In this episode, Bill talks all things residential storage with George Kuo, the senior director of products and solutions and product management at Canadian Solar.
Ready to geek out over exciting new battery chemistry? This week on the podcast, Bill talks all things residential storage with George Kuo, the senior director of products and solutions and product management at Canadian Solar.
Learn how Canadian Solar and their subsidiaries transform the way homeowners consume and supply energy back to the grid, and how the IRA creates incentives for individual homeowners to add rooftop solar and storage.
Battery & Storage Podcast — S04 Ep03, The Balancing Act of Battery Chemistry With George Kuo, Canadian Solar
Recorded February 2023
Host: Bill Derasmo
Guest: George Kuo, Senior Director of Products & Solutions, Product Management at Canadian Solar Inc.
Bill Derasmo:
Hello and welcome back to the Troutman Pepper Battery and Storage Podcast. I'm your host, Bill Derasmo, and today I have on the program George Kuo. Welcome to the program, George.
George Kuo:
Thank you. Happy to be here.
Bill Derasmo:
George is the Senior Director of Products & Solutions, Product Management at Canadian Solar Inc. And George is going to speak to us today a little bit, I think, about the storage side of their business, even though they have solar in their name. But he's also got an extensive background in renewables, so I think we can get into a lot of different topics. George, just really quickly, you seem like a California guy. You've got UC Irvine, University of Southern California, and Stanford Business in your educational background. And then you also have an extensive career, and like I said, a lot of experience on the renewable side, and now you're into storage. But why don't I hand the microphone off to you, so to speak, and just if you could tell us a little bit about how you got to where you are now on the solar space and a little bit about Canadian Solar and their entry into the storage space.
George Kuo:
Happy to. You're right, I'm a California person. Grew up in California, beach towns. Background is engineering, did a lot of stuff in different types of electronic designs and so on and so forth. Got into the power electronic in roughly 2014 timeframe and that's how I start getting closer to the renewable. Joined Canadian Solar shortly after, been here about seven years. Been a great experience. For those of you may not be so familiar with Canadian Solar, we are one of the largest PV market manufacturing in the world. Was started in 2001 in Ontario, Canada. In some of the information that you can see from our most recent earning announcements, for example, we're shipping upward 35 to 38 gigawatts worth of PV modules worldwide or 2023. Those relatively big.
But the other part of Canadian Solar that's probably less known is we also develop solar projects and along that trend we start getting to the energy storage related products. So again, putting the most recent earning announcements we are expecting to construct in commissions about 1.4 gigawatts hours’ worth of the storage in 2022. And overall, the pipeline of over 40 gigawatt hours. So, we spent quite a bit of investments in developments in that area.
Bill Derasmo:
Well appreciate that. And in my own preparation for this, I looked at the residential side. It looks like you've got a lot of interesting things going on there. And so why don't we start off there with the so-called EP Cube and the virtual power plant concept. Maybe you could just tell our audience a little bit about the things you've got going on on the resi side.
George Kuo:
Yeah, great residential storage is a very exciting space and very rapidly growing. I think the need for some type of backup or stabilize a home energy is probably very well documented by now. With so many different acts of disasters in Texas, California, Florida, et cetera. Canadian Solar got into the space in somewhat related to our involvement in utility side, we look at residential energy as a growth path. Also, a very good complementary to the solar business that we do right as a clean energy concept. Eternalplanet is a wholly-owned subsidiary of Canadian Solar. The whole segment of that subsidiary is to develop and focus in residential energy storage. We actually do our own module design, Berkeley integrated with our power conversing systems. So, what that means is we control both the designs as well as the supply of the residential storage.
Okay. So why is that important? This product is in consumer electronic, if you will. So, you got to have stable supply. It also different type of features that make sense for homeowner. So soundless things that we look at besides your typical capacity, power output, different type of features to control your home energy flow if you will. But more importantly, how to adapt an interface with all those different array of growing features such as EV charger, diesel generator or emergency backup. And on the software side, the concept if I can just briefly talk about, virtual power. The way I like to describe this is homeowner has a way to consume energy with PV and so on. He also has the ability to supply energy on to the grid. You don't know when to supply to get a best rate. You don't know when to supply to help stabilize grid. For that you need a different entity one level up. Probably too complicated for homeowner to figure out what to do, how to sell and so on so forth.
So, the virtual power plant is through a entity that controlled the interaction with the wholesale market of the energy and buy it from the consumer, which will be the homeowner. All right, what does that mean to the homeowner? All that stuff sounds great, but what does that mean? Well, we change the conversation from asking homeowner, "Hey, you can invest money to build a PV Plus storage so we can save money." That's the typical dialogue. You able to reduce your costs, whether it's save money, how about we change our conversation to making this our PV Plus storage so now I can make money, right?
Bill Derasmo:
Yeah, that's always been the challenge. Exactly as you said, the value proposition traditionally if you put rooftop solar on or solar plus storage is okay, you're going to save a bunch of money. You might have backup power if you got a storage component, but it's always been a challenge to take the next level. But how about selling power back to the grid or selling it to the wholesale market and that's the real leap. It sounds like you guys are trying to tackle that.
George Kuo:
Exactly. So how do we get there? How do we participate?
Bill Derasmo:
That would be my next question.
George Kuo:
There are a lot of entity on the market to organize this. Our participation is making our hardware in our software transparent and interface with those entities. So, we become a qualified supplier for those entities. What that means to the homeowners when they buy our system, they can sign up or pre-sign up with those entities. It'll be directly hooked up to it. Only thing that a homeowner would need to understand is there are certain type of commitments when they're asking for energy input, you agreed to supply the energy.
Bill Derasmo:
So, you guys are an aggregator in that regard?
George Kuo:
Yes, we are. Mainly because there's different regions different requirements on so forth. It's a little bit hard for us to try to tackle all at once. Rather working with specific localized entity. It makes sense for us.
Bill Derasmo:
Well which regions are you active in?
George Kuo:
We're looking at California and the East coast, Boston and North. And then go from there.
Bill Derasmo:
And you're right about the rules being different in each region. The California ISO's rules are going to be different than say the New York ISO's rules or PJM or whoever. It sounds like what you're saying is let Canadian Solar take on that headache. You as the homeowner just sign up for our program and then we can do the rest basically. Sounds like that's what you're saying.
George Kuo:
Yeah, that's exactly what we strive to make this simpler for homeowner to agree to and less headache for an installer to try to explain everything.
Bill Derasmo:
Well, the policy makers in Washington and at FERC should love you guys because, well, I remember back when some of the past chairmen, I mean it was always this challenge about hey, how do we tie this all together? We've got great price signals at the wholesale level, but trying to get the residential homeowner to react and behave accordingly to those wholesale price signals is a challenge. Because there's a little bit of a disconnect there because you've got the intermediary of the wholesale market participant. This is a way it sounds like for you guys to connect it all together and have a way for residential consumers in essence to be responding to price signals at the wholesale level.
George Kuo:
Yeah, absolutely. So just add another compelling event for everyday homeowner to participate in clean energy, which is the ultimate goal for all of us.
Bill Derasmo:
Right, well since this podcast is focused on storage for the Eternalplanet for EP Cube in terms of the storage aspect, is the storage charged by way of the onsite solar?
George Kuo:
So that's a good question. That answer is yes and more. What make us little bit different than rest of it is we try to make the adoption of energy storages a little bit easier for homeowner. Different houses have different requirements. Typically, we describe PV only system as a DC couple into the battery and we also have what you call an AC couple. That means you can tie into existing PV that's already converted into AC into the battery.
So loosely speaking, there's a DC couple storage and there's AC couple storage. Well, EPQ can support both. What I mean is our PCS power conversion system has ability to tap directly into your PV array and the solar panel comes as DC and charge our battery. Convert that so to be used at home, but work can also tie into existing system, which is already supplying into your AC panel. Call that an AC couple and use that to interact charge and what not. And we do this by having this smart gateway concept like a flow control, energy control. I can control the energy flow from the PV into your house load or from the AC into house load or charging into the battery or in case of EV charger, drag the energy into the EV charger. So, managing all of that makes it simpler.
Bill Derasmo:
Now I understand the smart gateway software concept that I read about in your company's materials. That's a good explanation. I appreciate that. No, that sounds like if people are interested in getting involved with their homes on the residential side, that you're certainly a company they should be looking at. Like I said, you're doing a lot of work to tie together what I think policy makers want. Which is that link between price signals and the residential end use consumers. So that's all very good and exciting stuff. Well, let me shift gears to SolBank. Maybe you could speak for a minute about SolBank. We've already kind of hit the utility side a little bit, but maybe just go into that a little bit more.
George Kuo:
Sure. As I said earlier, part of the Canadian Solar's business is to develop and build solar projects and energy stores becomes bigger and bigger. Parts of it was huge pipeline, huge amount of commission and construction projects we have kind of drive us into building our own battery. So yeah, we want to be in more control of our supply. So vertically design and manufacturing battery modules for the utility size, that's kind of what we were doing the last two years. The product as results is the containerized battery system — we call it SolBank is 40-foot containers. Roughly 2.8-megawatt hours self-contained in our box fit chemistry and it has a pretty nifty technical and safety features based on our project development and construction experience.
As an example, to ensure a better longevity of a battery, we have what we call active balancing battery management system. That is to average all the different battery cells stage of charge therefore enable to have longer life type and the other part is safety. Last thing one to do is and feeding some thermal runway issues in the without control. So, it's internalized with humidity control, liquid cooling, all that different type of fire and small detections venting and whatnot. Altogether is designed in validate to be 9450A compliance. So, containments of fire within cells, a module and container and split 9450 A is for. It will do all of that.
Bill Derasmo:
Well appreciate that because the thermal runaway issue has been a big issue. But talk to me for a second about the battery chemistry. You were saying you've got some exciting battery chemistry. I think I'd like to geek out on that for a minute because we've had a lot of different approaches where we've had guests on this podcast talk about their obviously not giving away their commercial secrets. But they've gone into a little bit about their unique battery chemistry. So, I was wondering if you could do the same on that.
George Kuo:
Yeah, I've heard it from your previous podcast. There are some exciting stuff. Battery chemistry is a balance between high performance, high density and safety. Higher density typically being sited you have lower combustible temperature, your runaway temperature. So, it's kind of compromised. And I am not a material science expert. So, you're a, yes, my previous podcast sells very smart to me in that respect. For us, we are looking on balance between the density performance and the safety. And with the safety being probably a more important aspect for us, we building this large utility project. It's important. By the way, we do the same thing for our EPQ, so we use lithium iron phosphate. It's more stable chemistry, more proven. I don't think there's too much of a secret there. No,
Bill Derasmo:
No lithium iron phosphate, right? I think that's fairly well known and it's reliable based on at least what I've learned and heard about in this space. I was just curious because there's been a lot of variations on lithium ion. There's also, as we said in the past podcast episodes, we've had folks using other materials, things like vanadium, other different ways of coming at it. So, zinc, I always like to ask about that because I think there's a lot of exciting work going on in that regard. And I totally understand what you're saying about a balance between energy density, all the different factors that you have to weigh safety. It sounds like you guys have a balance that you've struck that you're comfortable with and that's working well for you.
George Kuo:
Definitely.
Bill Derasmo:
I'm curious, your background in the renewable energy space now, how has that helped you as you've tried to develop these products? On the storage side?
George Kuo:
That's interesting questions. There's always been battery, just how you charge a battery. You can charge it with a diesel generator. People do that on the off-route worlds and whatnot. What ties into it is we sell PV system Canadian as a clean energy renewable. The problem with that is only generate during daytime. What do I do at nighttime? Sure would be great to be able to store some of the energy I generated so I can use at night and also weather conditions, so on so forth. So, it's no brainer for us to get into it is well those natural evolutions of how people viewing their energy. A lot of our customers are the one that live off grid was a diesel generator and so forth. Renewable electricity sounds like a great idea.
Bill Derasmo:
A long time we've talked about the importance of solar plus storage and I know there's some, it's less prevalent, but wind plus storage and obvious proposition that hey, this is a way to firm up renewables. My understanding from the marketplace is most of the utility RFPs now for new supply, most of the use cases now are looking at coupling solar plus storage or some kind of renewable plus storage. So, it's going to continue to grow and with the mandates and goals that are out there, there's going to continue to be an explosion in demand for new resources of this type, new resources in the storage space, new resources in the renewable space. And then you layer on top of that the inflation reduction act, which we've also talked a lot about recently and how that changes the value proposition and changes how you pencil out these different projects. I'm sure that you guys have probably spent a lot of time internally talking about the IRA. I don't know if you want to share anything on this program, but that to me seemed like a game changer for companies in this space.
George Kuo:
Yeah, absolutely. So, Bill, can I ask you a question?
Bill Derasmo:
Sure.
George Kuo:
Do you have a PV system in your house?
Bill Derasmo:
I'm embarrassed to say I do not.
George Kuo:
So, what would make you consider PV Plus S?
Bill Derasmo:
I would have to look at what the upfront capital expenditure is and then how quickly I can make that money back.
George Kuo:
Right. Those cost and financial analysis are you looking for?
Bill Derasmo:
Yeah, I mean if it's close enough. I mean, I think a soft factor would be, okay, this is good because it's good for the environment, carbon reduction, et cetera. But I think I'm probably like most people, I'm going to look at the financial value proposition.
George Kuo:
How long it takes to return your investment, so to speak, right? Sure. So that's where IRA does for you. Can I help give you incentive to a salary. You return on your investments. The other part is, well, gee, do I need to worry about the whole emergency backup issue? That's another compelling event. Or the folks in Florida, like the folks in Texas and the folks in California, which I lived in, by the way, seems like we've been waiting for four weeks straight.
Bill Derasmo:
You need the rain though.
George Kuo:
And I don't have any power or holds this time. So those are good compounding events. And the other part is how to make it easier for people to switch on to PV Plus. Yes, if I can make this installation process easier, will the guide spin? Maybe a day and a half, I move 30 minutes in your garage, I will be lot easier for you to handle rather than go out of the housework. Yes. So those are the things that we talked about in how to make this product along with the education that's being sent to easier or homeowner or installer and help grow deep desire to switch it to renewable.
Bill Derasmo:
It's a great point and it's a basic point, and it's one that I'm embarrassed that I didn't even think of when I asked the question about the Inflation Reduction Act. I'm so used to talking about the IRA in the context of, okay, what does this mean for your company in terms of looking at projects, in terms of looking at the tax credit aspect for the company. But I didn't even think about, you're right, there are significant incentives now for an individual consumer. There's so much in that law. You raise a great and basic point that we probably should have talked about sooner on this podcast, which is what does this mean for the individual consumer? And you're right now I'm going to have to go back and look at the IRA with a completely different view and a completely different eye. And who knows, maybe that will be enough to get me to invest myself.
George Kuo:
Great. Join the club.
Bill Derasmo:
I assume you have a home system for your own home.
George Kuo:
Yeah, I have. Well, I'm on the technical side of the product, so there's lot of things that we want to personally experience, right? In terms of the actual installation, the tech challenges, remember I would run off bunch of nifty features we want to be able to integrate and interface with. So those are things that I was full PC on or post energy system. But yes, I do have one proud owner of the EPQ.
Bill Derasmo:
Excellent. I'm starting to see it more because Virginia passed. I live in the Commonwealth of Virginia, even though I work in DC that's where I'm sitting as we record this podcast, is in Virginia. And we had an episode on this I think two years ago because Virginia passed a law that really incented greater installation of storage. And so, I'm starting to see systems pop up in my neighborhood. Rooftop solar. Solar plus storage. It's interesting, when I drive around our region, you see a lot on the Maryland side. Because I think Maryland was far ahead of where Virginia was, but I think Virginia's catching up.
I guess my message to the audience is to think about the incentives that are now enshrined in US law at the federal level, but also think about your different states. Because as I said, it seems like now where I live, at least I'm seeing more and more of the residential solar pop up. So, it's an exciting time, like I said, the IRA aspect to this shame on us because we should have been all over the individual taxpayer incentives that we could have been taking advantage of already. So, should we shift gears here because I think we're coming to the end of our time, but are you a sports fan, George?
George Kuo:
Uh-oh.
Bill Derasmo:
I was going to ask for your Super Bowl prediction because as we record this-
George Kuo:
Kansas City, of course.
Bill Derasmo:
Kansas City. Okay. Why do you say of course?
George Kuo:
Well, because 49ers fan, we lost to Philadelphia.
Bill Derasmo:
I should have known you're a 49ers fan based on your Stanford graduate and your California background. I think the 49ers had it tough because they literally did not have a quarterback in that game. So, they were down to having McCaffrey try to run some kind of wildcat offense. Yeah, I think it's going to be, I mean, at the time that we're recording this, it'll take a little while before this goes out to the world. So, our picks will be validated by the time this goes out to the world. But I think I'm with you on the 49ers. I'm sorry on the Chiefs, I think the Chiefs are going to pull this out. Philadelphia is a good team, so we'll see.
George Kuo:
Yeah, go Chiefs.
Bill Derasmo:
Go Chiefs. All right. Well, I appreciate you being on the program today. I hope you enjoyed our conversation. I feel like we got into some good stuff, as they say on both the residential side, the utility side, talked about the IRA. Why don't I give you one last chance here. If people want to learn more about Canadian Solar, where should they look?
George Kuo:
Easiest place would be Canadian Solar website you select in North America, because we're a global company from, they're looking for storage. You got to see old options there.
Bill Derasmo:
Excellent. Well, we appreciate you being on. Hope you enjoyed your time, and until next time, we'll say thank you very much.
George Kuo:
Thank you for having me, Bill.
Bill Derasmo:
You're welcome. Thanks everyone.
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