Californians have a tough set of choices to make on home decarbonization.
They could install rooftop solar. But that’s much less valuable than it used to be for most Californians. They could also replace their fossil-gas-fueled heating and appliances with all-electric systems to cut their carbon and methane emissions. But that would boost their use of grid power in a state with sky-high and still-rising electricity rates.
But what if homeowners could predict the value they might eventually get from installing both rooftop solar and electrifying their homes? Using their own solar to power their new electric heat pumps, induction stoves, and electric vehicles could end up penciling out in ways that any one of those choices on its own would not.
The tricky part is predicting just how much more valuable this “solar-led electrification” pathway might be, said James Quazi, founder and CEO of newly launched startup Balto Energy. To figure that out, homeowners and the solar and electrification contractors they work with need software that can “accurately predict the future state and then design your on-site renewables based on those future use cases,” he said.
On Tuesday, Balto Energy unveiled a software suite designed to make that possible — its Solar-Led Electrification Design (SLED) tool. The San Diego–based startup is already putting its software’s capabilities to use with Northern Pacific Power Systems, a big solar contractor in Northern California.
Balto’s software combines data on home energy characteristics, home efficiency upgrade impacts, solar production forecasts, battery algorithms, utility tariff engines, and manufacturers’ data on appliance performance to assess each household. It then models how a variety of different combinations of products and projects will alter a household’s energy usage patterns and costs for years to come.
“The idea is, how do you calculate all the various solutions that are possible, and then allow a homeowner to search that space for the thing that makes the most sense to them?” Quazi said. Balto’s software includes user interfaces for contractors and homeowners, as well as a measurement and verification layer that’s valuable for the key step of financing projects.
Quazi has decades of experience in complex energy modeling. Building Solutions, the home energy modeling startup he co-founded, was acquired by SolarCity in 2010. Quazi served as energy efficiency operations director at the residential solar leasing pioneer until 2014, two years before it was acquired by Tesla. He then turned his attention to home geothermal energy and in 2017 launched Dandelion Energy, a home geothermal heating and cooling provider, from Google’s“moonshot factory,” X.
Now, financed with a $1 million pre-seed round from KDX, Leap Forward Ventures, and other investors, Quazi is targeting what might be the most complicated energy modeling task he’s yet taken on with Balto.
And the startup is doing it in one of the most complicated, though potentially lucrative, markets for solar and electrification forecasting — California, where the value of rooftop solar power and the cost of utility power changes from hour to hour, often quite dramatically.
Figuring out California’s funky new electric future
Predicting years of costs and benefits based on these hour-by-hour shifts is complicated. But it’s also essential, said Andrew Krause, CEO of Northern Pacific Power Systems, Balto Energy’s first deployment partner.
“It is irresponsible to do anything less than hourly electricity and daily gas models of the house when predicting electrification load impacts,” he said. “If we do it wrong, we’re setting the industry up for failure.”
In the Northern California areas his company focuses on, “electricity is about five times the marginal cost of natural gas,” he said, a differential large enough that heat pumps can wind up being more expensive to run than gas furnaces — despite their superior efficiency.
Krause has been in the solar industry since 2008, and worked on some of the industry’s first solar-forecasting underwriting models, now used to finance installations based on long-term predictions of the power they’ll generate.
But that’s fairly simple compared with modeling home energy usage, he said. “You think different roof orientations are complex? Try figuring out different R-values in the wall and different configurations of heating and cooling,” he said.
And without a strong model of how homes are using energy now, it’s impossible to predict how solar or electrification will change those equations in the future, he said.
Balto’s SLED tool is the latest in a string of software products aimed at solving the conundrum of forecasting the value of residential electrification projects. Those tools range in sophistication from online calculators and free contractor tools, which build their estimates from relatively simple question-and-answer surveys and libraries of typical household energy usage, to data-intensive, physics-based home energy modeling platforms.
The increasingly attractive economics of solar paired with home electrification have spurred a number of other companies to take on the challenge of building better models.
Aurora Solar, a well-funded startup with software to remotely design rooftop solar systems, unveiled a whole-home electrification modeling system for contractors in early June. “The move to solar opens up a lot of opportunity for electrification,” Patrick Donahue, Aurora Solar’s chief product officer, told Canary Media this month. “How do we adequately scale and size these systems to take on the next phase of the process?”
Other companies are moving from home electrification into solar. Qmerit, a company that partners with electric-vehicle manufacturers and dealers to coordinate installation of EV charging equipment in homes, last week launched its PowerHouse by Qmerit offering to expand to solar panels, batteries, backup generators, and other technologies — including heat pumps.
The challenge is to combine ease of use with accurate models and forecasts, Krause said. Simpler modeling platforms don’t provide enough certainty for institutional investors to finance costly home electrification projects, he said. At the same time, solar companies can’t typically spend the hours of on-site work at prospective customers’ homes that the more complex modeling methods require.
“The level of detailed information I’ve been asking about has historically been very expensive to collect,” Krause said. “Auditors with tape measures and blowers” — the tools used to measure insulation thickness in attics and determine the airtightness of a home’s building envelope — “do not pay you back very well on solar workflows.”
“Our industry is used to giving each customer an hour — you sign or don’t sign, and then you’re out of there,” he said. “Balto, for me, solves the data collection issues. I don’t have to go with a tape measure to each home to trust the data.”
Why utility billing data is key
That data includes utility bills, a vital piece of the equation, especially in California.
“More and more accuracy is becoming more and more important, but we want to do that with as little work as possible,” said Jeff Friesen, CTO and co-founder of Radiant Labs, a startup that makes modeling software being used by Balto Energy. “That’s where utility bills come in.”
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