Ari Matusiak  00:00

The fastest speed to power solution next to that jet engine turbine is someone's house, because you can get that done in a week,

Nico Johnson  00:08

in a day.

Ari Matusiak  00:08

Yeah, in a day, whereas you know the power plant's going to take five years.

Nico Johnson  00:12

Right. Welcome back to SunCast. I'm your host Nico, and it is my sincere pleasure to bring today's guest on this show. Someone I've been looking forward to meeting and interviewing, bringing a conversation full circle with you all for many years now. Ari Matusiak is the founder and CEO of Rewiring America. That's probably a name and a company that many of you, as our listeners, already are familiar with. Perhaps you need no introduction. I'll give one for those who maybe this is the first time you're hearing Ari's name. It's just the latest chapter in Ari's career. However, when I mention Rewiring America, a career that has spanned affordable housing, healthcare reform, the White House, consumer finance, and now one of the most influential organizations, in my opinion, shaping how America thinks about this energy transition. We speak a lot about the energy transition here on SunCast in our now almost 950 episodes. The goal is to bring folks like Ari, founders, pioneers on the front lines of the energy transition, to your ears, to your attention, so that you can glean from them what you need to put in your toolkit as we build this clean energy future together. What stood out to me as I started thinking about this interview is not simply what Ari has built. It's there's a pattern behind the career progression. He seems drawn to problems that everyone else agrees are there; they exist, but nobody really owns them. Again and again, Ari and the teams he has built have helped reframe the problems in ways that bring together unlikely partners and unlock entirely new solutions. Today, we'll talk about electrification and households and data centers and the future of American energy, but we'll also seek to understand something deeper. How do these ideas actually become movements? If you're new here, you're in for a ride, and our always guarantee that you will get a return on your investment is probably doubly assured. I'd love if you would join me in welcoming Ari Matusiak to SunCast. Ari, good to see you.

Ari Matusiak  02:17

Thanks, Nico. Thanks so much for having me, and congratulations on number 950 or whatever the count is on your episodes, it's so such an accomplishment.

Nico Johnson  02:25

We keep climbing, keep climbing. It's one foot in front of the other, just like building any any endeavor. And I appreciate as a as a casual observer watching how what I consider the legacy that you've built also takes you know different forms and and yet endures over a decade plus. The big question that I am pondering here as we enter into this discussion is the pattern that I mentioned that's been following sort of your entire career. So as I look back across your career, it's striking that it doesn't look like it's really five different jobs for me. It looks like it's one long obsession, right? Affordable housing, the young invincibles, the White House, renovate America, and rewiring America. So we're starting to narrow in on a theme of America. I'm curious for you, what is the thread that you've been following all along?

Ari Matusiak  03:17

For me, the the core idea has been that in a in a country that is the most prosperous in the history of the world, and in in a country that is the most powerful in the history of the world, it shouldn't be that hard for everybody to win, and yet it's too often too hard for too many, and that has been, you know, in in many respects, just sort of like an animating driving idea and principle for me. In in in a way, like a driving question, right? Why why why is it that way, and how do we how do we sort of affect that outcome in a positive way? The

Nico Johnson  03:58

nature of and the concept of being a builder is one that is inherent. I feel for many who would call themselves entrepreneurs, and I know that you self-describe as a builder. I actually grew up in a household where my father is a contractor, very much like building the kind the homes that we are trying to electrify today. I'm curious for your for your definition. What does it actually mean to be a builder?

Ari Matusiak  04:23

Yeah, I well, you know, I think just coming back first to that sort of driving question, as it as it were. If you kind of start with that as like an animating as an animating idea, that it shouldn't be this hard. We should all be able to to win together, as opposed to having a dynamic where some people win like quite a lot and other people don't seem to ever have a chance to win at all. Then that gets to a set of questions that have to be answered about well, what would you do differently, and how would you bring people together toward creating a new a new. Reality and so for me, the building the sort of like at the core of building anything is an animating idea. You know, something that resonates for people, that is common sense, that they can see themselves in, and that they want to commit their time to. And then it is about creating effectively a way to bring people together so that they can pour in their talents, their passions, their perspective into that idea and into making it so. And so, ultimately, you know, sort of in a very simple way, what you're doing is creating a framework and sort of a foundation that allows people to come together. And if you do that well, then you get you know incredibly talented people who share an idea and are passionate about about an idea and want to make it so. And that's when you start actually building something. Because if you're just sort of like sitting by yourself in your you know basement or whatever, you can do something, but you you can't really create when it comes to at least the the question that I've been sort of obsessing about. You can't make it very far in answering that question or sort of solving it without without having a lot more people coming together.

Nico Johnson  06:17

Ari, you have a penchant for trying to wrap your hands around what many would consider to be big, messy problems, and I'm curious if over time you've developed maybe a filter or pattern matching for what needs to be true, what you're looking for before deciding that this is worth spending what will inevitably be years of my life on.

Ari Matusiak  06:40

I think at the core for me is that there needs to be there needs to be a driving idea that is situated in a basic concept of fairness, and that's not sort of per se political or politicized. It's just it's just kind of common sense, and and it doesn't need you don't need to go through giant leaps and bounds to make it make sense for somebody, and the way that that typically happens is because it touches on a basic concept of fairness. And my my one of my core beliefs is that we all share kind of a a basic understanding of what fairness means. We might then arrive at different places in terms of how to resolve it or address it or whatever the case might be, but you kind of know it when you see it, like from an early age, right? You know when somebody's not being treated well on the playground, or you know when something isn't going sort of in a way that it should be. We know it when we watch sports, and our team like absolutely deserve to get the call, and they did it, and that's because the ref is biased or something, you know. So like we all have this sort of basic idea, and so I think it starts there that you have to have this basic sort of an idea that's rooted in this this sort of core construct of of fairness, and then the sort of the solution on the other side of that needs to also be common sense. You're sort of addressing a thing that that should be addressed, and you have a solution that seems pretty straightforward for for that. That oftentimes means that the path to achieve it is hard, arduous, and not straightforward, because if it was easy to do, it already would have been done, as the saying goes. But I look for I look for that sort of connection point between the sort of like core construct of fairness and then the sort of like a common sense idea on the other side. And then I'll just say, in terms of how it works for me personally, I have a very consistent experience of this, where when I know I'm going to start something new, and that usually involves getting like very nauseous. Where it's almost like it's like it's not. It doesn't start with a ton of excitement. It starts with like a fair amount of dread, and then and then I know that that's what's going to happen. That's the path I'm going to be on because I've like basically resolved for myself, and my body has already internalized that we're going to be doing this thing, I guess. And then that's what that's what tends to happen next.

Nico Johnson  09:17

When you think back on the early challenges that you tackled was any one of them more instructive of either an understanding of what you were meant to be doing or like the core motivation you had. Was there any one where you're just like, oh, this actually kind of feels more like a calling? I'm both good at this, and people need this as a this result that I can achieve,

Ari Matusiak  09:42

you know, boiling down to this is sort of hard in a way, but but I will say an experience I had early in my career in Rhode Island was very formative for me. I grew up in Wisconsin. I went to college in Rhode Island. I then stayed in in the state for a number of years. And a part of that was going to work at a community foundation, a very large community foundation that provided a bunch of funding to a variety of issues, you know, to support basically the collective well-being of the state. And just to kind of tell that story all the way through, I went to interview for a job at this foundation not because I had some sort of animating passion about it, but because a woman that I had worked with and and really adored and revered, she had gone there and she said, "Oh, there's a job opening here. Maybe you want to apply. And I said, "Sure. And so I went in for my job interview, and I was a little sort of disconnected from it, but then I sat with this group of people who all were leaders at the at the foundation, and they were so rooted in the community and the dynamics across communities in the state, and so versed in what was going on for people, and so focused on how to allocate resources to make people's lives better, that it was super inspiring and very and very intimidating. Like I remember this guy asked me what my favorite restaurant was in South Providence, which was basically like a test to see if I went to that side of town, and you know, and I didn't have a favorite restaurant in South Providence because I hadn't really thought about I hadn't really thought about Rhode Island as my community. I was just living there, but it became my community when through that work, and then as a part of that, the defining sort of experience for me was realizing that there was a pretty significant crisis, which of course we're still living through today-the lack of affordable housing in in in this case in Rhode Island-and it was causing outflows of people because they couldn't afford to live there, and so you know, working in middle-class families were leaving the state, and the trend line was was that, and so state leaders were talking about economic competitiveness and what would happen, and people were upset about about the lack of choice in terms of in terms of places to live, and families were having too hard of a time making ends meet, and this was sort of like a systemic problem, and so the obvious answer was, well, you should build more housing, but how do you go about doing that? And so we started looking at this, and I and others realized that what was happening in part was that the state was not investing a single dollar in affordable housing production, and because they weren't investing a single dollar in affordable housing production, they were leaving something like seven or $8 on the table in what would have come in from Washington or other sources. Like they were basically making a very bad investment decision by not making any investments, and so that seems like pretty straightforward. Okay, we can if we if the state puts in some money, it gets a lot more money back. Plus, it addresses this issue that is of top concern for everyone. And so, so one way to think about it was that this foundation, which had a lot of money, could just invest some dollars into organizations and sort of say let's see what happens, but we decided to take a very different approach. We said you know what we're actually going to be we're going to convene this conversation across stakeholders and we are going to make something happen directly. And I ended up sort of getting you know, in a way, like found myself organizing a bunch of people who were experts in this field to try to make something happen.

Ari Matusiak  13:49

And the thing that I realized, that I became very convinced of, and that I realized was that I could be helpful in doing, was that we needed to bring a very large coalition of stakeholders together. Like it couldn't just be a bunch of housing advocates who have always been advocating for housing. Yeah, that you needed large employers. You should have faith-based groups, neighborhood groups. You know, universities. Like the whole tapestry of the community should come together to address what is a shared issue?

Nico Johnson  14:22

Yeah,

Ari Matusiak  14:22

and and we did that. We put together a coalition of some 300 organizations that was from Bank of America and the universities to the Catholic diocese and the you know and like a neighborhood association in this part of town or whatever. And the basic idea was, you know, what we need to have one ask that we are going to make, and and the crazy thing in the state and in the in Rhode Island was that in order to get a new spending from the state onto you know codified, it needed to be. Voted on by the voters, but in order for that to happen, it needed to go through the legislature and be put on the ballot. So you had to go through this serpentine process to even get the resources in hand.

Nico Johnson  15:12

Yeah,

Ari Matusiak  15:13

and we ended up in a dynamic where we and I remember this so vividly. There was a a whole effort to get a casino built in the in the state.

Nico Johnson  15:24

Yeah,

Ari Matusiak  15:25

it was very well backed by a bunch of money, and they had this tagline that said, "Let the voters decide, and that was they had billboards all over the place. I love

Nico Johnson  15:35

it. And

Ari Matusiak  15:35

then we were going up to meet with the power brokers at the state legislature, and they were sort of hiding behind the fact that there wasn't time, or there was this issue, or there was this other issue, and and finally it started becoming clear that they were going to stonewall us and run out the clock, and we weren't going to get an opportunity. And so I had done one smart thing in this process, which was when we got this coalition together, everyone signed basically an agreement that said we could act in their name.

Nico Johnson  16:08

Oh, sweet! And so

Ari Matusiak  16:10

I sort of very impulsively took out a full page ad in the paper that was like a thing back then that had the every all 300 organizations and companies and whatever in our coalition all listed out with like an open letter that said in huge letters, "Let the voters decide.

Nico Johnson  16:29

Nice,

Ari Matusiak  16:29

and it became sort of an. So anyway, we won. It became, and I still have, and I'll just pull this out.

Nico Johnson  16:36

I love that you've got it right there. I still have

Ari Matusiak  16:37

this framed on my desk. This is the vote tally on the election night that somebody gave me, and the like campaign we ran. We won with 66% of the vote, and every every town in the state like carried.

Nico Johnson  16:51

Yeah,

Ari Matusiak  16:52

and the basic idea was, you know, we we had created synergy across a broad coalition of people around an idea, and had gotten enough momentum so that it unlocked sort of the possibility. And to this day, the this is like a bond sort of like program or whatever. To this day, it is it is now funded. Has been funded every single time since its passage, like all those years ago, and you know it's been good for the state.

Nico Johnson  17:27

That's amazing. It was it was a bond that has been it

Ari Matusiak  17:31

manifested as a bond, and then yes, and that's been renewed. That's amazing.

Nico Johnson  17:35

What a cool

Ari Matusiak  17:36

story to now of like you know over a billion dollars of investment in housing in the state,

Nico Johnson  17:42

I'm curious your entrepreneurial instincts even back then. If I can pull a few threads, thank you for that story. That was fascinating. Did you have mentors in your life early on? Even if you didn't acknowledge then that they were mentoring you, but you sort of look back now and you're like, oh, right, they actually were sort of dropping hints here and there, or giving me guidance and direction, because something that occurs to me is like straight out of college-ish. You had wherewithal, and I'm curious where the data came from to be able to have a cogent argument about a specific dollar invested for a specific return on that. And where did that come from?

Ari Matusiak  18:18

Well, the thing the I've had I've had multiple mentors over my career, and I think what what's important about what what's important about that chapter and that story is that I you know I I wasn't coming in with the you know I've been in my office crunching the numbers and this is what it has to be because I wasn't an expert in housing,

Nico Johnson  18:44

right?

Ari Matusiak  18:45

But the but the foundation had invested for a very long time in in an ecosystem of people who were experts in housing, who had committed their careers to it, had done incredible work,

Nico Johnson  18:56

yeah,

Ari Matusiak  18:57

and who were themselves raising up kind of what the data were. They were the they were the sources of the data and were the sort of experts on the market.

Nico Johnson  19:06

Makes sense.

Ari Matusiak  19:06

But the thing that they didn't have was they didn't have the same opportunity for breath that we did because they were in their sector working their issue and very importantly making progress against it in a really hard environment for a long period of time, and what I realized was there's a real power you need that. If you don't have that, you don't really have anything. If you don't have people that are doing that work and driving a set of issues and sort of connected to the communities in a very robust and deep way, but but if they don't have kind of like a breadth of support for the set of things that they are working on, then they then too often those very important ideas. End up getting like pushed down and become sort of like second and third tier in political importance. Right, and what I basically recognized in the process was that just by just by the fact of where I was working, which was this institution that was very old, very large, that wasn't itself running for office. That had sort of a natural, sort of gravitational, like was a natural center of gravity that we could organize activity from there in a way that would be generative. And then, and then what had to happen? So I recognized that, but you know, I had to be supported and encouraged in that, and I had people who were doing that, and we created like really deep partnerships with other with other important institutions, and they became, you know, they became sort of like our fellow travelers in that, without whom it would not have worked.

Nico Johnson  21:01

Yeah, it's so interesting. Thank you for sharing that. And trying to think about some correlations that come to mind for me. And I mean, a lot of folks at some point or other ask for maybe advice or guidance or sort of insight into career path. There's a lot of folks that listen that are young. They're either first or second career sort of shift and thinking about getting into clean energy, and I always say, but in a different way. And now I'm going to use your words: find an organization with a center of gravity. Now, in the energy sector, that can most likely look like a big developer or a big EPC or a utility, because you got to understand how the power sector works. And the it reminds me of the story of Andy Tang, who decided he was going to go work at PG&E, and he ended up starting a few really strong initiatives inside of PG&E in much the same way that you describe, just through a different lens, right? Just working at a public utility, an investor-owned utility. So I want to actually use that as a way to transfer the thought process to the macro level of this concept that you have advocated for equity in access, primarily for households. The way the energy sector has been designed, it does not always put households first, and yet at Rewiring America, that is your your motto theme, the mandate. Can you talk about that narrative and why it is such a radical statement, especially with regards to the way we think about energy?

Ari Matusiak  22:32

If you sort of like to trace back to the beginning part of this conversation about the sort of the clarity of an idea and the common sense of a solution, I think that creates a space to basically create your own center of gravity,

Nico Johnson  22:46

right?

Ari Matusiak  22:47

And in a way, Rewiring America is an example of this because it wasn't like Rewiring America was some institution. We started it in the summer of 2020, and it was based on an idea, you know, and and the idea actually was first that we need to move the energy conversation from the supply side to the demand side. You know that we were too focused on large scale infrastructure generation projects as the sort of from a climate perspective as the mechanism by which we were going to address emissions, but my co-founder Saul Griffith had gotten a grant from the Department of Energy in 2016, and he, as as a part of that, had mapped the energy flows in the economy in the U.S. economy from the supply side to the demand side to 0.1 percent granularity. So there's this Sankey diagram for the energy system, which has like starts with the sources and goes to the uses, and it's sort of like five things over here and five things over there, over here. And what Saul did was he mapped it down to this like hyper granular level. He made like a shower curtain for that. If you wanted to get your like super Sankey diagram, which is what he called it as a shower curtain, so that you could study it while you were you know getting your while you were cleaning so dirty. But but but the but the upshot of that was like when you did the trace lines, and there were many many trace lines down to that level of granularity, you saw that 42% of energy-related emissions come from a set of kitchen table decisions: how we heat the air and water in our homes, how we cook our food, how we dry our clothes, what kind of cars we drive, and where the like power comes from for those things. So we we started off saying we're going to move to the demand side, and when you move to the demand side, you find yourself at the kitchen table. And when you find yourself at the kitchen table, you see that 42% of energy-related emissions are tied to these decisions. That's a billion machines across 151 million households. That's clear. Let's just go make all of those electric. Yeah. So that was the the. First sort of chapter for us at Rewiring, which was electrify everything. Start at the households; they get the benefit of the bargain because if you electrify those machines, they save a bunch of money. The community gets the benefit of the bargain because a bunch of jobs get created that can't be automated or offshored, and the society gets the benefit of the bargain because you're basically doing a wealth transfer from energy producers to energy consumers. So that's sort of like thing one. But then thing two is to recognize that you know effectively what's going on in the equation today, which is that at the kitchen table, the relationship of the household to energy is as a passive consumer and bill payer. So I open my envelope every month from the utility, and I find out what I used, and I find out how much I owe, and that's it, right? And like, and I'm and on and on my bill, I'm paying for things that are upstream, like I'm paying for a new generation facility that's being built. I'm paying for transmission infrastructure. I'm paying for like the poles and the new substation that's down the block from my house. Like I'm paying for all that stuff. You know, you are too. We're all paying for it together, it's a socialized sort of expense. But I'm paying for it. I'm paying for the electrons that I use or the gas that I use, and you know, I send my I send my payment to this place, and that and that is actually made sense for a long time because you know what else would you do? But but now when you think about where technology is and where and and and what the grid needs, we need to we need to move to a different construct. And so the second thing is to understand not just move from the supply side to the demand side in the conversation, but to understand the household not as a passive consumer, but as energy infrastructure.

Ari Matusiak  27:06

And once you say that, if you say that the household is energy infrastructure, and you and you and you're not just saying it because it sounds clever, but you're actually serious about it as a thing to go do, it actually changes the entire equation of how you set up the investment sort of profile of of the energy system. Because now what you're saying is, oh, actually that those kitchen table decisions about the you know if you're going to get a heat pump or a battery or solar panels or an EV, etc. Those things actually have massive bearing in aggregate on the capacity, efficiency, and performance and cost of the energy system that we all depend on.

Nico Johnson  27:56

Right,

Ari Matusiak  27:57

and so the thing that we are focused on now is not just on the value prop for the household of getting better electric stuff that honestly costs a lot less to run and saves them money on their bills, and you're not lighting things on fire in your house, which is also a co-benefit. But actually, that those machines are yes, you are they are yours, but they are they should be understood as infrastructure too, which means that the grid and sort of like the people who depend on it could be investing directly in those assets in your home because they are serving the broader whole.

Nico Johnson  28:38

Yeah, the the evolution of the grid to distribute energy resources-the fancy term that we as interested use for resources at the edge of the grid that can feed back to the grid, provide support and ancillary services to the grid-it's a revolutionary concept, especially if you work inside the utility. There's the there's the theoretical and one of one of the things I love about rewiring is that you work on both the theoretical, which is in my mind like really this is the concept that we need to be pushing. That's the messaging and that's a lot of what we've been talking about for the last 20 minutes. But then there's the practical, which is are these devices ready yet? How do you think about both sides of that equation? Where on the one part, I think you guys do a tremendous job being the mouthpiece for an industry that needs to exist, and saying the VPP-we'll just take VPPs-but like the the grid edge can come alive. It can support the grid in ways it never did before, to the benefit of the households and to the benefit of the grid. Without all this extra infrastructure, you've come up with numbers like in the trillions that we could avoid in costs. How do we get the utilities around the curve? Like, what does it? What what's the other side of that coin look like for rewiring to make sure that the infrastructure is ready for that conversation?

Ari Matusiak  29:57

Yeah. Well. Well, first, let's talk about. Maybe the, for lack of a better term, sort of the political economy of where we are today.

Nico Johnson  30:06

Sure, because

Ari Matusiak  30:07

I think I think the the other the other big difference between when we started rewiring in the summer of 2020 and today is that when we started rewiring, basically demand on the grid was flat and had been flat for 25 years or whatever the case might be, and there are a lot of reasons why it was flat. But effectively, and you could say, and you could say, oh, the grid wasn't being optimized then, or it was an inefficient machine in and of itself, and that those things would be true. But it was more or less in a state of equilibrium.

Nico Johnson  30:42

Right

Ari Matusiak  30:42

now, that's not the case. Right, you have massive load growth that is happening. It is a secular trend, and then you have this affordability concern and sort of spiking reality where bills are going up. They're going up faster, and they're going up by a lot,

Nico Johnson  31:00

right?

Ari Matusiak  31:01

And some in some places around the country. By the way, the energy bill rivals the mortgage in terms of its size on a monthly payment.

Nico Johnson  31:08

Amazing!

Ari Matusiak  31:09

This is not a so so we are now in a place where utilities, large power customers, for instance, AI tech companies, regulators, elected officials, and constituents, or ratepayers, or households-they all know that this thing is not working, right? And so, and they all have pressure that are that that is creating, and a lot of it is because the the last group, the ratepayers, the households, are on the are bearing the brunt of this, and you're starting to see kind of a veritable kind of explosion of activity around the country of people saying, "Fix this! Like we are not doing this anymore, and so I think that is an important setup point because the the sort of the the political economy of today is creating kind of a requirement that there be different solutions, and and you you are not just going to continue rate basing giant infrastructure projects and getting yourself out of this problem because the costs of those projects are themselves very high. Yeah, the time to delivery is very long. There are other sort of sort of other considerations that are playing out as well. So you have to then expand the aperture to think about the grid as a whole.

Nico Johnson  32:38

Yeah,

Ari Matusiak  32:38

which means going all the way down to effectively assets behind the meter, and then all the way back up to these sort of like big generation infrastructure projects on the other side. And once you expand the aperture, it's a different decisional matrix and a different sort of way to look at the problem. But you have more choices too, right? You have more options available to you than you did historically, and and I I think what we are sort of seeing is that utilities and all all of these stakeholders are basically looking for ways to actualize that now, and a go forward basis. Our belief is that this isn't some sort of rounding error kind of exercise, and we're going to have a pilot program over here and a little effort over here. That this has that that is now time for it to become sort of central to the overall planning of the system itself. But it starts with this sort of accepting the premise that the household is actually energy infrastructure, that it's not, it's not, it is not sort of like a passive consumer at the end of the line.

Nico Johnson  33:52

At the utility level, you mentioned we've been in a state of equilibrium with demand, but in many ways, because the utility business model is to have these planning cycles and IRPs that are 510, years long. It's a planned equilibrium. It's we expect this much growth. We're going to plan for this much generation, and we've in many ways gotten caught in a situation on our heels where we simply didn't expect this much growth, possibly for the first time. Well, definitely for the first time in generations, and that notwithstanding, I think there are a lot of folks that have coalesced around kind of ways that we can address this. I'm I'm curious. I was just listening to Secretary Granholm on a podcast, and the speak the talking points are in some ways similar. We just published an episode with Molly Bausch at Accenture. In some ways, like her approach with Accenture and and grid alternatives and that program are similar talking points. Where then, from the regulatory utility, maybe even state level aspect, is the bellwether of what's possible? Who's doing it? And what is that starting to look like?

Ari Matusiak  35:02

I think you're seeing pockets of innovation around the country. You know, Google and Xcel Energy announced a deal not that long ago. Google and Voltus announced a deal for 100 megawatts of distributed capacity and in the PJM market. You know, you have, I think, a really interesting regulatory and policy frameworks emerging in places like Virginia. There is a very robust data center bill that Governor Sherrill has advanced in New Jersey. You know, there, there's, there's really good policy making that's happening right now in Illinois. You know, there's just sort of like examples of this all across the board, and I'm and I'm sort of unfairly leaving out raft of other examples. But just to say that there are there are examples all over the place.

Nico Johnson  35:54

Of course,

Ari Matusiak  35:55

I think what you don't yet have is a convergent market model, and we are, I would say sort of two to three years away from that, and I think the and I think there is a really, I keep coming back to this idea of the household as energy infrastructure because it is not how people think, even in the in even in the like frankly even in the VPP space.

Nico Johnson  36:18

I was saying that's the nature of why I asked the question earlier-it's such a radical statement. If you understand how the industry works, so yeah, yeah, keep that.

Ari Matusiak  36:25

Well, and I and I think there's um like so maybe I'm sure we'll talk more about data centers as a part of this. But if the household is energy infrastructure, then what you are doing is you are saying, okay, I need capacity for whatever it is I'm building for my large load, as the term as the term of art is in the industry, and I need I need you know whatever the number is 100 megawatts, 200 megawatts, 500 megawatts, a gigawatt. You know these numbers can get really big really fast, and and and if I and and if that's my what I need and and right now there's sort of like because of all the political dynamics there's this idea of well you large load customer need to bring your own power bring your own power bring your own capacity et cetera these are frameworks that are being put out

Nico Johnson  37:19

yeah

Ari Matusiak  37:19

and for the and for many of the elected officials, that is a very good thing to say when you are faced with spiking prices. Right. Well, don't make us work. That's right. Yeah. You know what we're going to do? We're going to make them pay for it. the The problem, though, with that sort of idea or the limitation of that idea, I mean, it's a good idea, but the limitation with that idea is that it doesn't have any direction of travel to sort of like an end investment. It just says bring your own power. So the like most dystopic version of this are people literally using jet engine turbines to power their data centers, and you know which I'm pretty sure are neither clean nor quiet, but

Nico Johnson  38:01

nor very nor is more easily fueled in the current economic environment, right? And so, but

Ari Matusiak  38:05

that's that's one version of bringing your own power. Yeah.

Ari Matusiak  38:08

But if you said if you said you know what, actually, the we're going to further say that in the bringing your own power, you have to invest in households as energy infrastructure? Yeah. Well, then, then the consequence of that sort of like joining those two things together is you would say you whatever you were paying for the power over there, you would pay the same price for the power in people's the capacity created by investing in people's homes. Yeah. And why is that important? Because, and I'm like, just use like very rough numbers. If I'm paying for procuring new power, I might pay $3,000 a kilowatt for like a gas turbine sort of system. Yeah, and just like use that as like a very rough ballpark number. I'm sure there are lots of there's lots of variability.

Nico Johnson  39:05

Nerds listening, don't turn on your economic brain right now. We're trying to get to a model you can listen to.

Ari Matusiak  39:11

Yeah. So let's say let's say it's let's just say for sake of argument, it's $3,000 a kilowatt. Now you say okay, I am going to take that $3,000 a kilowatt, and I'm going to invest it in households at the same price.

Nico Johnson  39:24

Yes.

Ari Matusiak  39:24

So if the household is delivering, let's say it's delivering 10 kilowatts, just for ease of understanding, that might be a little aggressive. But let's just say it's 10 kilowatts. That's a $30,000 investment in the household for the equipment that would be installed, i.e. the rooftop solar, the batteries, and the heat pumps, and that's not because there's some like extra special thing that is being done. It's just taking literally the amount of money that you would have spent over there and spending the same amount of money in people's homes. And now compare that to. Deals that are done where households benefit in these sort of proceedings, which are often understood as community benefits agreements,

Nico Johnson  40:09

right.

Ari Matusiak  40:09

And so there was an example. There's an example in in a state not that long ago where where an agreement was made for a set of these companies to effectively pay for a third of the low-income heating assistance program in the state, and amounting to something like $50 million a year, which is a lot of money,

Nico Johnson  40:30

right?

Ari Matusiak  40:31

But but if you do the analysis of the equivalent value of energy that is going to the household for that investment, it's $11 a kilowatt, and so so my the point here is to say if the the old way of of looking at this is saying roughly speaking the end of the line consumer is getting kind of a a community benefit sort of a level of investment

Nico Johnson  40:58

yeah

Ari Matusiak  40:59

you know because they're gonna be the. They're gonna money is gonna go into a fund over here that some people can draw from, but the the political settlement of that is really relatively speaking small.

Nico Johnson  41:12

Right.

Ari Matusiak  41:13

But down the hall, a different conversation is happening about the energy procurement required. Right. And that is just playing out at a market rate, and so so what we are basically saying is let's have the conversation about the households as energy infrastructure, so they receive the energy value, not the community benefit value.

Nico Johnson  41:36

Yeah,

Ari Matusiak  41:36

and that unlocks honestly like an incredible opportunity for market action and momentum and transformation.

Nico Johnson  41:46

I'm fascinated by this notion, and I know that a lot of smart minds are working in a similar vector. The devil's in the details because it's not. It's obviously a very like as you caveated at the beginning. Like this is, let's use a very round numbers example. But the asset being installed at a home is not always at the same efficiency. We could be talking about things like heat pumps, not just solar power. They are megawatts versus megawatts. The question that comes up for me, Ari, is how does rewiring fit into the architecture of this, as an entrepreneur, how do you make money on that while also doing what is essentially like market making activity? Look,

Ari Matusiak  42:30

I think there's a a missing middle here that needs to be created, which is the market making itself, right? So, so if we do the if we do the sort of hypothetical,

Nico Johnson  42:44

yeah,

Ari Matusiak  42:45

I would say to you the fastest speed to power solution next to that jet engine turbine is someone's house because you can get that done in a week,

Nico Johnson  42:54

in a day,

Ari Matusiak  42:55

yeah, in a day. Whereas you know the power plant's going to take five years,

Nico Johnson  42:59

right?

Ari Matusiak  42:59

Now the a very obvious counter argument to that is sure, but I need 10s of 1000s of houses to do this and crews

Nico Johnson  43:08

and not

Ari Matusiak  43:09

yeah not one house.

Nico Johnson  43:11

That's right.

Ari Matusiak  43:12

So that's the the sort of the the tension point is well okay that's a great idea how but how viable is it and and here's what I would say to that, inside any market, there is a natural cycle of home improvement and equipment replacement that is happening year in and year out for air conditioning and heating systems. Yeah, 15% of those systems, roughly speaking, 10 to 15% of those systems are being replaced every single year, and that's just happening, right? No one's no one's asking about it except for the household and the contractor who are in a conversation about getting something installed. And whatever is getting installed is getting installed, and that's just the end of the story. It is not energy infrastructure; it's a kitchen table decision, and people are sweating the details and worried whether they can afford the upgrade, oftentimes because it's happening at an emergency sort of moment where something is breaking. Similarly speaking, people are going out and buying solar panels and batteries every single year. People buy cars,

Nico Johnson  44:14

yeah.

Ari Matusiak  44:15

By the way, every single year.

Nico Johnson  44:17

Oh yeah,

Ari Matusiak  44:18

and they and there is a there's depreciating value for those, yeah, and there's there's a there's a replacement rate for those things too. So I think part of the part of what we see as the opportunity is the market is already transacting at the frequency level that it that is needed in order to supply the amount of cumulative megawatts that are required. And by the way, the market is transacting at a frequency to support that at a retail price, right? Like everybody's paying retail for what they're buying. They're not getting it at the price of energy infrastructure, which would basically take 60 to 80% of the upfront cost out. Yeah, and so. So if you start thinking about it in a very different way, you then are enabled. You're enabled in like architecting a new delivery model, where you are effectively saying, "Look, we need 200 megawatts over the next five years. Again, making up the number. That's roughly speaking going to be 20 to 30,000 homes.

Nico Johnson  45:22

Yeah.

Ari Matusiak  45:23

Okay. Well, let's get that organized here because are there 20 to 30,000 homes in this area that are going to be transacting anyway in this space? Yes, there will be, and we can we can harmonize that together in a way that makes it you know frankly just creates the win win for everybody, where you know the energy value is being conferred, and you are getting a lot better deal than you are otherwise going to be getting.

Nico Johnson  45:50

I just want to acknowledge the yeoman's work of even trying to think through the fact that this, like this counterfactual thinking, is required to disrupt the existing sort of the inertia of how things have been happening, right? I've not heard anybody say yet in all the podcast episodes and all the reading I've done that the theory around how it could be deployed is compared with what we know solar developers, what we know home developers, shopping center developers, all include in their proposals to communities, which is the CBP, the Community Benefits Plan. That for me is a revolutionary idea. I mean, it's it's a great. I think it's an it's an absolutely magnificent mode of comparison to enter into. Okay, we need to make this middle layer of market. Yes, there's going to be a need for there's going to be a need for a body of folks to come together and regulate and figure out how these how the money gets deployed. This is in many ways this is like Ari the communication the conversation that's happening on another level of like hey as an industry we need to put more money into advertising people are like, yeah, but who's going to get paid to do the ads? And really, like, we actually need to talk about where the money comes from and where it flows to. The household's first concept is a brilliant one, in my opinion. In that regard, a lot of people get stuck in the messy middle of like, but but how will we figure it out? So hypothetically, if it is a replacement for the CBP, the the community benefit plan, as an alternative option of investment, instead of, by the way, what we all know is just like, hey, we'll build you a new gym, or we'll do that, like we'll do this thing that your family may or may not benefit from. You may not care about football, but we're going to build a new stadium, and like those 50 families will care. That happens in communities around the U.S. all the time by solar developers and regular energy developers and home builders, etc. So what you're suggesting is, can we come up with a way to synthesize that investment into what effectively is a an a local incentive to electrify the home? How we deliver that? Maybe it's maybe it's done through the utility, maybe is done through private equity, through private interest, and and I actually I talk about this exact thing on the episode we published today with Molly Bausch. I'm fascinated by this because I had not connected the two dots, but that that's my point. Like Accenture and others, there's a lot of smart people thinking about this along with rewiring. I'm fascinated by this how this concept is gathering momentum right now. Now can I pull back the veil for a second and ask for those of us not involved in helping yet to push this notion, this idea forward? How do you see the the chess board? The the who are the players alongside rewiring that are trying to help coalesce this narrative? Because that there there's that layer above that says no, we got to get people aligned and on board with this message before we can start making a market underneath it that supports the fundamentals.

Ari Matusiak  48:47

Yeah, I mean, I I think we yeah we kind of came out with this idea last fall, last September, and we put out we put out our sort of home homegrown energy report and said households can serve up 100% of the projected load growth from these hyperscalers.

Nico Johnson  49:05

Yeah,

Ari Matusiak  49:06

and I, you know, maybe it's just worth kind of commenting on the experience of this over the last 10 months or more.

Nico Johnson  49:14

Yeah.

Ari Matusiak  49:15

So we we came to this idea. We put this idea out into the world. The

Nico Johnson  49:20

idea of homegrown energy. The

Ari Matusiak  49:21

idea of homegrown energy, and and I would sort of characterize the reception to the idea at the beginning as polite.

Nico Johnson  49:30

Yeah,

Ari Matusiak  49:31

which is oh, that's that's

Nico Johnson  49:32

cute.

Ari Matusiak  49:32

That's that's really interesting. Yeah, that's really interesting. And when we went and talked to some of the companies, and it it made total, it was very understandable.

Nico Johnson  49:39

Yeah,

Ari Matusiak  49:40

and you like went to talk to the companies who are needing to procure very large amounts of power. What is their decisional matrix? It's about getting those deals done as quickly as possible.

Nico Johnson  49:52

Yeah,

Ari Matusiak  49:53

and so you know the to like do kind of like exploration and market development. On an idea, on a concept.

Nico Johnson  50:02

Yeah, let's take a step back and think about this.

Ari Matusiak  50:03

Yeah, is not the first thing on the list, right? They have to they have to meet their sort of requirements for the next several years.

Nico Johnson  50:11

Yeah,

Ari Matusiak  50:12

and so there just wasn't the bandwidth really to engage. And then similarly, like utilities also were interested, but it's again this question of well, it moves so

Nico Johnson  50:22

slow.

Ari Matusiak  50:23

Well, how? Well, also just to say, like, how are we going to make this happen? Right, how do we get this out, or whatever the case?

Nico Johnson  50:30

Yeah.

Ari Matusiak  50:31

And then for policymakers, I think there had been, you know, if you just go back in time, like around the time when we were putting out our paper,

Nico Johnson  50:38

yeah,

Ari Matusiak  50:39

a lot of politicians were saying we want these data centers in the states because because it's economic development and jobs.

Nico Johnson  50:46

Yeah,

Ari Matusiak  50:47

and and and to just like move forward in time. And now it's like you know the some of the same politicians that were saying that we want the data centers are now saying we're going to need to study that.

Nico Johnson  50:57

Yeah,

Ari Matusiak  50:57

or we don't want them anymore. We need to take a pause. You know, obviously the pout

Nico Johnson  51:01

and a push button in time. By the way, for those who may be listening to this six months from now, was summer 2020 5o. Triple B IRA wiped away most of the funding for rewiring. Frankly, that had been granted wiped away. Like you guys reinventing yourselves and the Trump administration saying data centers of the future. All the big tech guys sitting in DC, basically getting office, getting offices there. Yeah, it was there was. I hear you. There was a huge push towards data centers, and a big a coalescence around this is economically important for our country.

Ari Matusiak  51:36

Yeah,

Nico Johnson  51:36

yeah,

Ari Matusiak  51:37

and and so I think just to kind of you to to be to actually respond to your very good question, that's like all scene set. But I think what what I have seen and what we've sort of experienced over the last several months is kind of a coming back toward this as an idea, and the idea is gathering momentum, and it is now becoming other people's ideas, which is exactly what you want to see happen, and so and so, I I think, but we still have kind of the next step of the work to do, which is I think twofold. One is to really lean on this construct of the household as energy infrastructure and make it understood as like a political imperative. If you are going to be allocating resources in any market for energy. We will think about the household as energy infrastructure and as a locus of that investment. I think that is like thing one that that needs to that still needs to happen and still needs to be pushed forward because sometimes elected officials and policymakers there's still too much of a disconnect, and I know this from my own time in government. There's like a disconnect between the different sort of silos of policymaking activity. You know, energy policy over here, housing and community efforts over here. They're sort of like not ever sort of boxed together, right? So, but there's an opportunity to do that now, and then the second thing is really to, and we have done a lot of thinking about this as well. By the way, is to look is to think about the regulatory and kind of market activation construct that needs to be put in place in order for the hyperscaler, as a for instance, to get credit for the investment that they are making in your house, yes, and for the utility in between to say, yep, that counts, and I can count on it.

Nico Johnson  53:32

And it it mattered to balance the grid. It

Ari Matusiak  53:35

mattered to balance the grid. That is, and that is not a. The good news is that that is not somehow beyond the pale vis-a-vis what kind of regulatory constructs we need to put in place or what the technology can do? There's not there's there's plenty of momentum in this way, yeah. But cohering that into a sort of a market construct and and model is the next piece of the work,

Nico Johnson  54:02

yeah?

Ari Matusiak  54:02

And then once that happens, right? Once that happens in one or two places, the good news is that everybody is looking for a solution, and if somebody does it, guess what? It's going to get adopted everywhere. That's right. So I, I think that's the that's the, and that is maybe the last thing to say. That is to me the underlying good news of this story, which is that there's not some sort of ideological resistance to this to the idea of the household as energy infrastructure. There is a question about how you would make it work.

Nico Johnson  54:36

Yeah,

Ari Matusiak  54:37

I was I was talking to somebody earlier and was sort of describing it as like the experience of you know we're we're in a box the walls feel like they're closing in it's like we're just stuck in this box and it's terrible and like it just keeps getting worse and worse and worse and you say what are we going to do how are we going to like survive in this experience. And one option is to look at that and say, like, well, we just have to we just have to make do with what we have. Another option is to be like, or you could just like step out of the box and then be in a totally different environment. And this household as energy infrastructure is sort of like the idea that is the equivalent of just stepping out of the box. And I think once you can show that it that it can fit together and and work, then you know everybody wants to get out of the box. Nobody wants to be where they are right now because it's not a great situation.

Nico Johnson  55:31

Yeah, we did an episode. I'm going to tie a few things together for listeners, long time listeners. This wasn't terribly long ago. This was in March, or I think March, maybe April, with the guy named John Perella about the nature of the way hyperscaler data centers interact with the grid differently than a traditional data center. Traditional data center is nine nines of reliability; they're pulling power always at all times. A hyperscaler, because of compute and how it works, looks more like having a a Lamborghini going 100 miles an hour and then slamming it in reverse. It's it's this cyclical, almost like a cardiogram of activity, and that actually feeds effectively dirty energy back onto the grid. It creates this harmonic distortion on the grid, and the question that was raised there is like, what should the data center be doing between them and the grid to improve the cleanliness of electricity? Yes, that's important. But also, I asked, and now we have, I think, a semblance of an answer here. What could the data center be doing where it affects the homeowners? Like, is there some sort of a filter that could be put on the line to keep homes from flickering, to keep this sort of harmonic distortion from affecting the homes, and the reality is, if the data centers took this approach, not only would they have happy homeowners, they would be they'd be incentivizing, but they would be providing the kind of balance on the grid that would help avoid exactly what a hyperscaler data center does, unfortunately, to the local community it interconnects with. I'm just going to put that there for those who listen to the show a lot, because you'll want to go back and listen that episode if you didn't pay attention to that part. On the on the regulatory side, I ask like, kind of where's the bellwether of what's possible? I'm curious, based on the work that you're seeing happening now, the the where you're both pushing it and where you see it now coalescing, would you wager a guess as to where in the U.S. you think this is going to take hold? First, like you said, it happens here, and then it happens everywhere. It's kind of like what happens in California, so goes California, so is the nation. I don't think it'd be California. My guess, by the way, is somewhere in the Midwest. I was recently in a conversation with Amron and Comed and Excel at a conference where I was just blown away by the thoughtfulness of how they're considering DERs on their grid. What's what would be your counterpoint? Where do you see the possibility taking root first?

Ari Matusiak  57:53

Well, I wouldn't sleep on California. I think there's some really innovative stuff going on. The context, the market context, is a little bit different.

Nico Johnson  58:01

Yeah, certainly more mature from the VPP acceptance.

Ari Matusiak  58:04

Yeah, but I, I, I think I agree with you generally speaking about where some of that thoughtfulness is playing out. I would say I think there's a huge opportunity in the PJM market.

Nico Johnson  58:18

Yeah,

Ari Matusiak  58:19

for the obvious sort of reasons about how messy things are, but you also have an over-indexing in that region of very ambitious governors who are facing very hard problems and need to deliver for their constituents.

Nico Johnson  58:42

Interesting,

Ari Matusiak  58:42

because they want to do that on its own, and maybe because they want to do some, they want to have a different job in a couple of years.

Nico Johnson  58:49

Yeah,

Ari Matusiak  58:50

and so I think there's a, I think there's a really big opportunity in the PJM market, but but I also would just say I, I, I have been impressed with, to use the word that you just used, with the thoughtfulness of of utility leaders and regulators, and frankly, the hyperscaler sort of leaders themselves, like the energy leaders in these companies. They are all serious people who are looking at this set of issues in a new and serious way, and I and I think that that creates opportunity all over the country because it's not consigned to one market region, and it's frankly not an issue that is that is sort of geographically kind of constrained. It's everywhere, so you you are going to start seeing, I think, permutations of solutions popping up all over the place because you know necessity is the mother of invention, and you have very serious. Committed people who are in these places, and who, frankly, I think don't get enough credit historically for that, but who are who are dialing in and saying, "Okay, you know, what are the market conditions? How do we sort of square this circle in a way that is going to be durable and not just sort of like a you know a band aid on top of a thing that we're going to have to deal with again. Right.

Nico Johnson  1:00:25

So I'm going to I'm going to pull back another layer. I'll stick with Illinois. Governor Pritzker calls tomorrow and says, "Hey, all right, this is fascinating and fantastic, and I love it. Illinois is ready for this. I want to implement homegrown energy. Where does he begin?

Ari Matusiak  1:00:38

Well, he's already done a lot, honestly, because Illinois has a has a really great set of policy pieces in place already. It just feels like you can be the

Nico Johnson  1:00:49

first domino. So yeah,

Ari Matusiak  1:00:51

right. So from the from the some of the the the law that the laws that have passed over the last several years that create yeah plan centralized planning opportunity that create a a lot of favorability for storage that sort of have all these things and by the way Illinois also has a great sort of housing stock for this in terms of the in terms of who would benefit and all the rest yeah

Nico Johnson  1:01:20

housing specifically.

Ari Matusiak  1:01:21

Well, but also just in terms of like the the the grid itself, the mix, the sort of like how people heat their homes. Yeah, there's just there's a lot of there's a lot of opportunity in in in Illinois,

Nico Johnson  1:01:33

and it turns out it's actually a big data center market that people won't realize. Yeah,

Ari Matusiak  1:01:37

yes, and there is a data center bill that is like wending its way, yeah. And so the thing that I would I would say is there's an opportunity to lean on that legislative process, and there's like incredible advocates in Illinois that are just I think some of the best in the country to to sort of to to lean on the opportunity with respect to this data center legislation to create the construct for, and it can take any number of forms. It could be in the form of a large load tariff. It could be in the form of a fund structure, whatever. But just to say to give the credit for the energy value, and I think another thing that is really important in this is if I was able to take my magic wand or my sort of magic pen, or whatever, and make the sort of market behave the way and be organized the way I think it would be best. I would say, okay, what we need to do in Illinois is we need to take we need to set a target of how much of the of the energy capacity we need is coming from households and and by extension community centered assets because you can play the same thing through in community centers and daycare centers and faith based institutions and schools and help them all by the way save money and have more resilience and all the rest, and you can think about the community assets in addition to the households as this sort of collective infrastructure. and And let's pick a target. Let's say 25% of the of the load growth is going to be met by investing in households, and 50% between households and community assets. And if you because because if you set a target of what you are trying to get out of the system in that way, it organizes the whole market, right? Because now I, as a company, know that my dollars are going toward this pool of which 25% is going to be directed to households, and all of a sudden, a lot of things start happening. And you know, and just to like play this out for a second, if the the energy value of these investments is enormous as as applied to households and the upfront costs of these machines, but it is also a catalyst to other market efficiencies. So, for instance, if Illinois is meeting 25% of its projected load growth, and that means that a couple 100,000 homes are going to end up participating in this program, well, it's a pretty great opportunity to negotiate better pricing with the manufacturers of those machines. Because I guarantee you, you're not paying retail for those for those machines because they're going to get to a lot of business. It's also a pretty great opportunity to talk to contractors about their pricing because now they don't have to sell the job the same way, and they have a lot of business coming their way.

Nico Johnson  1:04:37

Right,

Ari Matusiak  1:04:38

and it's a way to invest in small businesses to grow their businesses as they do this, my point being that those first dollars in cause a lot of knock-on benefit effects, where you are pushing the price way down as a consequence of that first investment, and the way that you can do that, I think the best is by setting. A target because it's not. It's now not this like open ended. Well, it could be whatever it's going to be. It's actually putting a thumb on the scale and saying no. We want. We get it. We're going to have more generation. Of course, we need large scale infrastructure projects and should have them. But we're going to get a lot of infrastructure projects done in people's homes too. Yeah, and we're putting a number on it, and that's going to organize the market.

Nico Johnson  1:05:23

Yeah, so many directions I could take this, and I want to just note that what our friend Tom Matsy says is that we don't do a good enough job of telling people the value we've created for them. This would do that. Oh yeah, in a massive way. In a massive way. So, for those who have read the the homegrown energy blueprint that you all put out last year. There is sort of an underlying or or an undertone, maybe even a direct acknowledgement that this not the the idea that affordability that everybody's talking about is a policy design choice. And I wanted to ask, based on kind of how you just put that into perspective for us, what's your response to the largely right that would say, "Oh God, more subsidies forever. Why do these guys always want subsidies? How does this fix household problems and address the concern that all these innovations require subsidies to live.

Ari Matusiak  1:06:24

Well, I mean they don't really, though, right? Like like heat pumps have outsold furnaces for the last what five years running, and now heat pumps are outselling air conditioners too.

Nico Johnson  1:06:35

Yep,

Ari Matusiak  1:06:36

that's not because of the subsidy structure. That's just because heat pumps are better, better. Yeah, I live in the south.

Nico Johnson  1:06:44

We didn't discover heat pumps five years ago in the south. Been using them a long time.

Ari Matusiak  1:06:47

No, no. So it just turns out that the technology for heat pumps has gotten so so good that they can work when it's really cold outside too.

Nico Johnson  1:06:55

Exactly.

Ari Matusiak  1:06:56

And so so I don't I don't you know the like the the canonical example are the EVs and the sort of like the subsidies for EVs. I mean, maybe sort of like one side point to make: like we've subsidized every industry that we've wanted to take off. There hasn't been a single one, including like going to space that we haven't subsidized. But ultimately, what happens is you create an industrial, you know the the learning rate, yeah, like and scaling effects bring down prices, and that is and is already happening. Like for instance, there's a $25,000 EV pickup truck that's about to come out. There's you know Ford has their Skunk Works project for a $35,000 pickup truck that they're releasing, you know, they're announcing later this year. There are a raft of new EV models, all of which are under $45,000, that are coming out this year. That and that's by the way, like not even that's in a world where we haven't accepted a single Chinese. You haven't said the word China, where they're $12,000, right? So, so the the the dynamics here are inevitable, and and I don't and I don't think about this as what what we're saying here is I don't think about this as a subsidy. And again, this is why I keep coming back to the this frame of energy infrastructure. Yeah, because we are spending money on infrastructure. We do it all the time. We will do it forever. You know, when I was in the White House, we had Infrastructure Month. You know, we had like we had we had like all kinds of sort of focus on infrastructure. It's a huge. It's everybody knows that you need to invest in infrastructure. So it is merely saying that the basket of money that is allocated to infrastructure. Some portion of it is going to households, and and it is not because you are getting less infrastructure value out of it. You're getting the same infrastructure value. You're getting the same unit of infrastructure value that you are getting elsewhere. You're just doing it across many more units, you know. You're then than you would be if you were just doing one power plant, and so I I think that is also part of the conceptual shift, which is that's not a subsidy, that's an infrastructure project. And by the way, I think very importantly from a Political perspective is it's finally treating people as they deserve to be treated, yeah, as opposed to just sort of like the end of the line recipient of like a pretty bad deal. And you know, if you want to like lay out the politics of this, the bad deal oftentimes gets understood as a deal that was being cut by elites that we didn't have any any voice in or access to, and that expresses a lot of the political discontent that exists now on both the right and the left. And so, if you're going to design a new politics around, for. Energy. Well, it would make a lot of sense to design that politics around giving people tangible value for for what they are contributing, as opposed to having them pay for it on their own without any help and taking all the value out of it on the other side. And that's effectively what happens now.

Nico Johnson  1:10:18

I am inclined to feel like, and I hope that the administration, whatever form it takes over the coming five to 10 years, can adopt that we are on the precipice of what could be something akin to a new deal. You know, you've just used the phrase "a bad deal, and there are lots of bad deals in terms of consumers for the trades, the transactions that have been made to ensure infrastructure gets put in place that benefits us all. It's asymmetric. Households have largely been financed, been asked to finance the system, and not be able to participate in any of the upside. So, if home on homegrown energy, which is a concept and a phrase that I love in in the way that you've designed it, if it succeeds, how do you characterize the new deal that it creates?

Ari Matusiak  1:11:07

We think about this a lot at Rewiring, and the starting line that we have every day is how do we make things more affordable and easier for households? Because our north star is to get to a billion machines across 151 million households by 2050, and so our report card comes due in a couple of decades, but we we probably shouldn't do what I did in college, which is get started on the big paper the night before it was due. Right, so we need to be making progress now.

Nico Johnson  1:11:41

Yeah,

Ari Matusiak  1:11:42

and so the so in terms of and the window to really to really make that progress is the window that you gave. It's really over the next five to 10 years. I see this as the inflection point, and I think said simply, the way that we're going to get to our north star and the way that we're going to know that we've had a major impact here. Is if in the presidential election cycle in 2028, candidates from both parties are effectively talking about homegrown energy, even if they're not using the term, because it's become a mainstream idea, and I think mainstreaming the idea is critical as a part of the next set of work to do. But you know, an idea also then needs to move into execution, and so that that would mean that in the next next several years, what we what we have achieved is that the first answer to the question of how we are investing in our energy system starts with the household. It doesn't end with the household. It says, "Okay, we need X amount of capability on the energy system for the next whatever period of years, how much of it can we get from households, and how how do how do we how much can we have households participate in that future? I think that needs to be the the sort of the the effect of this, because again, if you if you start there, it allows you to set a goal like well we can get 25% 50% doesn't matter whatever the number is we can get some big ambitious number and what always happens when you set an ambitious goal like that is you don't exactly know how it's going to turn out but typically if you organize people toward an idea that is compelling and common sense to track back to the beginning of this conversation, you end up overperforming what you think you were going to do because you start building momentum that becomes self fulfilling and actualizing, and I and that is and the reason for that in this kind of context is because what you've effectively done is created a win win win where nobody is sort of paired off against each other as as having to lose in order for the trade to go through, it is it is actually designing a model wherein all of the major participants and stakeholders get the benefit of the bargain, and I think that both recognizing that as an opportunity, and then having it become the starting point of any kind of design deal-making sort of policy-setting framework that looks like success, and the implications of that success are, you know, the the fact of that happening. But also, I think, frankly, like a much healthier politics that lends itself to other domains beyond energy, because that same framework can be applied to building housing, can be applied to healthcare. Can be applied to community investment. It doesn't need to be limited to this, but the energy system happens to be an incredibly important and useful point of departure for how we do this kind of work of shared power.

Nico Johnson  1:15:13

I think that my synthesis of the last hour is that the work that you've been about for the last several decades, and in particular, the work of architecting the narrative around how we can benefit these households is not about technology. It's not about grid planning. It's about dignity. What do you think, in that light, is going to be the hardest thing to convince people of?

Ari Matusiak  1:15:39

I think I'd say two things to that. The first thing is that the project of dignity is a project of strength, and that because it's a it's a project of shared winning, and I think that means requiring moving from a framework of winning and losing, winners and losers. So I think that is actually in our politics right now one of the most important things to overcome.

Nico Johnson  1:16:09

Yeah, because our

Ari Matusiak  1:16:11

politics right now is very much about winners and losers, not about shared winning.

Nico Johnson  1:16:15

It's totally the biggest mental shift.

Ari Matusiak  1:16:17

Yeah. So I think that that's thing one, and I think thing two is for people to be able to suspend disbelief that sort of a project of dignity has legs and will work. And what I've seen in my career is that a lot of times, very rightly, people say it's been a long time since that's been a thing, or it's never been a thing, and I haven't seen it ever work. Yeah, but there is at the core, and I believe this very deeply, at the core of everyone is this basic understanding and shared understanding of fairness, and I truly believe an optimism about what can be, because otherwise we wouldn't we wouldn't sort of keep pushing forward. So the the work is to connect to to like get to scratch off all the surface level stuff, and get to the to the optimism and hope that lies underneath, and that we all share, and then to to move the project from being about winners and losers to shared winning.

Nico Johnson  1:17:37

Ari Matusiak is the co-founder and CEO of Rewiring America. All right, thank you. One of the things that I love most about conversations is when I walk away realizing that I have to think differently about something I thought I understood. Today, for sure, is a conversation more about dignity and less about electrification, data centers, or even homegrown energy. It's a conversation about a different way of seeing our energy system, especially as most of our hyper intellectual nerd listeners think about it today. One where the households aren't simply consumers at the end of the grid, as you've described, but active participants creating value. Whether listeners agree with all the conclusions we've put forth, or not, I hope that folks listen and leave this conversation seeing the industry through a slightly different lens than when we started. Thanks for challenging our thinking and for joining us here on SunCast.

Ari Matusiak  1:18:32

Thank you, Nico. It was great to be here.

Nico Johnson  1:18:35

My lord, that was amazing. But before you jump to your next meeting or your next episode or whatever comes next for you after you finish podcast, I'd encourage you to sit with one question for today's conversation. What's the mental model that you're carrying about how the energy transition is working, or how it looks that might need updating? The technology it's changing, the markets are changing, policy will continue to evolve, but the leaders who shape the industry are often the ones willing to change how they see the problem before everyone else does. Ari is one of those, and I get the sense that probably you are too. I'd love to know what the shift was for you today. Drop a comment on the LinkedIn post that we make, reply to the email newsletter, or just send me a note. It's easy, Nico at suncast.me. I read far more of those than you probably think I might or realize, and many of our best conversations start there. Thanks, as always, for letting me be a part of your learning journey. Thanks to those who help keep this show going. Our sponsors, because they pay the bills. I just ask you to pay attention as you've done for the last hour plus. Remember, you are what you listen to. Thanks again for showing up, Solar Warrior. It's half the battle.

‍