38:44

Yeah,

Stephan Scherer  38:44

we never try to over regulate. We always try to say keep language neutral to where it's not even just about plug in solar. Let it be plug in energy, for instance. You don't want to, you don't want to write something that might exclude batteries. No one's talking about plug-in batteries that much yet. Everyone's talking about plug-in solar, right? But plug-in batteries are becoming an essential part of this technology. If you write it incorrectly, you might be exploding batteries. We made sure that happened in some states, for instance, Maine. They're now going to start a program for plug-in batteries for VPPs, virtual power plants. That's that's going to be very interesting project. We say, you know, absolutely adherence to UL and NEC is a must, that must be in there, right? But if you want to make an exception, like Colorado and Maryland, that is the purview of states, because states enact the NEC, no one else does it for them, so they're allowed to make this exception. So we do support that, because if you want, for if you want the system to work for underserved communities, renters, etc. you need this one solution that is super simple, like the German model, right, but the. The same time we have to listen to demand, and we have to say, yeah, but everyone else might want a larger system, and there shouldn't be anyone stopping them, so we adjust the language to that, essentially. But it's not a huge difference. Those laws don't have to be changed that much. Just take the 1200 watts out, maybe introduce the safe harbor tier, make sure the language doesn't exclude batteries, you know, those are the corner points, kind of.

Nico Johnson  40:25

Yeah, it's funny, we use the same or similar language, right? Most people listening to this, when they hear safe harbor, are not going to think about safe harbor the way you think about it, right? They're going to think about it in terms of how what's covered under the current ITC tax legislation,

Stephan Scherer  40:45

we stole that term, and we're keeping it now. That's amazing,

Nico Johnson  40:48

you know. I'd like to talk a bit about what you've discovered around who finds this product useful and interesting. I know that when you started out, you kind of had a notion of who you thought would buy these systems when you first come into the market. Who was the customer that was really on top of mind for you? Who did you think was going to be buying these?

Stephan Scherer  41:13

Oh, absolutely. We thought it was going to be people like us living in apartments in major cities with balconies, you know, one or two panels on there. That's where the term balcony solar originated. Essentially, it wasn't - it wasn't guerrilla solar for in German, it was barcode solar in German, right? Yeah, so it was always that. It's still called that to this. It's not called plug-in. Some entities might call it plug-in technology, but no, the market says park on sort of climate-conscious

Nico Johnson  41:45

consumers, apartment dwellers, renters, etc. What did you, what did you find to be true? What surprised you?

Stephan Scherer  41:52

Yeah, it was very surprising to find that I want to say 90% of the market is homeowners that simply did not want to deal with a traditional solo installation.

Nico Johnson  42:03

Yeah,

Stephan Scherer  42:03

that said, I have enough demand that I need something, but I don't need, you know, 10 kilowatts on my roof, because I'm not interested in selling back. I'm not getting enough back.

Nico Johnson  42:14

Yeah, and it's funny because in some ways you think, well, maybe it'd be the DIYers, right? I spent some time watching a bunch of YouTube videos. I think Craftstrom has done a great job connecting with the creator community. There's a ton of, well, not a 10, there definitely are a lot of videos of folks talking about your product, specifically with Craftsroom, and I was fascinated by, you've seen this video, I'm sure, this guy in Texas who lined the fence of his backyard with crafts from solar modules, vertical, like not even, not even like tilted in the yard, you've got there are others who use the integrated tilt kit that you sell. I was just blown away. This guy was like, you know what, for the price it can't be beat. I'm just gonna, I'm hanging them on my wooden fence in my backyard. Did that disaster,

Stephan Scherer  43:02

it's beautiful to see what people do with it, and it's that's the DIY aspect, and I know there's there's different consumers, as you said, like there's the true DIY ers, they don't need us theoretically, they can source their own panels, they can only source their own mounting systems, they'll source an inverter, and then a power meter,

Nico Johnson  43:26

and many of them simply don't care what it looks like, they're very pragmatic, they're looking for electrons in the classic DIY market,

Stephan Scherer  43:35

exactly, whereas, because we thought, oh, balcony solar, this is going to be it. People going to be hanging them up everywhere. That's why we started designing these, these super lightweight flex panels that are framed now in 2017 2018 We started with this. Those are actually a best seller out of all components, was just the panels, and it just makes it a lot easier to install. It turns out people don't necessarily install them on balconies, but the fact that you've got smaller, super lightweight panels that weigh a couple of pounds versus 60 pounds for a large glass panel makes a makes a huge difference.

Nico Johnson  44:15

You told me something the first time we talked that completely challenged my assumption. You said a significant percentage of customers are over 70.

Stephan Scherer  44:22

Yes,

Nico Johnson  44:23

I would have guessed almost the opposite. Why are they showing up?

Stephan Scherer  44:26

Oh, they're showing up because what they have the time, they're investing time to research this. We found that they're investing time in designing their system, where they're going to hang it, how much to which phase. We do get customers that want products for both phases, essentially, because they know exactly how much they're using in each phase. And then, second of all, if you look at the US market, the pricing again, on average, we're still at around $3 per watt, right? We're selling our cheapest systems at $1.50 per. A watt

Nico Johnson  45:00

love that the prices

Stephan Scherer  45:02

you see in a website is before discounts, like so we give added discounts because we want people to talk to us, we want to educate you, we want to, we want to work with you, and that's probably the difference to other companies, to our Chinese competitors, that we have a very active sales and after sales team, and we even help you during install if need be, and consent a technician if need be, as well. Yeah, is

Nico Johnson  45:25

it fair to say, as well, that folks in later stages of life, and in some ways, are being failed, not by technology, but by financing.

Stephan Scherer  45:33

Absolutely, that is a major driver of customers 70 years and older to us, is essentially they're being offered the same loans that are offered to everyone else, and how is a 70 year old gonna finance a 2020-five, year old a year loan for a system that's going to cost them 60 grand? That's nonsensical. So they're finding us and saying, oh, this is perfect. This is exactly what I need, because I don't need, I don't want to export, I don't want to sell, I just want to get my bills down, and that's what we're trying to help them with.

Nico Johnson  46:08

It's so true. The traditional solar industry has spent years optimizing around larger finance projects, and you have to ask yourself, as an installer or as an entrepreneur, even what kind of customers fall through the cracks of that sort of larger project optimized finance machine. You mentioned that some installers are losing meaningful percentage of prospects because their customers can't qualify for financing. So, I'm curious, how common that problem is, and does that in any way driving installers, not just homeowners, you know, clicking through on websites, but are is the installation community the actual the entrepreneurs bringing these products to homeowners, are they seeing the same financing issue? Are they finding your products in a similar manner?

Stephan Scherer  46:52

Absolutely, are and we do have installers that are now resellers of our products that we heard from from those same installers that they're having issues selling to consumers, because consumers up to 40% of their consumers, or their potential clients, aren't getting the loans they need for those systems, so they're they're doing a 180 on the acceptance of our technology now, and reselling them too, and this this can have two effects: one is they're just selling the system, taking that profit, and that's good. Then they can sell more of these systems quicker. On the other hand, we always call this technology the gateway drug to solar, because it is - it's fascinating, kind of, it really grasps you. This technology for the first time, for very little money, you can have a system that tells you how much you're using and when you're using that solar power, that electricity, how much you're producing, and how that kind of correlates, and does it correlate at all. So, what we're also seeing with our customers, and that's where it comes in handy that we have a lot of older customers, because they love talking about their systems. Yeah,

Nico Johnson  48:01

they'll give you feedback, that's wonderful.

Stephan Scherer  48:02

Exactly, they'll give you feedback, and we get happy calls that says, "Well, I'm saving 50% of my electricity bill. I'm not going, "You're not doing that with just with solar, right? Your solar system is not big enough for that. But it's that educational factor that comes into play that suddenly they're realizing, oh, look at how much power I'm using, and I've got nothing made running, so what can I turn off? We had the same effect in arms as well, right? Yeah, and that's, and

Nico Johnson  48:30

that's a very similar effect that we see when in the residential solar category, broadly, especially consumers who pay out of pocket, consumers who pay either go get a loan from their own bank or they pay cash for a system. They're very energy conscious, you know. I'm curious. I started solar. I started in solar industry 2006 so it's been a couple of decades of watching sort of how these financing products have evolved. I'm curious whether plug in solar is actually creating a new category or simply serving a customer category that the industry largely stopped serving.

Stephan Scherer  49:04

Yeah, it's frankly that we sell a system size that is economic viable, but would never make sense with a professional install. Now, with mob and demob costs, yeah, it's a no-go to install a system that's less than two kilowatts. I think it is introducing a new category, but at the same time it is taking customers away from traditional solar that would have only seen that as a solution and installed the larger systems because it would have made sense economically during the acquisition process, whereas now there's suddenly this new completely new category and we're pulling in customers from the traditional solar industry, definitely. Yeah, but we're also pulling customers that would have never been customers for traditional solar. That's, that's how quickly, that's that's why this industry, that's why it grew so quickly in Europe, and that's why it's going to grow very similar. In the United States,

Nico Johnson  50:01

do you think if installers listen to this conversation, they should think of plug-in solar as competition?

Stephan Scherer  50:07

No, absolutely not. No, it's just a new category they can sell. That's it's just again, there's no one stopping you as an installer from selling plug-in solar systems. We work with installers, we work with other companies that are already in your home, so to speak, whether it's a roofing company or a siding company, or whatever. All of these companies can load a few systems in the truck and say, "Hey, I've got another cool add-on to you for you.

Nico Johnson  50:36

Yeah, it's interesting. I think it's a few, maybe about a decade ago, we did. Yeah, it was really early on with Sun with SunCast, but I did a webinar with Solar Edge specifically about how a few of their installers in Utah, I want to say, or Nevada, were using electric vehicles as a vector for finding homeowners, and the electricians would simply scour the neighborhoods, not selling solar, but selling EV chargers, and they would upsell solar from the EV, from the perspective now that you've got an EV charger, you've clearly thought about electrification, have you thought about how you're going to offset that load, and it became the number one sales tool for a few of these electrical installers in the Western United States, and I think about that in the context of plug-in solar. This is a product where, if you think about traditional sort of sales theory, you have ladders of products. Very few residential solar installers actually have kind of product categories, much less have an option for anything other than getting up and walking away when the homeowner says no, this doesn't really work for me. They don't have a down sell option, right? And I see this as a way for a sales person, for example, to say, oh, okay, so you're not actually interested, or you can't get financed for this five kilowatt or seven kilowatt system before I walk away, here's an option that maybe will work for you, and I can come back in a year, and we can see how it's going. We need an industry that is multi-product focused and long-term focused on the benefit of the customer. We've, I think, for the past decade, become an industry that's only focused on what can we sell as a finance product that allows you know hundreds of systems to be installed, mobilizing crews and demobilizing crews. To your point, it's very complex. The number of installers that have gone bankrupt in the last five years trying to follow that model and chase that carrot is staggering.

Stephan Scherer  52:39

Correct. And what happens is, you get, you get these humongous installers that dominate the market, and every now and then, you know, gets them too, and then suddenly your share of the luck, you've got a solar system that was installed by a company that doesn't exist anymore, you know, where does it end the troubles, whereas with plug-in solar, you know, you'd first of all, you never spend that much money, so you're not out 3040, 5060, grand, you're out, maybe, you know,

Nico Johnson  53:11

yeah, there's cheap

Stephan Scherer  53:11

assistance fire

Nico Johnson  53:13

remorse,

Stephan Scherer  53:14

yeah, exactly, second of all, you know, maybe a solar panel goes, goes, goes bad, it happens, you know, it can happen. Sure, if hydro, yeah, it is the place. Exactly, things do break, like we're not saying things cannot break, we're saying they are inherently safe.

Nico Johnson  53:32

Yeah, great

Stephan Scherer  53:33

solar panel might break, you can't get the same one from the same supplier, doesn't matter, get a different solar panel works just as well, right. Let's

Nico Johnson  53:42

talk about that specific customer for a second. Homeowner, they want solar, they're interested, but they either don't qualify for financing, they don't want to finance the product, but simply don't want customer driven project. Maybe they're still not bought in on the idea that they would want to cover their rooftop with solar, but they are interested and intrigued. How big do you think that population actually is in the United States? The

Stephan Scherer  54:03

total market that's available is probably around 32 million households. Wow, I think 32 million, that would be my, my estimate. Well, that's based off calculations that we did in turn. I would hope

Nico Johnson  54:15

that you've done calculations. Yeah, you've got any vested interest.

Stephan Scherer  54:19

Absolutely, no, that's that would be the total addressable market, essentially.

Nico Johnson  54:24

Do you, do you think that the traditional solar industry underestimates how many few people fall into that bucket underestimating?

Stephan Scherer  54:30

Absolutely, I think for traditional solar industry that number would be a lot smaller. We only have about 5% of household private households that have solar installed right now,

Nico Johnson  54:40

right?

Stephan Scherer  54:41

That is, that is nothing compared to other countries on this planet that have, you know, 19 20% of households totally sold are installed.

Nico Johnson  54:49

I see you transitioning how many have been installed in the US, all total. Yeah,

Stephan Scherer  54:53

it's our goal to kind of close that gap. We want a maximum, we want a maximum of households that can install solar two. Stole solar, and not just because we want to sell systems, it's because it alleviates the grid.

Nico Johnson  55:06

Yeah,

Stephan Scherer  55:06

it's beneficial to an aging grid. And let's be honest, the United States does have an aging grid. And before investing billions and billions of dollars in trying to get that up to date, why not invest more in distributed energy resources, DRs?

Nico Johnson  55:20

Yeah,

Stephan Scherer  55:21

it's the smarter thing, and you're helping people on the ground, you're helping them at their home.

Nico Johnson  55:26

Is Crafts from and products like it eventually going to be able to deliver additional value to the homeowner and to the grid?

Stephan Scherer  55:38

Absolutely, regulations don't exist for that yet, but we're working on technology that will be able to support the grid, right, and that's where utilities typically purchase these services from other companies to stabilize the grid, that can also be done with, you know, in a city, 10s of 1000s of micro inverters installed for plug and solar systems. If there's a connection between the utility and these systems, then that can be that service that can actually help the grid, that can help the utilities. All we need for that is essentially the proper regulation, the proper standards to be developed, and we're not there yet, unfortunately, but that's I think that's going to be the future, that's where this industry is going to go. Now, imagine not just solar inverters, but batteries in the background, right now, that's still in the stars, because we're limited to a single kilowatt hour in livable spaces, unfortunately, we're, you know, something that we, we might want to work on, because I don't see the benefit of limiting capacity in this instance, where if every household can have five six kilowatt hours, that would be like the economic best point for the optimization point for plug-in solar system with batteries.

Nico Johnson  57:06

So, something that struck me through this conversation is we started talking about plug-in solar, but the more we talk, the less it feels like this is a conversation about solar panels. Feels more like a conversation about access to energy, to savings, to participants who are otherwise not available in the market, so let's zoom out a bit. You witnessed Germany go from a niche market to millions of systems installed. What do you think the biggest lesson Americans misunderstand about how that happened?

Stephan Scherer  57:34

What proves us and the consumer in countries like Germany right is that, as you said, there's over 4 million systems installed because of the because of the utilities and the interconnection process that was required in the beginning, or the registration process that was required in the beginning. Only 1 million of those systems are actually registered. We only know that we produce that, but the more are installed because we, as an industry association, know how much we sold, so there is a discrepancy of about almost 4 million systems in Germany alone that were never registered with the utility, because of that mistrust, and yet there still haven't been any negative effects seen in the grid to a certain degree, of course, the German grid is very safe and very well developed, but at the same time I think it is very - it's a general concept that electricity needs to be respected. It is something that can be very dangerous, and people do take this seriously, and we know this because we talk to these customers every almost every single customer that purchases from us first goes through us, so we can educate them about the risks, what it does do, what it doesn't do, how it can help them, and what size they might need. But you, you do want to trust the customer in general, because you're always going to have bad apples. You can regulate this to the ground, and you're still going to have a few bad apples that will cause issues, but for the most part, those 5 million systems, there hasn't been a single incident. The only incidents that we know of are where there's someone tinkered with the system, they might have opened something up, or they might have installed way too much on a single circuit, you know, stuff that's clearly not in the manual, and only in those instances were there ever any sort of repercussions, and it's not even that the utility is monitoring this, they're not in Germany, it grew way too fast, it grew way beyond their grasp, essentially, so it's not like, oh, the Germans are so much better than us. No, not at all. The building standards are fine, but not everyone lists, not everyone builds according to those building standards. Same as in the US, the risk profile is very similar, so if we. Related to just the 120 volt system that we have in the states, I believe people are are smart and they respect electricity and they want to listen to us as a manufacturer and they want to listen to the regulators and do what is safe. If you look at diesel gen sets, I mean, how many people have been killed by diesel gen sets way too many, not a single one from a solo and micro inverter, mind you, but diesel gen sets, yeah, they're, and they're not regulated at all at this point. So, as an industry, I can say that we're very safe, and we take care of our customers, we educate them, and we're really there for them, and at the same time you know it's affordable, it's cheap, it's a cool technology that not only grows with you and your household, but it moves with your household.

Nico Johnson  1:00:49

Yeah, so it's not a structure,

Stephan Scherer  1:00:51

right? Yeah, because it's portable, it doesn't generally fall under any sort of regulations with regards to building permits,

Nico Johnson  1:00:59

right,

Stephan Scherer  1:01:00

unless you're screwing it onto your roof, then

Nico Johnson  1:01:03

in the same way that when I move to my next home, I'm probably going to take my refrigerator, I'm probably going to take, I'm almost certainly going to take my washer and dryer, as I did in my past move. One of the things I keep coming back to from your Germany experience is the role that retailers played. Most people, frankly, can't name a solar company. My parents can't. Your neighbors in Texas probably can't, but they know Aldi, even here in the US. They know Costco, they know Home Depot. That's where they buy the things that break in their home that they need to replace. That's where they buy their appliances. So I'm curious, how much of Germany's success, and therefore how much of the United States' success is actually about putting solar in places that people already trust and buy.

Stephan Scherer  1:01:50

Oh, it's a huge factor in this. Our products were in those markets very early on, honestly. As a startup, especially back then, like, there's no way you have, you can have that reach, but you want, you want to disseminate the technology, you want to disseminate the idea behind it. So it's, it's a natural progression in the market that if it's an appliance, it'll be sold as an appliance, it'll be sold as an appliance, and on with online retailers, it'll be sold as an appliance physically in the shop, so you can pick it up, and you know, at Costco, on the way out, pick up a solar system, install it, and have it run in a few hours.

Nico Johnson  1:02:27

Yeah,

Stephan Scherer  1:02:27

that's that's the idea, and that's how you, that's how you really make it a benefit, and for the, for anyone, really, that's how we democratize a technology is by putting it in front of everyone, and making it easy to purchase, and easy to install, and, like I said, it's essentially an appliance that's how we need to treat it, that's how we need to regulate it. Any appliance that uses a lot of electricity, whether it's a hair dryer, a toaster, a microwave oven order, has risks associated. Doesn't mean that we shouldn't, that we should stop using them. No, but we've educated ourselves, we understand a microwave can be very dangerous. You close it up before you hit start, and you make sure that the window is not broken, right?

Nico Johnson  1:03:08

Yeah,

Stephan Scherer  1:03:09

or a hair dryer, you don't dry your hair, not that I would know, but not you would not dry your hair in the bathtub, right? Because you know that's very, very dangerous. So I would say, trust the user, trust the consumer, and let it be the appliance, the help that it can be in in a growing market, in an aging market.

Nico Johnson  1:03:32

I'd like to sort of bring the conversation full circle and think about the sort of the inevitability of this year in the United States. You've seen this category develop in other parts of the world, and you're helping build it here in the US. What do you think people are most focused on today that you think maybe won't matter very much in five years?

Stephan Scherer  1:03:50

No, what I think people get wrong about this is that, especially on the regulatory side, people are talking way too much about what are the max capacities that we should allow, you know, what, which direction should this go? Do we need special plus or anything in five years? No one's going to talk about this, right? In five years, everyone's going to try and maximize this, because people are going to be aware. Okay, I can do this. I can do this up to what the NEC allows me to, and they'll adapt, and that's the beauty again with these systems. When you also have a power meter installed, they do adapt to, they adapt their needs also. So that's what I meant when I said that. How you had this dual effect, that dual effect makes a difference on the entire grid, essentially how people use power. So I think in five years we'll have seen the effect, that educational effect of that technology, and how people adapt design thinking, and most people will only be able to install certain size system because they don't have more fence space, or they don't, or they literally have a balcony, they want to put a balcony, they only have so much balcony, right, but we're still gonna see. Are people adopting it, even at the smallest size, at the largest size? Right now, I know people are installing 200 watt systems, as small as 200 watt, and you know, say, what is the difference? Yeah, it makes a difference for that consumer, it makes a difference for that household, and that's what we need to think about, what the difference it makes for those people, not so much what the regulators think might be appropriate, and that's I think what we're going to learn in five years.

Nico Johnson  1:05:28

Yeah, and if we're in that five years, seeing that the category has truly arrived in the US, what are the signals that you'll be watching for to know that it has to come to fruition, the

Stephan Scherer  1:05:38

way it is being treated, the way the technology is being treated, and as we discussed, where it's being sold, that makes a huge difference. The point of sale right now, it's a pure direct to consumer off the website product. We have basically no resellers with space, the physical space to showcase these. We tried that in the beginning didn't really work, was too early, right? And that's that's how I know. Once it's at Home Depot, once it's at Costco, then we know, okay, market acceptance is here. Essentially, that will be the clearest sign, apart from sales numbers directly, but also you'll see people more and more on social media presenting their, their solar systems, that that is an effect, because it has such a positive effect. People tend to really fall in love with the technology and showcase it.

Nico Johnson  1:06:34

Yeah, they want to brag about it.

Stephan Scherer  1:06:35

I love it. Yeah, we get, we get photos sent to us without asking, saying, "Hey, what do you think of our map? What do you think of my system?

Nico Johnson  1:06:42

Yeah, that's beautiful,

Stephan Scherer  1:06:43

and it's what we love to see, and it's still even if you're not a true DIY wire, and you can program everything yourself, and you're buying one of our systems, which are really ready-made with all components included, still people find a way to put their touch on it, whether it's on the mounting system, it's very interesting to see no two systems alike, even at the same size.

Nico Johnson  1:07:08

What gives you the most confidence that America is going to get there, just like Germany did?

Stephan Scherer  1:07:12

That Germany did it. People tend to think, oh, we're so different and such a different market. No, electricity is such a basic need, right. right, that we're very, very similar when it comes to that. You want autonomy, you want your freedom, you want your freedom at home. That electricity is part of that. There's no way to survive these days with electricity, whether it's the fridge or your kids murdering because the TV's off. People need electricity, and they need affordable electricity. This is a simple way of guaranteeing that

Nico Johnson  1:07:43

if folks are so inclined, they found this conversation interesting, and they want to reach out. Where do you like to be found? How can folks connect with you?

Stephan Scherer  1:07:50

I'm on LinkedIn, you can always find me there. I'm trying to be more active these days, so just shoot me a line if you're interested. If you just want to, you know, talk about the technology, talk about the regulations. What you think the next trend should be. Happy to talk about everything. Also, happy to get positive, you know, constructive feedback. If you don't want to find me on LinkedIn, then you can always reach me via our Canada contact form on www.craftstrom.com/contact

Nico Johnson  1:08:19

It's craftstrom.com It's

Stephan Scherer  1:08:21

craftstrom.com Yeah, yeah. In any, in case anyone asks, or it was, it was a long night, German beers, and we thought it was super smart. And crafts from craft storm is is the German word for high voltage power, and we just exchanged that first K with a C. We thought it was terrible, terrible smart, but

Nico Johnson  1:08:44

terribly clever. Well, Stefan, thank you for taking time out of your busy schedule. And I look forward to how this all unfolds, and seeing Craftstorm help revolutionize and raise a US plug-in solar market, just like you did in Europe.

Stephan Scherer  1:09:01

Thank you very much. It was an absolute pleasure.

Nico Johnson  1:09:04

Well, solar warrior, that's a wrap on today's conversation with Stephan Scherer of Craftstrom. What I found most interesting wasn't any particular product or policy debate, it's the realization that Germany's balcony solar success - it didn't come from a breakthrough technology, it happened because an entire ecosystem, regulators, utilities, retailers, and consumers gradually made solar simpler to buy, to understand, more accessible, and with companies like Craft Sum, frankly more beautiful. Whether plug-in solar ultimately becomes a niche product, bridge product, or mainstream consumer appliance in United States remains to be seen, but one thing feels increasingly clear. The question is no longer whether people want more control over their energy. Question is, how simple we're willing to make it. Quote, I'd love to hear your take. Is plug and solar a meaningful part of America's energy future, or is it destined to remain a niche solution? Will it actually help us? Transition to solar truly being an appliance you can simply buy at Costco. Let Stefan and I know over on LinkedIn. Thank you again to us who made it all the way through this episode, and thanks to our sponsors who helped make this episode possible. They pay the bills, so all you have to pay is attention. I am so grateful that you have done that today. Remember, you are what you listen to. Thanks again for showing up, Solar Warrior. It's half the battle.

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