 revolution coming out of COVID here on Think Tech Community Matters. Welcome to the show CEO revolution, Josh Powell. Hi. Aloha. Thanks. Thanks for welcoming me back, Jay. Yeah, thanks for coming back. So there's so much to talk about really, but let me let me ask you to talk about revolution coming out of COVID first. We've been in COVID there were challenges, there were opportunities. And now we're in kind of a different phase of COVID. We're in, I don't want to call it a recovery, but recognition of a new world, right? And people are getting used to it. It's kind of becoming the endemic. They're building it into their lives, their economy, their planning. And how about, how about you about revolution? What's the effect on you these days, in what I would call the second phase of COVID? Let me, let me, I'll take it in two pieces. I'll, you know, there's an operational aspect to it, and then there's the customer aspect. And, you know, the operational aspect is still, I would say a little, you know, it's inner, you know, it's a challenging business overlay. When the Delta surge hit Hawaii, that was obviously the strongest part of the pandemic for, for us. And, you know, for a period in the summer, we lost almost 25% of our workforce to, you know, they were out because, you know, either quarantine because they had it, or because they were, you know, in proximity to people that had had it. And that was pretty tough. I think for any business to lose that many people very quickly. It's very difficult. And unfortunately, all of our workforce recovered. Unfortunately, a couple of family members passed in that in the acceleration of the pandemic locally. And that's, you know, obviously devastating. It's really hard on individuals and their friends and families. And we, you know, like any Hawaii business, we kind of have a close knit, I think, you know, group of people and, and, you know, kind of our second, second Ohana. And so that I think that was pretty difficult. And we've struggled with having the right kinds of plans and processes in place to, to kind of keep people working. And I'll tell you, to be, you know, super frank, my, my attitude was keep, keep folks working as much as possible so that they weren't at home socializing and, you know, creating opportunities to spread the disease, especially early on. What we found was that a chunk of our workforce, predominantly our field workforce wasn't as, you know, as highly vaccinated as our office staff. Our office staff, of course, were already working from home. At that point, we had just started to open our offices back up. And, and then we reverted right back to working from home, but our field staff weren't very, very well vaccinated. So in late August, September, we incentivized vaccination with them. So we paid a little bonus to get your, you know, we gave it kind of a timeline frame and did that. And I think that worked pretty well. We got up to 70 or 80% vaccination from probably in the low, maybe 20, 30% before that. So we were able to kind of turn that around. And we've had, we haven't had much since. So since about the end of September, we haven't really lost too many people to quarantine, things like that. And that's really important. This is our busiest time of year. So, you know, we really want that. We've been doing testing too, we started actually, for those who didn't want to get vaccinated, we, we've been buying the the at home tests, and requiring a weekly test. And I think that's worked pretty well for us. And we thought a lot about a mandate. But we, you know, we frankly, like I think a lot of businesses struggled with that, because there's certainly people that we would lose if we imposed that. And, but I think at some point, it's probably relatively likely because, you know, the, the tests themselves have been hard to get. And obviously, it's an expense and a burden. But, but I think overall, we've managed it pretty well, our employees have but it's a, you know, it's a weekly activity. I mean, we have high level meetings about it every week. It's, it's definitely a distraction. And something you have to pay attention to, if you don't manage it, as we found out in early August, it can, it can really hurt our ability to function. You know, it's a national phenomenon going on, yeah, where people, they, they, they drop out, they say, take this job. I don't want this job anymore. I'm going to find something else to, to occupy my life. And there are a remarkable stats on that. Have you experienced that at all? No, I think I honestly don't think we've had any of that. I, you know, all our core folks are remain with us. And I don't really feel like we've seen any kind of, we've actually been hiring through most of this year, you know, businesses grown this year significantly over 2020. And then I'll kind of on the customer side, I think, you know, people have, you know, there's a range of things people have been thinking about, you know, in Hawaii, energy is, is so expensive that, you know, for just a budgetary point of view, there's a lot of, you know, it makes a lot of sense. But as you know, battery systems are ubiquitous in, in the systems that residential solar and commercial solar installers do in Hawaii. And, you know, that brings with it a lot of autonomy, you know, you're, you know, immune, essentially to power failures and helps prepare for hurricanes, things like that. So I, you know, I think that just, you know, that is still building on itself, you know, person to person, the coconut wireless, you know, friends talking to each other and, and no, you know, knowing people that have gotten systems and, you know, Hawaii is in a, Hawaii is very unique globally right now, we have an amazing concentration of energy storage dispersed in our communities. And that makes us, you know, very, very resilient. And it's also as, you know, I'm sure you've, you've seen over the summer with the virtual power plant programs that are now out there. We're doing two of those programs with our customers. And, you know, there's more economic benefit, but also really significant grid benefits. What's a virtual power power plant? So a virtual power plant takes, you know, a bunch of distributed batteries in homes or, you know, commercial enterprises. And with software, you can link and control those batteries for purposes of helping other individuals or the grid itself. And, you know, for instance, a virtual power plant would allow you to absorb excess wind energy. When, for instance, you maybe have a lot of off peak wind. It allows you to stabilize frequency. We have a lot of circuits that are sort of dead end circuits, and it's hard to manage voltage on a dead end circuit up a valley, for instance, and having a bunch of batteries and additional production, like, you know, residential solar and storage out at the end of a circuit, or even along the circuit, it makes it a lot easier to manage a voltage drop over, you know, over the run of the circuit. And so these are all kind of specialty functions that the utility would normally pay someone to provide at different, you know, usually at industrial locations. And now we're moving into this, you know, period of grid management where you can actually pay a consumer to do that. And then they can loan you a little bit of their battery and, you know, let the utility have access to it for that. But then, you know, if the grid goes down, you still have your autonomous system functioning independently in an outage too. So this virtual power plant comes from which side of the, which side of the equation, the utility side or the individual homeowner side? So it's sort of a mix. I mean, the resource, the solar and the storage is on the, on the customer side. The manager in Hawaii, we have third party managers. So there's only a, there's a few companies out there that have developed technology, software technology that can go in and help manage the batteries, communication software. And, you know, you have the third party. One of the programs we're doing locally right now is with a company called Swell Energy, a mainland company based in California that's doing this nationally. They're able to manage the, all the batteries that, you know, customers have to, it's voluntary, customers have to agree to want to do it. And then the customers get compensated for providing that. And then they deliver that service to Tehika. And, you know, there's two active programs right now. There's the Swell program that we're, we're doing with them is called home battery rewards. And it's a monthly, monthly payment to the customer for participation. And frankly, you get the payment, whether you, whether they're using the certain, you know, whether they use your battery or not, you get it. And then there's another one, the battery bonus program. And he goes administering that. And it's a single discharge every day from six to eight PM. And you get an upfront bonus payment from HECO. If you allow your system to participate that, and that's just that program's a 10 year obligation. So every day for a decade, you, your battery will discharge energy in the evening. And that's what we've been, we've probably been a lot of press about that to help offset the shutdown of the AES coal plant late next year. We're all interested in that. Now, in the swell thing, is that the revolution can actually put swell in the, in the mix that you can sort of plant swell between the homeowner and the utility. And then the, the homeowner is in contract, if you will, with either revolution or swell or both. With swell. Yeah. Yeah. So they're the intermediary. They service the system and the software, they provide the service to the HECO and then they, they remunerate the customer. Actually, HECO, the customer gets a credit on their bill for that program and from HECO. And then if, if there's excess benefit, they would actually get a check from HECO. Well, this sounds like a statement of the future, doesn't it? This is very appealing to everybody involved. You know, it's the most exciting thing we've done. And it feels like the, you know, the distributed energy business is really coming full circle. And Hawaii is certainly the first state in the US to really get there. But we're also one of the first places in the, in the world. I think I mentioned probably previously on ThinkTech, but, you know, 10% of all Tesla Powerwalls installed globally are installed in Hawaii. And, you know, that means we're really punching above our, our weight right now. We have a really high concentration of these resources. And you really can't do much on the grid with energy storage unless you have enough of it, right? You have to have a critical mass. And I would argue Hawaii is already there. We have the critical mass. And so it's really just connecting the resource now to the, to the managers. And, and he goes for that, you know, doing a good job of, of, and that's not something I say lightly, but, you know, they're embracing this, the performance based metrics that he go entered earlier this year, you know, kind of compel them to be more engaged in using the distributed resources on the grid. And we have a lot, you know, we have 30, 40, 30 to 40, you know, 35, 40% of homes in Hawaii have solar. And that's an amazing resource for our community. And this is allowing us to really use it. And so I think there's this moment of real exceptionalism happening. So I mean, I mean, it's like COVID, you know, we got to deal with COVID. But it's, there's a really exciting thing happening right now in Hawaii in terms of how distributed storage and distributed solar are being integrated to actually make our grid even, you know, stronger, more resilient, make our community more resilient, it's pretty and bring, bring all that capital back to Hawaii, right? You know, the So what about that bill that's been languishing in the state legislature to provide a credit for storage that is built on top of an existing system? My last understanding of that was that it had not yet passed for reasons unclear. But that, you know, that certainly would feed into the exceptionalism you're talking about by encouraging more people to take storage. Can you talk about that? It's so we have, we have thousands, you know, probably upwards of 35,000 residential solar systems on a wahoo that don't have batteries. And then we have on top of that, you know, probably a couple thousand commercial systems that also don't have energy storage. If you add storage to those systems, they become it does two things. The building that it's associated with essentially becomes autonomous for energy function. So in a grid emergency, those buildings are likely to continue to have energy. So if you're operating a business, you're still able to operate. But I like to think of it like, you know, Puerto Rico is the big, big contrast, right? We saw what happened. We saw how long their society was sort of just decimated. And I just think of it like, you know, I had some early experiences in the early 90s in Guam, where I saw what a couple super typhoons could do. And we've been really lucky, low, you know, knock on wood to not have a big, big, you know, hurricane hit Hawaii since really a Niki where where it's, you know, such a big, you know, such a massive effect that it really create, you know, takes months to recover. And, you know, what we see around the country, anecdotally, you know, you don't have lots of examples where, you know, solar systems have been hit by hurricanes, but we have a few we have, you know, I was just looking at we were talking about one earlier in our sales meeting today, not in 2018, our hurricane hit Florida hit Tindall Air Force Base. And there's a bunch of housing on that base that has rooftop solar on the on the homes, the base housing is really interesting that the rooftops, the solar systems remained and you could see that the asphalt shingles were ripped off the other side of the roof where the solar wasn't there. And, and so you can imagine the racked PV system actually strength strengthens the roof a little bit. It's a secondary layer of structure over the roof. So I mean, I'd argue it makes the building more resistant all by it's more resilient all by itself. But when you have a battery, plus, you know, solar alone, and some people still don't fully grasp this, but solar alone won't function unless the grid is up. And so when you add the battery, we, you know, typically when you add the battery, you're also installing an ATS and that automatic transfer switch that will cut the system off from the grid in an outage and allow it to continue to function as long as you have energy in the battery. And you know, even if you depleted the battery, it would come back on the next morning. So we want to incentivize more storage for existing systems. And it would move a lot faster if the legislature would move on that bill. I think, I think we're, you know, we've actually gotten a long ways, you know, and I'm sure people would argue, well, we're doing this anyway. Why do we need incentives? And what I would argue there is we have an opportunity in Hawaii to lead globally. And, and, you know, I was on a pbn forum over the summer, you know, with with HECO and a couple other, you know, folks from the energy community. And one of the things I hear frequently, you know, like, let's just say from the traditional sector of energy is that the technology is not there. We're not ready. We can only get to 80%. You know, you got to go slow because it's not ready. And that's just a false premise. We are ready. We have all the technology. We can control these things simultaneously. And the incentives actually help. It encourages people to do it. You know, the incentives to participate in a virtual power plant are powerful in terms of helping to bring those resources back to the grid. And I think, you know, credits, rebates, you know, this is very successful, well proven way of accelerating things. And, you know, when you think about how much money leaves Hawaii, you know, billions of dollars every year for petroleum. And, you know, at a minimum, the incentives sort of forced that to come back to Hawaii earlier. And I mean, if I'm the state, you know, just think about the, you know, the additional tax base that occurs because that that revenue stays in Hawaii and circulates inside of our economy instead of, you know, it certainly does not do that when it, you know, we're going to, you know, and if you think even a couple more years out with fossil fuels, we probably will lose our last refinery, you know, all those jobs, all that resources is leaving Hawaii. Well, let me offer this thought, you know, not too long ago, I saw a piece about how, you know, the supply line issues, including transportation of fossil fuel are now jeopardized for one reason or another. And in this period of post, you know, COVID going endemic. And if that happens for oil bound for Hawaii, we are going to have a problem because we are still largely dependent on oil. And so that is going to be a sharp wake up call. If all of a sudden, the utility cannot produce electricity, because it doesn't have sufficient supplies of oil, because they didn't get here. You think that's coming to you? Do you think it will happen that way? I think oil, you know, has always been and will always be a very volatile market, you know, in terms of energy. I mean, we we've got oil right now around $80 a barrel. You know, we saw in 2009, 2008, 2009, 150, you know, to think that that was the last peak, or that was the greatest peak, it would be a you know, I think actually, as you see more transition, you're going to see higher gyrations in oil. When you overlay, you know, the pandemic and you overlay, you know, surrealignment of manufacturing, you know, economies that come rushing back in the walls with COVID, you know, it's it's a really unpredictable market for energy and oil is not, you know, it's not site based. It requires tons of transportation, especially for Hawaii. So, you know, we're exposed to really big gyrations there. And you know, imagine we're paying for 425, 430 at the pump right now. If you just think about gas, you know, and we're at $80 a barrel, what's it going to be when we're at 200 a barrel? And, you know, I don't think, you know, I think it's it goes up and down, you know, it'll find its new peak. And that will gut the market and it will, you know, it'll come back down. Solar, on the other hand, you put it on your roof. And it's a fixed capital investment at one point in time. And it essentially guarantees the cost of that energy for decades to come. And, and, and it's getting cheaper, right? It's gotten cheaper continuously over the last, you know, decade decade and a half. Storage is doing a very similar thing. We have the benefit of the EV revolution. And so when you think about it for the average, the average person living here in Hawaii, you know, you can produce all the energy you need for your home, all the energy you need for your transportation, and you can secure all that. And, you know, for, you know, for people with, you know, single family homes, you know, low rise apartments, etc. Very, very simple equation because of our wonderful sunshine. And then, you know, you can do other things like community solar projects like that that can serve, you know, more dense buildings. And, and, you know, commercial enterprises don't have as much rooftop. Well, you know, aside from the climate change issue, which, you know, that would be another show with you, Josh, you know, going on just next week, I think in, in, where is it? Scotland? Yeah. You know, we forget from moment to moment how that is an existential threat to everyone. Oh, we don't forget. So the underlying, the underpinning of this whole conversation is really about climate change. No, if we, yeah, we don't forget. I mean, we're running a business and we have to think about all of our customers and what motivates our customers. And, you know, how do we propel that? And I think, because of the, you know, energy in Hawaii is almost, you know, anywhere from three to four times what it is on average on the mainland. So we get very, very expensive energy. And that is a, you know, that's sort of a huge market motivator. And so that's the core motivation for most people. But I can tell you, my, you know, myself and my, my business partners in Rebeloosun, you know, are, you know, we're, we're driven by, we're driven by the, the concept that, you know, we're in an existential crisis, and we need to create solutions that will help transition us faster. And, you know, I think we found a good way to do that, as many other companies have locally, you know, to fulfill the things our customers want. We got to listen to our customers, but, but we're able to find a happy medium. And, you know, we're actually able to do a good thing and, and help that transition along while, while saving people money and, and, you know, finding, finding a really, sort of broad, you know, broad agreement amongst customers for, for what drives them to want the product that we're selling. You offer the thought that as climate change gets to be higher on the list of priorities, you know, top of awareness, not only because of this conference that Joe Biden is going to and everybody's, a lot of people are going from Hawaii, you know, but it's also because climate change is likely to get worse. And the effects of climate change are likely to get worse. And that puts it more top of mind, not only on the mainland, but here. And I think that that should affect this market. And the flip side of that, Josh, like to ask you about this, the flip side of that is that we are likely to have bizarre and, you know, often extreme weather here, extreme weather that could be very damaging like Puerto Rico a few years ago. And if you in your home, or your condo, your community, whatever, you know, separate from the utility, if you have autonomous systems, like the systems you've been discussing, that gives you, you know, another, another source. Yeah. So if you if you're set up at home with solar and storage and all that, and you're also connected to the utility, and something awful happens by virtue of extreme weather, you have two possibilities of backup, one your own home, I mean, of energy, one your own home, the other utility, and that would give you a tremendous advantage in the event of some, some bad weather. In a, in a significant storm, the grid is almost certain to go down. And so at a minimum, you know, an autonomous system in your home gives you gives you some redundancy, you know, and, and it can go for days and days and days, right? And, you know, you might, you might reduce your consumption if it's cloudy and rainy whatever, but it certainly gives you gives you much more autonomy with electric vehicles that also is giving you transportation autonomy in, you know, in the, you know, in an event like that. And I, you know, to just an interesting thing to me, you know, because we have, you know, revolution was found, you know, we founded it in Hawaii 12 years ago, but we've, we've expanded to a couple spots on the mainland. So we, we see a little bit of exposure to mainland markets because of that. And I actually think the, you know, the climate effects and the weather effects are being felt more on the mainland than, than in Hawaii. And, and it's more in your face, the fires, you know, the storms, things like that. People are seeing it all the time. And we've had a kind of a mild year this year. What we don't maybe realize sometimes, I mean, the mild year here, this colder, this colder year that we've had, which is effectively a La Nina event, I think it's now been confirmed that we're in a La Nina cycle, which means the Southern Pacific is slightly colder than normal. You know, it used to be that the dominant cycle was La Nina. And every once in a while, you'd have an El Nino. And, and La Nina events typically mean, you know, more water, more, more snow on the mainland in the winter, potentially colder winter. And then we're seeing that start to manifest itself this year. But what we maybe don't recognize as much is that we're getting a lot more El Nino. In fact, that's becoming the dominant cycle. We tend to have a cool, a cool summer like this, every couple of, you know, every three or four years, we'll have a cool summer. But the rest of the years, we have a really, you know, hot, muggy summer like we did last year and the year before and the year before that. We could we also do air conditioning at Revo's Sun. And I can kind of tell, because our air conditioning business has been a little soft this year. Last year, it was a lot busier. And it was all about humidity and heat. So our, you know, we're not feeling it as much, but you're right. Those warmer years, those El Nino years, which are becoming more prevalent, also mean that we have more hurricanes in the, in the Eastern Pacific. And, you know, that's, you know, it's like playing roulette. I mean, eventually, one of them is going to hit. And the better prepared we are, the better we will do as a society, as an economy. And I think, I think personally, one of the single most important things we can do is put distributed systems into homes, because if people have their home and they have energy, then the food in their refrigerator doesn't spoil. They have transportation. If they have an electric vehicle, you know, they can, you know, they have water, they can bathe, they can cook, that, you know, it just, it makes it a lot easier to deal with an event like that. And I frankly, if your neighbor's house gets damaged, I mean, I have, I have solar plus storage on my home. And, you know, I would certainly be passing the, you know, the extension cable next door and making sure my neighbors had their refrigerator working. And I think we know our communities are going to do that. So it just makes us a lot stronger as a community to have those resources out, out in the grid. And less vulnerable. I mean, I, you know, back in the day in the first decade of the century, think tech used to examine what would happen if you woke up one morning and you had no power in your home. And it's a, it's a very long day. It's a very, it's a very difficult examination. Because everything that we do, everything is dependent on electricity. And you don't realize how you would be affected in your life. In fact, your life may be at risk, even in your own home, for the lack of electricity to drive the appliances and the devices that you have in your home. It would not only be unpleasant, it would be really devastating for people once they got into that. And I think anyone should make this examination himself. Wake up in the morning, no power. Now walk through your house. Do the things you ordinarily do, except no power. It was really be a bad experience. And it's unnecessary. I mean, we really have everything we need to be able to do it. You know, I think another place the state can really help. And, you know, there's some, you know, there's been some, some effort with gems, with our green energy bank. But, you know, really thinking about low to moderate income, you know, folks, and how do we, you know, we've got housing issues, things like that. But how do we help solve that on the energy side? And, you know, for sure, we can be reducing the cost burden of energy by adding these systems. You know, I think you can, we can think about ways the state can help with that. And a lot of it sometimes, you know, it's just financing. I mean, because you're already saving so much money, if you just have some financial support, or some, some backing that makes it easier for people with lower credit, whatever, you know, there's, there's real creative ways that can, can solve that without a lot of risk and help the whole community. You know, speaking of the market here in Hawaii, when one question that I would have for you is this back, back a few years ago, it became clear that there were a lot of solar companies, solar financing companies, as you mentioned, that had come here from the mainland. Now they were, you know, reasonably, you know, deep pocket. They could come and do remarkable things. They could be a significant player in our market. And I really haven't followed it. I'm sure you have. But, you know, what I would like to avoid if I were running the show is to have big solar companies from the mainland come here and take over our market, which is always a possibility in Hawaii. You know, it's a cargo cult thing. If, if they're from the mainland, they must be better, you know, kind of thing that happens in so many ways in Hawaii. Now, is that happening here? I would like to see us have our own, you know, sector, our own community of solar providers and in every which way, horizontal, vertical, you name it. But are we under the threat, the possibility of mainland companies coming here and investing big bucks and affecting our market? No, for sure. I mean, Hawaii, as I mentioned, is it's what, you know, let's say it's well known in the solar industry that this is one of the most advanced markets in the country. It's a small market, but it's it's it's technologically more advanced than most. And we have most most solar installers on the mainland, maybe they do 10 or 15% of their book of business with energy storage in Hawaii, almost every installer is 100%. If you looked at the top five companies locally, you'd find three of them are local companies founded in Hawaii and two of them are not, you know, outsiders that have but have been, you know, outsiders that have been in this market for for years now, too. I think you're right. We have tremendous opportunity to, you know, you know, financing locally with local credit unions, local banks. Hawaii has actually innovated in that regard, but but we tend to innovate and then kind of stop. And, you know, at this point, I'd say the financial products on the mainland have advanced beyond what Hawaii sort of did a few years ago. And so it's time for us to catch back up. There's there's still I'd say, you know, my general feeling is the solar, the Nash nationwide solar loan providers, folks like that, they charge way too much for their services and there's opportunity to to shave that down. And that's why I think the local credit unions have been really helpful in creating, creating, you know, lower fee loans is also comfort, like with the local banks credit unions that people are going to pay their their loans back on solar. And, you know, maybe 10 years ago, even five or six years ago, they're, you know, it's a new product. So it takes, you know, banks are pretty conservative. It takes them a while to get comfortable. But I anyway, I agree. There's a lot of and I really like this word exceptionalism right now in regard to this. We are in a moment that is really special. We're leading globally. There's only a few countries globally that are even anywhere close to the concentration of this resource in Hawaii. And when I say resource, I don't mean the sun. I mean, literally the amount of storage that's already deployed in homes and businesses. And, you know, if we continue to accelerate that, we will be moving much faster than most other places on earth. And and I, you know, if like me, you believe that this is actually where electricity markets are going in general, you know, it's like, you know, Hawaii might as well be the Edison lab in New Jersey at the, you know, the turn of the last century. I mean, we really are. We're in that moment. And what we're doing here, you know, what we're doing with our utilities, we're going to learn how to do things that other people are going to need to be doing for the next century. And it's exciting. Yes, it is. Josh, Josh Powell, CEO of Revolu Sun, a notable player, a significant player in the solar install. And I guess they're air conditioning also in industry in a way. Whatever our customers want. Exactly. Yeah, that's and that's what carries it. That's what makes it happen. Thank you, Josh Powell. Appreciate you coming on the show. Mahalo, Jay. Thank you.