Shayle Kann: I'm pleased to have with me Mateo Jaramillo, who's the vice president of products and programs at Tesla Energy, and Philipp Schröder, who is the CMO and chief sales officer at Sonnen. Obviously, both leaders in this early energy storage market.
I'd like to get started by asking each of you to just paint me your broad-strokes picture. If you're imagining energy storage in 2030, what does that market look like? How is it broken down in terms of scale of projects, in terms of what services energy storage is providing to the grid or to customers? Just give me the big view of it. I'll start with Mateo.
Mateo Jaramillo: First of all, it's great to be here. Thanks Shayle and Greentech Media for having me here. 2030 is an interesting year, particularly in our state of California, because that's the year by which we are legislatively mandated to be 40 percent less than 1990 levels on greenhouse gas emissions. 14 years away, translated into utility speak, that's four rate cases away, which is basically the blink of an eye. If we assume that all that happens, in 2030 there will have been dramatic change throughout the entire state across all industrial sectors. Energy storage will be a part of that, but it's important to put that context out there. I think some of the rough numbers are, even if we took 100 percent of the electric industry to fully renewable, we're still only halfway to the 2030 goal of the state. That has great things to say for energy storage. California being the leading state in energy storage for the U.S., that means that energy storage will be very likely prominently featured in that large transition.
The transition, to be clear, is not going to be restricted to just stationary battery storage systems. The utilities have been asked to submit their proposals to the CPUC around their efforts for transportation electrification, goods movement essentially. I think we'll see a pretty broad swath of society move, one, to electrification broadly speaking, transportation but also industrially, and then two, that storage will enable a large part of that transformation. Certainly from the fundamentals perspective, the role for energy storage will, I think, be quite prominent, and will exist in every sector of of that society: behind-the-meter assets both residential and commercial as well as front-of-the-meter utility stuff. I think there you'll see a huge diversity of types of solutions that come out to the market, and that they will exist at scale.
Shayle Kann: Do you think that that expected diversity of types of solutions is inherently positive for this market, or is it, especially during this transition period between now and then, does that present a bigger challenge? You need to do a lot of different things in order to create a holistic energy storage market.
Mateo Jaramillo: I think that's the beauty of an open, competitive, capitalistic market. The solutions will come out that the market is willing to compensate for. One company doesn't have to do all those things. Tesla, even as big as our ambitions are, we may not do all those things. Just the fact that the value would be present I think will provide all the incentive that's needed for good firms to bring compelling solutions to the market.
Shayle Kann: Philipp, what's your vision of energy storage in 2030?
Philipp Schröder: I think the best outlook that I can imagine for 2030 is if you, for example, look at a country like Germany today and last year. In 2016, there were a couple of days already where Germany was powered entirely by renewables. We have an 80-million-people country, it's the fourth-largest economy in the world, and it's being fully powered on the electricity side by renewables. I think this is what we will see sooner or later everywhere. There's another aspect that is very important to know about, is those capacities, they will roll over in a stage where the assets have been depreciated but where they still produce electricity. In Germany, we're now seeing gigawatt-hours of solar electricity rolling out of the feed-in tariff and becoming available at a very, very cheap price. They will be much cheaper than coal, gas, all of the conventionals, nuclear included.
That means that in 2030, we're having a reality where you're not making money with selling power. You will make money with managing power. Flexibility is going to be the key. Who can manage, if there's excess electricity supply from wind, from solar, who can actually store and who can make this flexibility, who can transfer this into services and also ultimately into money? I think that in 2030, at least in Germany, we're seeing an environment where conventional utilities as we know them don't exist anymore, but we will see a huge amount of decentralized assets that produce electricity at a very, very low price because the primary electricity is for free. It comes in for free. Whoever is capable of managing that process and creating a platform where those players come together, I think there is a huge investment, a huge opportunity in terms of business.
Shayle Kann: What do you mean by that? I think there has been a lot of conversation about creating that platform, and then it's taken various forms over various periods. There's actually some discussion in Europe in the Netherlands and places like that, peer-to-peer electricity sharing and things like that. What does that platform actually look like? Is that a physical asset? Is it software? Is that a market-making type of thing? All of those things?
Philipp Schröder: Technology-wise, it's nothing really advanced. The big difference between the European market and U.S. market is that actually the European market is a free energy market, because there is no monopoly on the utility side. We are a utility in Germany, so we have thousands of customers coming in each month. They built their own assets. They build a PV system plus storage. We collect the data and we are managing the flexibility for them. What happens ultimately is that we are not charging per kilowatt-hour anymore. We are simply charging a fee for software and hardware. We are bringing together all those decentralized assets in a balancing circle, so to speak. I always say if you look at a [typical] prepaid phone, in milliseconds you have to know if millions of customers have money on their prepaid card or not. That's a technology that has been around for a very long time. I think there's lots of regulative and structural boundaries to really tap this.
At least in Europe, or especially Germany, the market is liberalized. We are offering frequency stabilization with our customers, so we can actually do value stacking. The returns on frequency regulation in Germany per customer financed a storage system. We don't care where the battery's coming from. We couldn't care less if it's made by Panasonic or by anyone else. Everyone is having their bets out. In terms of chemistry, we will make sure that our customers will get the best battery chemistry available because we don't produce battery cells. That's not our business. Our business is to get the best commodity product out there in terms of batteries, and then utilize it.
If you now compare us especially in the European markets to our competition, I think that's key. We can tell the customer, "If you are part of our community platform, not only do you have long-term access to cheaper electricity, not only is it 100 percent renewable. On top of that, we're financing, via the value that you're bringing in for the grid, your asset." I think this is the key difference between us and anyone else out there.
Shayle Kann: One of the things I've been thinking about as it pertains to behind-the-meter energy storage in the U.S. is how you're going to see the installer, sort of the integrator landscape, develop over time. It somewhat relates to what you're talking about because you're saying one of the core value propositions basically is the ability to aggregate and provide this platform or this visibility into a lot of customers all at once. We saw in the solar industry in the U.S. thus far in its short history, there was a trend. There was a period during which if you want to deploy a lot of residential solar, you had to be offering financing. You had to be offering a lease or PPA.
In order to do that, you had to have scale, and so we had a small number of really large installers...taking over the market. Now we're starting to trend back toward the local installers doing the same thing. Mateo, I guess I ask you this question because Tesla has been sort of downstream integrated deploying systems, but I get the sense you don't necessarily want to be doing that forever. What do you expect the integrator installation landscape to look like in 2030, and then what's your role relative to that?
Mateo Jaramillo: That one's an interesting one to start thinking about 14 years in the future from now, I think primarily because so much of the subject could change between now and then. Yes, we have sort of a couple large installers today on solar in the home, and then a very long tail which completes that market. Does something similar exist in the future? It's hard to say. Germany has a very different context. They're almost all very small local installers. Australia has something similar. If you start to look at the global market, the U.S. is a little bit unique in that regard, in that it is a function of the financing that was required, as you point out, whereas in the other countries they largely were just straight sales, or very locally financed sales.
I think the general trend even in the U.S. is to move away from those finance systems or the leases or the solar PPAs, and more to loans or outright sales. I think you'll see the resulting shift in that market broadly speaking. Obviously Tesla now owns SolarCity. They've built up a great set of functionalities and feet on the ground to be able to do that, and we fully plan to utilize that as one of the key features. Maybe more directly to the point from Tesla's perspective, we see a convergence in a number of ways around just the consumer experience for getting these newer distributed generation technologies into your home. We obviously think a lot of that starts with a vehicle. A lot of people will be buying electric cars, and those same people will want to be able to get the other clean generation technologies.
Shayle Kann: The thing about the customer experience question, it makes inherent sense I think, and having a good brand seems really valuable, but I wonder, for other household items, like the customer experience of getting a new roof today, or plumbing fixed or something like that, I don't think that's the top focus of those industries. Is it because they haven't figured out yet what Tesla and Sonnen have figured out, that it needs to be a really exciting customer experience, or is there something different about these energy offerings that requires a better, higher-level customer experience than the electrician who comes to my house and installs LEDs?
Mateo Jaramillo: I wouldn't say it has to be an exciting experience. I would say it has to be a good, solid, reliable experience. Maybe it's our perspective informed from the vehicle side, but as Carla Peterman, one of the commissioners here in the California Commission likes to say, electric vehicles are the gateway device for energy literacy. Everybody can tell you what the price of gas is for their conventional car, and almost nobody can tell you what the marginal price of electricity is that they pay in their home, but when they switch over to an electric vehicle, guess what? They know exactly what rate tariff they're on, they know exactly what their options are available to them, and they start to take on these other activities like energy efficiency and solar and this other stuff. I think with that sort of mind shift, you do get people who want just an easy, reliable, integrated experience.
Shayle Kann: Philipp, two questions related to that for you. One, how seamless and beautiful does the customer experience have to be in order to sell this stuff? Obviously that comes at some kind of a cost. Second, Mateo also just sort of alluded to something people talk about a lot, which is that you get one of these things, then you start building on more and more. When you have a customer over a long period, you have lots of upsell opportunities. Might you also get into various other things in the home, start selling additional things to customers and then putting them all on your platform?
Philipp Schröder: I have to say yes and no. The entire industry's a bit dominated by the price discussion that Tesla actually initiated, and then the price discussion is completely taking out of the picture total cost of the storage. Tesla is describing the price of a commodity. I think everybody who is inside, in storage, knows that permitting installation is an equally important pricing issue. We also know that's very individual. I think for us, it's not important how expensive one, let's say the inverter is, the battery pack is, the wiring is. It's important that we have a total cost structure that is good. It's important. For example, an average installation time for our systems in Germany is three hours. It makes sense at some point to invest more in installation friendliness, for example, out of a total cost perspective, than to simply look how you can build a box that is cheap in production.
I think that is important to know if you talk about storage. Everybody's looking at pricing at the factory gate, but we know, and we are successful not because of being better in pricing on the on the battery side than Tesla. We are successful because our installers know it works, and it's easy to install, and total cost is feasible and scalable. The second question from you, whether we integrate other devices: absolutely. The data side is for us very important. We are running together with Tiko. That's a partner of ours that we do frequency regulation with. We're running with them the largest microgrid in Europe. There are heat pumps on that.
This all comes into play for loads. Basically any kind of load is flexibility in a future energy market. We are already integrating heat pumps, we are integrating also a charge of electrical cars so that the loads are being managed in the concept of the community. Of course, the more data we have, I mean, if you're part of our community, we know when you use electricity, how much you use, we know if you're cooking on Tuesday or not, and we can enable the software to become even smarter if we, for example, integrate weather data and all that. The pathway of the community is very clear. The storage is the entry into the home, but the entire story for us is to have one single smart home solution that is managing energy for the residential customer.
Shayle Kann: You mentioned pricing, and that's a good segue into a question that's right now leading in the votes from the audience here, which I'll adapt a bit. Initially it's a question for Mateo, which is, is there a Tesla path for stationary storage costs to less than 5¢ per kilowatt-hour stored and shifted per cycle? If so, when? Let me amend that question. To ask, "Do you see a path that's drastic cost reduction?" More importantly, as we head down this cost reduction path for the full cost stack of the system, where do you think we're going to hit a bottleneck? Where, over the next 14 years, are we going to find a portion of the total cost to install, as Philipp was alluding to, as opposed to just the battery pack, where it just becomes this bear that we can't get down? What do we have to watch out for?
Mateo Jaramillo: Yes, there's a path to very low pricing on on battery storage. We certainly believe in that path. We bet the whole company on it. That's not the main concern. Now, that said, there's a lot of parts that go into making a battery and to making a battery connected to the grid. At the end of the day, people don't want to buy a battery. They want to buy power or energy. That's why they're buying the thing in the first place. To get to that transaction interface, which is AC energy on the grid, there's a lot of components. Yes, there's installation, but there's also power electronics and there's controls and there's mechanical systems and other electrical systems that all have to go down that cost curve.
It's much more than just the commodity metals which are going into the batteries themselves. It's the balance of plant, and that's certainly where Tesla has spent a lot of time both on the car side as well as on the stationary storage grid side of things. We don't see any fundamental bottlenecks around that. There's just a lot of work in all the different areas that will be required to be able to continue to go down that price curve, which we think is absolutely doable. They're engineering problems. They're not science problems. That allows the company, Tesla to take a very specific approach to solving those engineering problems, which we're very good.
Shayle Kann: What about you, Phillip? Do you see something over the next 14 years you think, you look 10 years down the road and you think we're going to have a really hard time reducing that cost to the point where storage becomes ubiquitous and cheap?
Philipp Schröder: I think it's important to understand about Sonnen that we're agnostic when it comes to battery chemistry. We are looking at the entire market. We see that there are big bets on the table of scaling the technology and bringing the prices down. If you look at China, if you look at Japan, if you look at Korea, if you look at Germany, if you look at the United States, there're multiple players betting billions on chemistry. I think we and our customers will make sure that we will be benefiting from that process. We believe there is going to be much potential, but the larger potential is not in bringing down costs by another 30 percent or 50 percent just on the battery side, because power electronics, for example, there is not much room because most of the power electronics are scaled already. The larger potential is in the utilization of the asset.
If you use a system only for backup, you barely have a cycle a month depending on where you live. If you use own consumption, you are going up to 250 cycles, and you probably use the battery seven hours a day, so you still have 17 hours left to work with it. If you use the asset during that time and find a way how you can create a return on it, this is the much more important angle. If you're good in aggregation and value stacking with storage, this is the magic bullet. Our customers, they buy us because they have the sharing and they have the returns on frequency stabilization. They would probably not buy us just because we're 10 percent cheaper or more expensive than anyone else on the hardware side. I think this is the true magic. The silver bullet is utilization. It's not the commodity side.
Shayle Kann: I think that's an interesting point that isn't talked about a ton. When we talk about energy storage, we talk a ton about the cost reductions. The point you're making is cost reduction can be equivalently important to revenue increase. If you have another source of revenue which comes from grid services or something else, that can be just as important. You could have the costs stay flat, revenue increase, and the economics get better. You also mentioned the customer may not care if you're 10 percent cheaper or not, which relates back to, I'm remembering that Steve on that last session said that he thought if there's some small subset of customers who are interested in energy storage for backup today, not as an economic value proposition, and they probably already all have Powerwalls. Do they already all have Powerwalls, Mateo?
Mateo Jaramillo: Certainly not everybody has a Powerwall at this point.
Shayle Kann: I mean, presumably not everybody cares that much about backup.
Mateo Jaramillo: Look, we think it's a global market, right? Backup is one of the values that people are buying the system for, but there's a lot of other values. The other thing is we've sort of implicitly been talking about the residential market, and certainly that's not the only focus at Tesla. It's a big market. The energy market dynamics will certainly shift. The network operators however are not going away anytime soon. The natural monopoly function, and that regulated natural monopoly function is also not going away.
There's a bit of a pitched battle right now in terms of the role for those network operators. Do they continue to be who they are? Are they just this distribution system platform provider, and everybody else develops value on top? How do those bring services and infrastructure to bear into the broader markets? Residential products will be participants in that, but in a much broader market. When we think about where cost curve matters and where application stacking matters, it matters across the full spectrum of the entire industry.
Shayle Kann: Philipp, that actually is a good segue into one of the audience questions that is getting a lot of votes, which has to do with the utility and the role of the utility. By 2030, you mentioned that you think the utility might cease to exist as it exists today by that point. Can you elaborate on that? In what way will we still have utilities? What will they look like? How will those business change?
Philipp Schröder: For me, it was a very strange finding when I found out that the U.S. market is highly regulated and is basically stuck in a monopoly on the energy side. For us it's common sense, but I'm from a market that is deregulated. The network is a highway that everybody has to pay for. They use it, but anyone can use it. I can send my truck on the highway, you can send your truck on the highway, anyone. I think that's a fundamental principle of a free market. It also is very important to release the dynamics of renewable energy, because as we just heard, PG&E, they get paid on conventional basis of having large centralized units, and then they have to amortize the investment via retail pricing. It will be very hard for them to come up with business models. The only way to generate these business models and also make sure that the United States are leading in them, because there's lots of potential. The private home is the last resort that is not digitalized. Energy is being disrupted from the hardware side, but also from an aspect of digitalization and data. This is a huge opportunity.
Anyone in the room probably now thinks, "OK, this guy doesn't know anything because this is not going to change here in the U.S.," maybe because of Enron or whatever. I'm pretty sure that in 2030 it will have changed, simply because it is the more feasible business model. It will really unleash renewables. If somebody in politics becomes really serious about renewables in the U.S., if that happens, then I think in 2030 you will see on various state levels much more liberalized markets because it will enter into innovation, growth and technology. That's what we're seeing in Europe. It's the right way to go.
Mateo Jaramillo: I think we're already seeing that in Texas, for example. That's sort of the beauty of the 50 state laboratories that we have, different models pursuing different paths. Texas being an energy-only market, Germany looks a lot like Texas. It's probably the only way in which Germany looks a lot like Texas, but highly competitive retail markets, highly competitive generation markets, and then sort of established network operators. The state of Texas has done some good things to really incentivize renewables, and the output, and specifically transmission build-out. The result is that, of course, they have a lot of renewables, and now you're seeing merchant solar come for the first time in a major way in any U.S. market. I think that a lot of states obviously are looking at Texas.
They're also looking at Texas for how they're talking about capacity, and how that as a resource is procured. In any energy-only market, capacity, even if it's never introduced formally as a product, is always up for consideration because it's a fundamental feature of any market, frankly. It may be compensated directly in the market or not, or just bilaterally on the side through PPAs, which is how Australia does it. I think that yes, we will see a move toward probably more deregulation on the retail side of things. The voters in Nevada seem to think that that's going to be a good idea. How that plays out over the next whatever it is, eight years that it's really going to take to implement, we'll see. On the other hand, you have New York, which just recently said they're going to re-evaluate the retail energy market and maybe pull some of that back. We'll see a lot of these go in different ways.
The important thing to keep in mind is that energy storage will participate no matter what the structure of the market is. No matter what path on regulation is taken, you can come up with a solution that works for incorporating energy storage because it provides value to the market. You can talk about the role of the network operator, and should they own storage, or per se, are they prohibited from doing it, or do you allow them to do it and allow value to be accessed in the retail markets through some ring fencing that regulatory [regime] is set up appropriately.
Philipp Schröder: It is, however, a bit like asking conventional taxi drivers to use Uber. We are lobbying a lot for more liberalization, deregulation because we do not think that the true change is happening in a structure that is fundamentally imprinted by conventional energy. We believe that there is a need of change also in regulation. We have seen that this has been the main issue to make Germany successful in renewables. It would probably not have worked at all if the big utilities like RWE and Eon would've been the ones who had to design the energy future. I think everybody in Germany would agree that this would not be happening.
If you look at the operators off renewable energy, the largest operators are citizens. This transition has been carried out not by conventional companies, but it has been carried out by a completely new stakeholder in the industry. I'm 100 percent certain that results of 100 percent electricity from renewables in 2016 would have never been achieved if we would've asked the conventional utilities in 2002 to come up with a plan to do that in 10 years.
Shayle Kann: Setting aside the role of the utility question, I think one distinction between the approach thus far that Sonnen and Tesla have taken in the market is sort of what segments you're focused on. Tesla's taking a very broad approach, that you want to do everything from residential through large grid-scale energy storage. Sonnen is focused primarily if not exclusively behind the meter. Can you talk about why, Philipp, you haven't gone for big front-of-the-meter applications? Do you think that's not going to be a big part of the market, or is it just not where you're suited?
Philipp Schröder: Just my analysis from from the outside is that the driver for Tesla is to utilize the factory that they have. Just jump in if I'm saying something stupid. If you are producing a commodity, you want to sell it, and you don't care where, and you don't care under what regulation. Basically, if you have a big project, that's fine. If a small one, OK, let's scale it. That's not our business model. Our business model is to build an energy future where everyone can participate. We don't want to sell a fancy box to rich dentists. We want to come up with a sustainable business model that allows everybody to access sustainable and affordable energy, and we'd prove in Europe that we have better pricing and that we actually bring a business model to the market that can replace the conventional business model.
We're not a niche. I think that's the main difference. Our driver is not to get gigawatt-hours out of our factory, because we are agnostic when it comes to battery [tech]. We're about the business model of really coming up with the utility of the future that enables a real 100 percent renewable future. I think that is it. It's totally legitimate if you are producing lithium-ion cells that you want to sell, but we're not producing them. We are producing a solution and a service, and we have a strategic target that is completely different from a commodity producer.
Shayle Kann: Right, though I think that Tesla's not the only company that has any focus on front-of-the-meter applications, large grid-scale energy storage. There are downstream companies that are also technology-agnostic, doing the same sort of thing. Is it for you, just that you view the future as as totally decentralized?
Philipp Schröder: Absolutely. I think the main feedback that we get in Europe from politicians is, "We are waiting for companies to come up with business models that really are sustainable without an ITC, sustainable without a feed-in tariff, that really can make it economically viable and create a marketplace that works with 100 percent decentralized electricity from renewable sources." I think they are right. The industry is waiting for subsidies, and then they billed a couple of gigawatt-hours, and then they say, "Where's the next check?"
I think the next level, once you've reached a certain penetration of renewables, is to really come up with a new business model. I think that that's what we have been achieving. That's simply different. Again, it's completely legitimate to say, "I want to do in front-of-the-meter storage," but then you by definition have to work with utilities because you are a service provider to them. I think that's the difference.
Mateo Jaramillo: From our perspective, we're drawing a distinction between utilities and network operators. I think that, again, the idea of the sort of antiquated 100-year-old idea of the utility is probably not going to exist forever. We're not getting rid of transmission distribution, though. That's a natural monopoly. There's not going to be competitive wires run to people's homes. That's going to be a fixture of the future going forward. The reason Tesla has a diversity of products addressing all these different size of markets is for the simple reason that the entire electric industry has no inventory in it today.
If you sort of draw analogies, and again, analogies fall down if you push them too hard. I come from the town of Salinas, Calif. where we grow a lot of lettuce, about 100 miles south of here. That whole industry was revolutionized by cold food storage. You could say, "Well, jeez. If that's a good idea, where should I put it?" I should put in a lot of places. I should put it in a large, central place where there's harvesting, I should put in the transportation to get to the markets, I should put it in the local inventories in those markets, and I should put in people's homes. If there's value to be had at every step by introducing inventory, then why not create products that go address that value and allow you to create a market there? That's more how we think about it in terms of just being able to create an efficient system that effectively utilizes an asset that's bringing value.
Shayle Kann: Final question. I was hoping to avoid it, but our audience wants to talk about Trump. I'll ask this to Mateo initially because you have a lot of focus on policy and regulatory issues. There's no ITC for storage to protect in the same way that there is for solar, although storage, many of the installations taking place today benefit from the solar ITC. There's sort of a preliminary question of how much concern should the energy storage industry have about risk to the investment tax credit? Then beyond that, what are the federal government influences that you're going to be monitoring in the next administration that could impact the growth of energy storage?
Mateo Jaramillo: I think probably everybody in the renewable energy industry went through a similar sort of thought cycle immediately after the election -- the ITC's going away. Oh, wait. Hold on a second. It's actually a big industry. It's very likely not going away. That's generally where storage ended up. It's, as you say, sort of one of the qualifying technologies that does qualify when paired with the renewable resource. We think that that's probably in fine shape, and we don't need to track that one too much, although we certainly make sure that the ground is defended. The other areas of specific policy, we're much more concerned with making sure that the FERC is doing the things that it needs to do, for example, the recent ruling which you mentioned earlier today, is certainly a key feature of what we're focusing on going forward.
Shayle Kann: The president will have two appointments on FERC, although by law, they need to be Republicans or independents. How much should we pay attention to who ends up filling those two spots?
Mateo Jaramillo: We should pay close attention. We've met with the candidates that are rumored to be the top folks to be in there. Fortunately, at least historically, the FERC has been a pretty apolitical organization, largely because it's just seen as probably boring.
Shayle Kann: No, Ron Binz's appointment. President Obama tried to appoint Ron Binz to FERC, and that became a bit of a political firestorm for a minute. He ended up not being able to make that appointment. It periodically pops up in the consciousness.
Mateo Jaramillo: Yeah, historically, broadly speaking. We live in a highly politicized moment, though, and so it's hard to say exactly, but like I said, that's why it's important to meet the folks who are out there on both sides of the house. We meet with Republican members and their staff all the time to make sure that we've got good relationships. Largely speaking, the people that are in the pool for candidates are well-intentioned, thoughtful, intelligent, informed people. A large part of the challenge for the industry, broadly speaking, is education, as it is for any relatively new market. What is the true state of the technology? What is the true state of the cost curves? What do these really look like? So that the regulators can do their job well, which is basically having good information in making new decisions.
I think the FERC, we've put a lot of time in with the FERC to make sure that they do understand where things are, and not just Tesla. Lots of other firms as well. To their credit, they've hosted seminars for storage and this kind of thing. We're paying keen attention to the regulatory frameworks that are happening, yes in D.C., but as I mentioned earlier, in the key states, we have to pay attention to those. It's not every state. It's a handful of them.
Shayle Kann: All right. We're out of time, but let me offer you my takeaway from this session, which is a quote I'll attribute to Philipp, which is energy storage avoiding selling expensive boxes to rich dentists. That's our goal as an industry. We're going to have a short networking break. We're going to come back in a half hour. In the meantime, please join me in thanking our panelists this morning.