On this episode of The Next Generation of Energy, Host Tyler Kern talked with Joe Piccirilli, CEO at RoseWater. They dug into some of the lessons Piccirilli and RoseWater have learned throughout the years regarding installing products among other things. They also drill into the market forces in the current energy industry.
“When RoseWater began, products that were considered power products were really based in recs,” Piccirilli explained. “They were really small and had really small capacity. We at RoseWater were convinced that ‘now is the time to build something that was substantial that could back up a panel.’”
In the beginning, they thought a 100 amp panel would be enough to back up critical loads. This was bigger than anybody else was offering, and everyone thought they were crazy. They started with a 100 amp and 200 amp product. Most services for a very large home start at 400 amps, so the 200 amp would cover half the house.
They thought the 100 amp would be their leading seller, but they discontinued the product after six months. The 200 amp ended up being their sweet spot because it allowed a subpanel of critical loads that people wanted to protect.
“Once we started convincing people that it wasn’t just backup power … but it was about power quality,” Piccirilli said.
Listen to hear more from Piccirilli and insights on the energy industry.
FULL TRANSCRIPT OF VIDEO:
Tyler Kern (00:00):
Hello everyone, and welcome to The Next Generation of Energy, brought to you by RoseWater Energy Group. I’m Tyler Kern, your host joined as always by Joe Piccirilli. Joe, good to talk to you today. Welcome to another episode of the podcast.
Joe Piccirilli (00:12):
Well, thank you, Tyler. It’s good to talk to you as well. And I’m looking forward to today’s podcast.
Tyler Kern (00:17):
I’m as well. And today we’re talking a little bit about some of the lessons that you at RoseWater have learned over the years when it comes to installing product and so much more. And I think this is going to be a really interesting topic, just drawing on your experiences in the industry, and your experience with these products. And that’s what I’m really excited to talk about. So Joe, from your perspective, just in terms of working with customers, working with clients, things like that, what sorts of expectations have they had when it comes to products? And what have you noticed over the years in terms of what people are looking for?
Joe Piccirilli (00:52):
Well, it’s a great question, and it’s hard for me to do that in just a few words. And of course I’ve never been a man of few words. But when RoseWater began, products that were considered power products, were really based in [inaudible 00:01:09], they were very small, very small capacity. And we at RoseWater were convinced that now was the time to build something that was substantial, that could back up a panel. And in the beginning we thought, well, maybe a 100 amp panel would be enough to back up critical loads, that was certainly bigger than anybody else was offering, and people thought we were out of our minds. And we started out by offering two products, a 100 amp product and a 200 amp product. Now, just so people know, most services for very large homes started at 400 amps, so our 200 amp product would cover essentially half the house.
Joe Piccirilli (01:50):
And as it turned out, because we thought based on price point and size that the 100 amp product would be the seller, we couldn’t have been more wrong. And within six months we discontinued a 100 amp product, and we found that this 200 amp was our sweet spot, because it allowed a subpanel of critical loads that people wanted to protect. And once we started convincing people that it wasn’t just backup power, it wasn’t just, if your power’s out, you have a substitute for a generator, but it was about power quality. Then people really locked onto the 200 amps. And of course, one of the other decisions we made was to make sure it could fit into a single cabinet. So this is a very large, the cabinet’s 84 inches tall. The cabinet is two and a half feet wide and about two feet deep. And unfortunately, weighs 2,400 pounds.
Joe Piccirilli (02:53):
And as people got used to having the device, they’d go, “Wow, this is a really cool device, and we’d like one in our condo and pick your place”. And I’m going, “Oh, really? What portion condo on?” And they’d go, “Yeah, we’re on the 27th floor and we have the pet house”, or something, and I’m going, “Well, most multistory units, the floors won’t support more than 350 pounds a square foot. Our device unfortunately loads at about 800 pounds square foot”. So just all we could imagine was somebody putting one in right out of the old comedy and it falls through 20 floors of a building, hitting a car in the parking structure in the bottom. So we’re going, okay, we’re limiting our market by having it, how do we without compromising capacity or anything like that, how do we minimize floor load? So we could take advantage of people’s second and third residences.
Joe Piccirilli (03:51):
And so that we put that sort of we cut the file of, if we could change things, what would be changed, and that was certainly one of them. And people got used, more and more people were demanding it. And as well as our product does in its heavy state, sitting in garages, or certainly on the first floor, we knew that we could expand the market if we could make the floor load less. So that was certainly one lesson. You would think that, “Oh, you got to do sell the cabinet half, make it two, should be no problem”. Well, little more complicated than that. That’s certainly in our product design and our product flow. And near the end of this we’ll talk about all the things we learned and what you can expect from RoseWater based on what we learned.
Joe Piccirilli (04:39):
So I thought that was interesting. And we started to learn some other things, people all around the world have been talking about lithium ion, and I’m sure you’ve heard about lithium ion batteries. And sometimes I think most of our audience doesn’t think that they’re any other battery in the world, it’s all lithium, it’s all gone to lithium. And we of course were contrarian. We wanted to use lead acid batteries, and unfortunately that contributed to our weight. In the beginning, we offered both lithium and lead acid, and it turned out once the clients talked to us, nobody ever bought the lithium product. Even with the weight, because there are safety issues, there are environmental issues with lithium that are difficult to overcome. So that’s another thing, okay, we’d love to make it lighter weight, but we can’t go to that chemistry.
Joe Piccirilli (05:31):
And how do we design a product based on what we know future chemistries might look like that will adapt. So that was another kind of, okay, let’s see what we can do. It’s a little check mark. So that’s kind of interesting. And then the most interesting, I think, is we thought 200 amps was a pretty good size, and people kept going, “Well, I need more than one of them”, and I’m going, well, first I look up to the heavens and say, “There is God”. And then, because those are nice sales, and then you go, well, wow, because our critical loads demand much more, and what we consider critical is more than what you might think is critical. So we’re going, we need larger capacity because the size of our unit it’s hard enough to fit one. Fitting two makes another challenge, more difficult challenge, because no matter how large the house, non-living space is at a premium.
Joe Piccirilli (06:38):
So the mechanical rooms, the laundry, everything is, it starts out at one size and ends up at half the size. So there’s always a challenge for space. And again, that means, oh wow, can we build a larger capacity unit and put it in the same space, and then have it pass forward? So those were kind of interesting tidbits that we picked up along the way. So it has resulted in a fairly large effort, product development effort, that we suspect will come to fruition. We’re hoping to show a prototype at the end of November. But what we have developed is a unit that is both double the capacity, so it’ll serve a 400 amp panel. It comes in two cabinets that are either stackable, or can sit side by side. In the side by side configuration the floor load goes down to about 300 pounds per square foot, which means it can go in high rises at the very top floor, which solves that problem.
Joe Piccirilli (07:54):
And the reason to make it stackable is in, as we discuss, mechanical rooms and things shrink where they have height, but they have no floor space. So we have created a unit that will do both things, and we are looking forward to introducing that product. We think it solves a tremendous amount of problems. So in our product roadmap that’s part of what we’ve learned. It is fascinating. And the other thing, and I don’t know, Tyler, how you feel about it, but we see our clients, and our clients sit down and go, “Okay, we love this so much. Can you do our whole house?”
Joe Piccirilli (08:38):
And part of that, can we do our whole house, is there’s this huge misconception out there that, “I can get enough batteries to power my 35,000 square foot home”. And I jokingly go, “Yeah, if you have another 35,000 square foot building for batteries you might be able to pull that off”. It’s not going to be that easy. So it is now what RoseWater is working on is the ability to power condition a whole house and do it in a manageable space. And I’m only going to tease that product a little, because that product’s two years away. But that’s what we’ve learned. You’ve been with us, you’ve been around us for a long time, Tyler, and at first we had to explain what power conditioning is, and how the effects of power conditioning, and all of the internet of things, and all of things that go on in a house, and how poor power quality compromises them.
Joe Piccirilli (09:39):
And now we’re getting to, “Oh my God, I have one of these. I want to do my whole house. So let’s do it”. And we are working on it. And my point, and the point of all of this is that we pay attention to the market. And we are not driven by price point, we are not driven by what the newspapers have to say. We are driven by what we hear from our clients. And I think that’s very, very important. So now that I’ve [inaudible 00:10:09] for I don’t know how many minutes, what other direction can I take?
Tyler Kern (10:16):
We talk on a pretty regular basis on this podcast, and you laid out some of this just there in your answer. But I wonder just over your time talking to clients, and hearing what they are looking for and what they expect, what sorts of customer expectations have maybe been the most surprising to you? Or things that people said, “Hey, I would really like it if I could do this”. Has anything ever stood out to you as being particularly surprising, or interesting, or anything along those lines? Because I think that that is maybe one of the most interesting conversations that we have here on a pretty regular basis is just what consumers expect these days, what they think that a product can do versus what is actually possible. And so I’m curious, just from your perspective, what sorts of conversations have you had with customers that maybe stood out in your mind as being particularly interesting?
Joe Piccirilli (11:07):
I found, in fact it happened last week. It was interesting. I was talking to some potential clients, and we had this house, we had a generator, we were told we could do the whole house with the generator and that it would run forever. Well, they were in a situation where they had a power outage that went for two weeks. And they were living in the house and running everything as if they had good power. And they were shocked that after five days they were out of fuel. And they’re going, “We went from partying like it was 1999, to, hey, we’re in the dark ages”. And I’m going, “Who told you that would ride for two weeks or longer?”
Joe Piccirilli (11:56):
And it is managing that kind of expectation that has been most interesting, because people really do not want to change their lifestyle. “What do you mean I have to worry about my wine coolers, my thousand-dollar wine cellar?” “What do you mean?” “What you mean I can’t turn on my double oven?” That draws unbelievable amounts of power. “And you mean I can’t invite the entire neighborhood over for a party and turn on every light in the house?” “No, you can’t”. And it’s fascinating. People want their conveniences, and it is very difficult to change people’s habits. Because in the light of rational thinking, “Oh, there’s a power outage, you might want to think I should conserve no matter what I have out there”, because nobody knows the length, because you can’t assess the damage for weeks. As you know, being in Texas, sometimes you can’t assess the damage for a month.
Tyler Kern (12:55):
Exactly. We saw that firsthand.
Joe Piccirilli (12:59):
Yes. So it is the idea of what people consider critical and what they, “Oh, I can’t live without this”, “What do you mean I can’t charge my electric car?” I’m going, “Where do you think that electricity is going to come from?” Or the reverse of that, I just saw this ad I couldn’t believe they said this out loud. “Oh, my vehicle will. The battery in my vehicle, when it’s not in use, will run your whole house”. I’m going, and they never mention, of course, how large a house they could run, or for how long, or the fact that if you’re doing that, forget overusing your vehicle, because that’s not going to happen. But it is that kind of, this broad statement with no disclaimer, that is the most difficult thing to overcome. And we find that clients who end up purchasing solar, and batteries, without really understanding the sizing of both, they go, “I have solar power. They’d run forever”. I’m going, “Well, nighttime’s kind of a problem, so let’s stop that forever”.
Joe Piccirilli (14:18):
You have to have enough batteries to get you through the night, if nothing else. And then you better hope it’s a perfectly sunny day the next day, because not only do you have to run your house, you have to recharge your batteries. And again, people are led down the path, and it’s really not the client’s fault. Their expectations are managed by the people who they consider experts. And it is unfortunate that sometimes people lose the ability to use or to do basic arithmetic. Because the calculations are just not that hard. And that’s been our difficulty throughout, we’re really the contrarians. “Look, we’re going to engineer this so it will actually work. And, oh, by the way, this is what you can expect. And if you start out by demanding that you want to do this, yeah, I can make that happen, but the bill is going to be in the millions. So let’s get a grip. Can you live with this?” And that’s been the [inaudible 00:15:17].
Tyler Kern (15:17):
Yeah. And I think that’s why we talked about education so much on this podcast, is that it’s about managing expectations, is about informing consumers so they know what to expect. Because that knowledge I think arms them with a little bit more just understanding about what’s possible and what they can expect as far as how much something’s going to cost, or is this a reasonable thing to think that I can have, or things along those lines. This is why education is such an important part of this podcast, I think
Joe Piccirilli (15:50):
Exactly right. And one of us things that we’ve been educating people on this podcast, and we do every day at RoseWater, is everybody talks in terms of power outages, but the RoseWater is protecting your house when the power’s on. And that’s an entirely different concept. People are not… Because look, the average power outage lasts hours, not days, not weeks. The only ones we remember last days and weeks, but the typical power outage lasts for an hour, maybe less. But protecting all of that gear while the power’s on, from poor power quality, is far more important than anything else you can do when we are living in the world of the internet of things. And as you and I have discussed in the past, when you start looking at the push in the world of medicine, and how we are going to have so many medical devices in our home that are connected to the net, so that your telemedicine interview, the doc can get telemetry on your vital systems immediately.
Joe Piccirilli (17:02):
I mean, that really changes the world. And it really, we’ve had presidents talk about bending the cost curve. Well, that’s a way to really bend the cost curve. And it is power quality because comes critical. Can you imagine getting a power glitch as you’re in the middle of an EKG that’s critical? That’d be kind of a bummer. And you can [inaudible 00:17:26] the EKG to yourself. We all have those little iPhone devices, well, those of us my age category have those devices on our, “Hey, wait, I want to make sure my heart rhythms are right”. So all of that stuff is becoming more and more critical, and the education required to get people to understand that it’s not just when power’s off, but your house, your stuff is not safe when power’s on. And it is not because the utility is not doing its job. It is the very nature of how power is generated that creates those problems.
Joe Piccirilli (18:05):
I found there was an interesting article yesterday of David Ford in the Wall Street Journal, that talked about brownouts, blackouts, and how we as a nation, if we continue down the path we are going down. Have to expect more and more of them because the more you integrate renewables onto the grid, the more unstable the grid becomes. The less you are willing to invest in the infrastructure of the current fossil fuel power grid, the more difficulty we’re going to have with the grid. So it is really protecting ourselves from when the power’s on that becomes more important. So I think it’s also a realization that’s slowly coming. Because the clients begin to realize after a while, “Wow, nothing’s happened to anything in my house, I’ve never had to reset anything”. And it’s that RoseWater device, and the RoseWater device sits in the background, usually in a mechanical room or garage, and they’ll go, we’ll get calls saying, “I forgot I had this device”, and I say, “Well, that’s why you bought it, just you forget you got it”.
Tyler Kern (19:08):
Perfect. Yeah. And we’ve talked so much about things like this, but I think that what you’re mentioning as far as power quality, power when your power is on, is only getting more and more important, as you mentioned telemedicine visits, telehealth, things like that, but also more and more people are working from home, and it becomes more critical than ever for people to have that good power equality, because they’re not going into the office and leaving their homes and just forgetting about what’s going on in their home for eight or nine hours a day. Now they’re actually in their homes, and they need the wifi to be working for important calls and things like that. There’s an expectation now that everything is just going to always work, and that’s not always the case unless do you do something about the power quality coming into your home.
Joe Piccirilli (19:55):
Absolutely correct. And it is the wifi thing. Imagine if you’re at home, you have two teenage kids at home, and your wife’s at home, and the kids, God forbid, you can do anything you want to a kid, but don’t turn off the internet. That’s the end of the world. And the bandwidth considerations and what a glitch does when you’re all at home, just full bore on the web and having devices connected everywhere, people are learning that, “Oh, we don’t want this to happen”. So it really is a great point. And I think we discussed this on one podcast. There is a trend that’s just beginning for what is called wellness home, where air quality, water quality, constantly measured, constantly filtered, there are air quality sensors room to room with the ability to adjust air quality room by room.
Joe Piccirilli (20:56):
And I think that because it dovetails into the telehealth, or health in general, is going to be another huge trend. I mean, there are a couple of companies out there that are doing it, it’s really because it is not inexpensive to do at this moment, it is just starting. But as that trend continues, I think you will see, again, more and more demand for high quality power when the power’s on.
Tyler Kern (21:25):
Yeah. I’ve talked to a lot of HVAC experts and people like that who don’t talk as much about indoor air quality as they used to. They talk about indoor environment quality, and how air quality is part of that, but there’s so many other things that can go into that, be it light, ambient light, noise, all of these other things that create an environment. And I think that that’s going to be a bigger thing like you’re mentioning, that as homes become more connected, they become smarter, we can tailor them to preferences and things along those lines, that with all the different sensors and things like you mentioned, air quality and what else, there’s so much space to grow in that area as people begin to consider the environment in which they’re inhabiting,
Joe Piccirilli (22:09):
I absolutely agree. And the point you made before, it’d be an interesting study to do, how much more time people are spending in their homes than they did two years? Because I suspect it’s up a lot. And people are now going, “Well, wait a minute, if I’m here, I need to make this an enjoyable and consistent living space”. And I think that trend will continue, because entertaining in the home was something that was done years ago, that people did it all the time with larger families and friends and neighbors. And I sort of see that trend coming back now, which is great. I mean, there are many good things about being able to entertain in your home. So I think the future is right for what we’re trying to do. I think we’re doing this obviously slowly, but the realization is coming as I see more and more national publications taking up this, “Hey, wait, we need power quality”.
Joe Piccirilli (23:07):
It is not just blackouts, because brownout is not a blackout. It means the voltages is varying, and all of a sudden you don’t have as much power to your house. So we’re seeing all of that and it is not localized. It used to be, “Oh, that’s just in California. Those people don’t know what they’re doing”, but nope, it’s happening everywhere. That’s what we’re hoping you will see, as we talked about earlier, you’ll see RoseWater introducing products that we hear from our clients that are necessary for their homes. We try and solve their problems. It’s an exciting time for us. I think it’s an exciting time to be in any home-related business. So I’m very bullish on the future, and looking forward to it.
Tyler Kern (23:57):
Well, and I’m looking forward to discussing it with you, and talking about new products, and talking about things, like you said, you have some exciting things coming up and I’m excited to cover those things on the podcast in the future. Joe, anything else you want to say here before we wrap up this episode? It’s been a fantastic conversation.
Joe Piccirilli (24:17):
Well, I really enjoyed the conversation, but I will be self-serving at this moment. RoseWater will never compromise the quality of our product. And if somebody builds a better product, it’s going to be us. So I’m going to go out on that.
Tyler Kern (24:30):
Fantastic, fantastic final word there. Joe Piccirilli, CEO of RoseWater Energy. Joe, always fun to talk to you, always great. Looking forward to the next episode.
Joe Piccirilli (24:39):
Thank you.
Tyler Kern (24:40):
And everyone out there, thank you for tuning into this episode of The Next generation of Energy. We appreciate it very much. Of course, we have lots of episodes of this show where we talk to other experts as well. I think the first episode of the show we talked to Troy Morgan back a while ago. Go check out that episode. Tons of great episodes for you to listen to, to learn more about the importance of power quality and everything going on in the world of energy these days. And stay tuned, we’ll be back soon with new episodes of the show. But for this one, for Joe Piccirilli, I’m Tyler Kern, we’ll talk to you again soon.