Brattle Q&A: Energy Leaders & Innovators
SPAN CEO Arch Rao on Electrical Panels and the Benefits of a Smarter Grid Edge

Ryan: I’ve been following SPAN with interest since you launched the company several years ago. The home electrical panel is such an underappreciated technology in the decarbonization transition, both as a potential barrier and as a powerful tool for making this all work. Let’s start with SPAN’s origins – what inspired you to start the company?

Arch: For 20 years, I’ve been working on technologies that can reduce our climate impact – in particular, technologies that solve decarbonization obstacles in our infrastructure. In order to make an impact on climate change, we must electrify our buildings, transportation, and industrial processes. At SPAN, we are focused on buildings, beginning with our homes, which contribute to over a third of all emissions in the US.

Before I founded SPAN, I was fortunate to witness the growth of electric vehicles at Tesla and contribute to the emergence of energy storage as a critical solution for grid modernization. While there, I also saw firsthand that the ubiquitous home electrical panel and the utility service to the home needed to be upgraded with increasing frequency as customers chose to electrify.

Let’s take the example of a typical household in the US; one-third of them have around 100 amps of power or less available from their utility service. In the past, this was considered abundantly sufficient for powering your home, including your largest loads like air conditioners. As we continue to adopt new appliances like solar, batteries, and EVs, and as we supplant our aging gas appliances with electric alternatives, we are redefining the models for home electric demand. Historically, we’ve tried to address this demand growth by building more infrastructure – from upsized power lines to larger transformers and sub-stations – while overlooking the humble electrical panel. The panel naturally sits at the intersection of the grid and the home, between all our electric sources and loads, both existing and new.

Electrification at the home level is possible largely using our existing infrastructure. By reimagining the electric panel as an intelligent energy management system for both the home and the grid, SPAN has unlocked faster, affordable electrification while maximizing the utilization of our existing infrastructure.

Ryan: Electrification is a widely accepted cornerstone of decarbonization initiatives. Our research found that electrifying heating and transportation – combined with decarbonizing the power supply – could reduce US energy-related greenhouse gas emissions by 70%. In your view, what are the critical barriers to realizing that potential?

Arch: I look at this through the lens of three primary barriers: technological limitations, scaling deployments, and implementing the right policies. At SPAN, we are focused on addressing the technological barrier.

Despite a growing demand for energy resiliency and distributed energy resources (DERs) like solar panels, only a fraction of US homes are powered by renewables or adopting all-electric appliances, in part because of the limitations of the traditional electric panel. The electric panel has been with us for generations, but the analog gray box in every single home today often can’t support solar, electric vehicle charging, and electric appliances. This creates barriers to electrification and decarbonization. Worse still, it offers no information or control despite being ‘connected’ to every single thing we power. That’s why we reinvented the electric panel, to make it a key asset in enabling this transition – rather than a key barrier – and the potential it unlocks delivers benefits at both the individual consumer and the energy system levels.

The next barrier is operational. With more advanced electric appliances and EVs made accessible and desirable, their implementation and deployment need to be scalable and accessible to all customers. This requires more contractors who are qualified to do installations. At SPAN, we’re working with installers to train for these types of jobs, with or without SPAN panels, because we understand how vital the role of the installer community is in our overall mission toward decarbonization. We view installers as our “first” customers and obsess over designing products, processes, training materials, and knowledge bases to support this critical input to removing barriers to electrification.

The third barrier is policy and regulation. We do have some very helpful incentives in place now, such as the Inflation Reduction Act (IRA), with a climate goal to reduce carbon emissions by 40% by 2030. However, we would like to see more programs directing homeowners and builders toward those incentives. For example, very few states currently require that new builds or remodels support electrification. Additional policy in this direction can accelerate the change we need.

While we push to make progress on all of these barriers, I am energized by the leadership we see by those ready to take action now.

Similarly, we are strongly encouraged by the building electrification law passed in New York as well as California’s SB410, which aims to accelerate our decarbonization efforts.

Ryan: Some question the power grid’s ability to keep up with electrification-driven load growth, but energy efficiency and demand flexibility can mitigate that risk. What do you see as the keys to making progress with energy efficiency and demand flexibility?

Arch: An important part of what SPAN offers is the ability to measure and control every circuit in the home. What’s unique about an electric panel is that, once installed, it’s there for 20–30 years. That’s decades of load management service and an unprecedented level of data, controls, and intelligence that can drive energy efficiency, demand flexibility, and overall efficient use of existing infrastructure.

SPAN’s own fleet data illustrates that, in a given year, most homes are likely to have about 10 hours of concurrent peak loads, meaning the panel is experiencing a high current. SPAN panels are built for these peaks, which we call “management events,” and can easily manage them without any perceptible disruption to the homeowner. If every home on the grid has its peak loads managed in this way, naturally our energy efficiency goes up.

Historically, demand flexibility has meant bespoke and relatively small load management services, implemented across fragmented devices, appliances, and programs. In contrast, SPAN offers centralized, multi-asset demand flexibility coordinated across multiple homes that can deliver on various use cases – whether it’s helping utilities and grid operators maximize utilization of existing grid infrastructure and defer distribution upgrades or helping customers avoid a service upgrade. SPAN is one of the few solutions that can enable more efficient use of existing infrastructure and infrastructure upgrade avoidance while delivering customers transparency, choice, and energy savings.

Ryan: There’s also the issue of energy affordability. In the absence of efficiency and flexibility, we recently estimated that the incremental cost of fully decarbonizing the power grid could eventually add up to $500 billion/year in generation and transmission costs alone. However, new initiatives on the customer’s side of the meter could alter that story dramatically and ensure that everyone has access to energy that is both clean and affordable. From your perspective, what is the key to a cost-effective energy transition?

Arch: While energy efficiency and demand flexibility are critical levers to enabling electrification, in an increasingly large part of the country, we are seeing costly infrastructure upgrades required at the distribution level as well. For example, a recent study suggests it will cost California utilities $50 billion to upgrade their distribution grids to achieve the state’s EV goals alone. Of the 12 million homes in California, about half will electrify and 4.5 million will need a service upgrade. Spread across 4.5 million California homes, that’s over $11,000 per home to enable electrification.

This is based on the historical incumbent way of thinking, which proposes the only way to meet greater electric demand is to build more infrastructure. SPAN provides an alternate view: investing in smart infrastructure is more cost-effective, and we can quickly make the most of existing assets rather than building new.

We envision a model where utilities are investing in solutions like SPAN that provide a win-win-win outcome for them, their customers, and regulators. By proactively deploying smart panels like SPAN to customers, utilities can reduce the cost and timeline of enabling electrification. With a smart panel, customers can embark on home electrification at reduced cost and gain increased functionality, energy awareness, and the ability to provide grid services. Along with these benefits to customers and the grid operators, states and regulators can meaningfully accelerate their decarbonization objectives while ensuring equitable access to solutions to all customers through their utilities.

Ryan: Market forces, policy, and regulation are currently converging to provide momentum for consumer adoption of distributed energy technologies. What new policy initiatives would you like to see so that SPAN and other emerging clean technology companies have the foundation to scale and realize their potential?

Arch: We need to continue seeing initiatives that help American homeowners electrify. Investments like the IRA, which provides $369 billion to reduce emissions and promote residential electrification upgrades, will make a huge difference in accessibility for millions of homeowners. Ensuring those incentives are easy to navigate for both customers and installers is critical.

Incentives are important, but they are only helpful enough to get a sector or an industry off the starting line. They have to be paired with the right policies in order to start effectively hitting goals. The $4.3 billion in IRA rebates, assuming it can offer $10,000 per low-to-moderate income household and is administered effectively, will only help partially electrify approximately 400,000 homes across the US.

We’d like to see policies that require new builds or remodels to be ready for electrification or that, to begin a new build, you must consider electrification options first. For homeowners, it should be made easier to transition to electric appliances, and there should be better awareness of policy measures to support those transitions. This might look like policies enforcing that appliances must maintain a certain level of efficiency over time.

We’d also like to see policies that incentivize more and faster workforce development to build a greater base of talent that can help enable electrification. This relates to the barriers we were talking about earlier – and although there was clean energy job growth in all 50 states last year, there is still so much additional potential for more Americans to join this effort and make an impact through their own careers.

Additionally, it’s important to emphasize that all of these policies must be crafted in such a way that they can be implemented swiftly and achieve the greatest impact on the shortest timeline.

Ryan: Excellent. So what’s next for SPAN? Where do you go from here?

Arch: Our mission is to enable electrification for all – aiming to electrify 10 million US homes by 2030. While this might sound like a daunting goal, it is more than achievable. There are approximately 77 million single-family residences in the United States. SPAN is poised at the forefront of the electrification industry, with a huge opportunity at our doorstep.

We envision a future where every home is electric, and technologies like solar, batteries, and EV charging are commonplace. This year, our priorities are expanding our line of panels and scaling our ability to meet the growing demand we’re seeing in the market. Over the next few quarters, our product family will expand to offer an electrical panel solution to elegantly and precisely meet the needs of any project, further accelerating our ability to drive impact across a wide range of home types, including multi-family dwellings. We’re excited to bring these additional options to customers, electricians, and builders so they have more choices in how to solve their energy management needs and their decarbonization goals.

In addition, we are excited about our ongoing work with utilities to demonstrate the benefits of SPAN as both an unlock for improved infrastructure utilization as well as a critical agent for scalable grid services.

Ryan: Thanks so much for your time. We’ll be tracking SPAN’s progress toward 10 million electrified homes – and beyond – with great interest!