Transforming Australia's Electricity Landscape with NRN - EP13

Hi , we have Alan Hunter here today from NRN and Alan will all explain what NRN has to offer , and it's obviously in the solar space . But , alan , before we always start , we have one golden rule Just to get the vibe going in the room , et cetera . Could you please touch my ball ? Yes , of course . Did you see how it kind of was flickering a ?

little bit . No , it didn't flicker .

Now try again . I want to see if I can See . So that gets the vibe going Special ball . Oh yep , Can you explain what NRN is all about All ?

started from a belief of not depending on consumers to buy rooftop solar to be able to get access to cheaper bills or make the transition to renewable . So really , what we're trying to achieve is fundamentally enabling people to access rooftop solar and battery , but without paying any cost or finance .

That's always been an issue with solar , hasn't it ? That , for example , people in a rental position can't really often get a benefit because very few landlords will buy , out of the goodness of their heart , a solar system to then give the benefit to the tenant .

Yeah , correct .

So you know , can you explain to me really how NRN works ?

Exactly the same as energy , how it worked back when it first was created . We didn't have to buy a power station to power our home . It's the same concept the power station that's put on your home , the rooftop solar and a battery system is purchased by the energy sector . We're part of the energy sector .

So you're saying I got a house and the house has a roof Yep , and then I put a solar system on the back , but I'm not paying for it . No , nrn is helping me to facilitate that .

Yeah .

Correct so far .

Correct so far and maybe I'll walk through that process . So you've got a house , you've got a roof and you want electricity to turn your lights on . You've got two methods today with our solution .

But then I pay for the electricity you pay for the electricity and then I pay more so that I own the solar . Do I ? Yeah ? So not really , or do I pay less ?

Yeah , you pay less . So the electricity you're buying will come from your roof and it will also come from the grid , so , yeah , the digital grid . So you've got to blend . The retailer will sell you that in different ways . There's different plans that are available .

You then use the electricity that my solar generates , but instead of because I never paid for the solar system , it now I still have to pay for the electricity , but the rate is lower than what I would normally get from the energy retailer . Is that correct ? That's correct .

Look , right now , our average customers are saving between $750 to $800 a year by having this benefit . We let's refer back to the terminology return on investments . This is an infinite return on investment because there was no investment required , so there is money in your pocket from day one .

So you're saying right now , with the energy retail plans that you've negotiated , the savings is around the $800 mark for kind of the average consumer . If I'm a large consumer of electricity , then the savings would be higher , would they ? Yeah ?

like . We have customers reaching nearly $2000 a year of savings from what they were paying before . And that's just . They're a very high energy user . The cost of energy has gone up by 25% the last few months . So , yeah , I think there's a lot of other factors that are showing the values of what we're providing .

Now , are there any other services and companies that do similar work to NRN ?

For those in the industry , very popular terminology could be viewed as a power purchase agreement . This isn't a power purchase agreement . This is very , very different . There are large CNI or , I guess , commercial customers that have solar on their roofs . It doesn't cost them anything and they buy the energy directly from the roof .

I hear that you give me cheap electricity bills In a cost of living crisis . Sounds like a bit too good to be true . How do you do it ?

Look , pretty much . We work with energy retailers to build energy plans that will be a cost a cheaper cost of energy for you . So energy prices have increased by 25 percent . We put a that's all energy from the grid . We put a solar and battery system on your home .

I mean tenants in the past always had really a problem accessing solar . So your system , you put it on the roof and then that electricity that's obviously in bracket for free . You're still charging something for it , but it's lower than the energy retail price and that difference is the saving for the end customer . So I'm just using a sample .

That's correct . Yeah , exactly , and that's all through our energy retailer partners . So you don't join , you're not signing up to NRN and NRN isn't giving you a bill . It's well recognized energy retailers in the market that see this as a new way of decarbonizing their portfolio and putting more renewables in the grid .

Right , so I mean normally energy retailers . We think , well , they're trying to make maximum profit out of us , so are they suddenly become socially conscious ? Or does it make a lot of business sense for them ?

Look , it does make business sense for them . I think we're at a very complex stage in our grid . We have a lot of different fuel mixes , with renewable and fossil fuels , and as we go through this transition over the next decade , it's getting more and more expensive for them from the grid .

I mean I understand that with EVs coming , et cetera , the need of the grid to deliver more electricity is really enormous and therefore also the need for the infrastructure to be built out is therefore enormous and that will add more cost to electricity bills going forward .

Definitely so . We call this a virtual power plant , so all of our systems are virtually connected together and , to put it into easy terms , it's looking at the market dynamics we have . A very volatile market goes ups and downs and it can be very reactive . And the purpose of a virtual power plant is to be reactive , to help the market in certain times .

So if there's a very hot day and everybody turns the aircon , on not off . At that point in time , your 3,000 batteries would be able to send power back into the grid . To back the grid , Is that it ? And that means we have to have less infrastructure . Therefore , the overall cost for grid expansion is going to be reduced .

This could be exactly a point . I think there's a lot of smarts that goes behind what a really good virtual power plant is . We could get to the point where we are . Through AI we are forecasting the usage of power .

So what are actually the unique selling points of NRN ?

We're changing the way that people were always expected to go and buy their energy upfront . You buy a solar system it could be 7,000 , it could be a solar and battery for $20,000 . You're paying for your energy eight years in advance or seven years in advance .

I understand that with cars and things like that nowadays , the more younger generation , they're not like us , the boomers , who had the teddy bear and we went and hold it all day and I want to own my solar system on my roof . So is that just a whole shift in thinking ?

It's exactly that . We beg the question why do you need to own a solar system ? Does it give you a lot of joy , pride and everything else , that sense of ownership ? So we are

Obviously , if I own the system , then I get the full benefit . I'm not paying for the electricity anymore , correct . But then also , if I take my $18,000 to $20,000 and I invest it somewhere , I get a return on that . That's right .

No , not really . Let's take this example a $20,000 solar and battery solution , we could save a customer right now $800 , is the average savings that we're seeing . Those customers would have saved maybe $1,800 to $2,000 if they purchased it themselves . So that delta , let's say it's an extra $1,200 difference , but it costs you $20,000 extra .

So you're saying I actually potentially get a better deal with NRM ?

100% and you just raised a point there . If you had your $20,000 and put it into an interest-bearing account and with interest rates rising at the moment , you've got an opportunity loss of what you could earn from that money and you have access to that money . You have a level of liquidity . There's no liquidity when you buy a solar and battery system .

I mean . The other issue is also that nowadays a lot of people do put the solar and battery purchase on through their mortgage , but the mortgage rates are around the 7% now yeah , correct . So if it's a 6% return that I worked out before on my $20,000 to get me $1,200 , you are actually making a lot of sense .

Yeah , yeah , and I think the standard payback period let's call it that for a solar and battery system today is eight to nine years , and maybe seven in certain if you get some cheaper systems , but let's say eight to nine If you now add our savings there and we talk about that delta from $800 , to say that $2,000 , so $1,200 a delta .

But if I'm a solar sales guy , I will try and tell you that it'll pay itself back in five years , and I hope you don't do the math yourself .

There's ethics within this game and I think energy is a very confusing industry . We're all consumers of energy , we all pay for it , but we know so little and I think it's about trusting the expert to educate us in the right way .

Nowadays we've got a cost of living crisis and at the moment you say , look , you've got a roof . Talk your landlord into it . This is one of the easiest way , at least , to get $800 to $1,000 off your living expenses per year , and for some people that's quite a bit of money . It's a lot of money . Now , but naturally everybody's gone a bit cynical nowadays .

I mean ?

what's your answer ?

Yeah , look , our answer is we work with partners . We're a partnership business . We have energy retailers that build the products . We then have solar retailers . Solar retailers play a huge role in this transition towards renewable .

From all the things I've seen in solar I've not been in the energy for 20 years . It's very seldom that I don't pay anything upfront . I get a benefit immediately . I don't have to actually worry about cleaning and maintaining , and if it doesn't work , that's your problem , isn't it ? That's correct . What happens then with the 18 cents ? But ?

No , look , it's subject to the type of energy plan that the retailer will offer you . But we actually don't get paid if a system isn't working and we get paid by the energy retailer , by the energy sector . They pay us for the access towards this rooftop solar and battery . If it's not working , we don't get paid .

What horror stories of people having purchased solar and then the company go on bust and they can't get their warranty and things like that .

This is it .

So those issues we won't have with you .

No . So we're working with solar retailers in our space . They all have an obligation to make sure that that system is working for a 10-year period . We always forget that they're not getting paid for that .

But look , I mean , there's solar systems which can be sold for $2,990 . And then there are others which claim to do the same and they're $7,000 . And most Australians are gamblers , so they go oh , $2,999 . That'll save me $2,000 a year . I got my money back in a year and a quarter . That's a much better deal than our rent . Is that true ?

No , I think the less you pay , the more you spend . I think it's always a saying in the solar world .

What you're saying . The $2,990 system will have an issue . What a year ? Two or three ?

If not before I know . Systems are getting installed and aren't even switched on and you don't know that for the next six months until you get your bill , and then you're a bit price shocked . You then try and get around to contacting the person that installed it and they're not there anymore .

So I think there's a lot of phoenix being going on in the solar industry .

I think it's a very well-known factor within this space . I think there's certain bodies that are doing a lot at the moment to try and clean this space up .

You're saying horror stories in solar ? Yeah , give me a sample .

There's times where people would buy a system and it's not even switched on . They might not even have the permission to have a system on their home . Every household has to get permission from the grid , so your local grid must authorize you to have that system . If they don't do the right paperwork , you can't get connected and your system will stay off .

system . The light on the inverter's green ?

Yeah , that should be OK If a little bit of power is flowing through , but what if one of the strings wasn't even connected ? Then I'll get a big bill again there you go and you don't know until you get that big bill and I think there's . You know we . Energy is confusing , Solar is confusing .

So if I go to NRN I don't spend money up front . I get a lower bill than I would just , naturally .

Yeah , it's starting to be honest with you , I think . Now we've passed what we call our proof of concept stage . We had to demonstrate that a customer's gonna save money , so we had a cohort of around 100 customers who tried out these systems .

Now , why should solar retailers opt for a partnership with you ?

Customers only value a system on the dollar price they're given . They don't value the service , they don't value the background of that company and everything else . So why solar retailers are interested in our solution ? It eliminates all race to the bottom . Everyone's got a fair playing ground because there's no cost for the customer .

But it's also a new interest to put good gear in . So it doesn't break down , isn't it ?

Yeah , so we have an approved product list that solar retailers are able to go and purchase . They make their own , they buy in different volumes , different quantities , and they can do that . So they have a price with us , they invoice us , they get paid quickly and I think that's .

Oh , that period is that this is over a 10-year period .

So it's the same job that they do today , but they just don't get paid for it and what this does is creates a book , a value of their business . So not only is there money or cash flow coming in , there's actually an enterprise value . If we see in the solar industry a few acquisitions happening here and there at the moment it's a very hot subject .

This could be 20 , 30,000 homes that they have to Just to explain , it means when you install 20,000 systems , you're now potentially on the hook for some of the warranty calls because you can't just send them off to the manufacturer . A lot of times you have to get involved , which is valuable time .

So we see this as a book value too , like it's there , it lasts for 10 years and it will just increase their enterprise value if an acquisition is a strategy within that business down the line . And I think this is a game changer for the industry and I think this is why we've had a really interesting reaction from the solar retailer industry around our product .

Look , I'm gonna ask a tricky question here now , because batteries do sometimes only last seven , eight , nine years . Okay , if they really had the crap kicked out of it and they were installed in a hotspot and all that . So let's make it year eight and I've got a malfunctioning inverter , and also the battery seems to be on its last leg .

No , not at all . We've backed back everything on our warranties for the manufacturers . We also only charge the energy sector at the usable capacity of a battery . So you might have a 16 kilowatt hour battery installed today , but by year eight there might only be nine kilowatt hours . That's usable because we have a degradation . We've budgeted all that Like .

Right . Could you give me an example where you have added actually really additional , extra value to a solar retailer ?

Yeah , definitely , I think , conversion rates . So we , one of our partners , were converting maybe 40% of just a customer receiving a proposal . So that's just saying an estimate . This is how much you'll save to actually signing up .

So with 10 customers leads , he sells normally four .

Yeah , so that's so , so so you know , I think standard with the industry we see between 15 and 20% . So if we think about a double of that is is a huge factor of reducing the cost of cost of acquisition , which I think a cost of cost of acquisition is a big metric or a cost point within the solar space Leads from us .

Moving on to the energy retailer , which are also the people that sent you the bills your distributors , et cetera . What's in it ?

for them . We are so advanced in Australia compared to the rest of the world with this transition towards renewable . Renewable is a variable generation source , right . So if we think about a coal-fired power station , we call this as a baseline . It's a base generation source where it's just a flat line of generation . We have variable factor .

actually . I think I got it , because what you're basically saying is people , there's the energy generator , he sells the power to the energy retailer who has their book of clients . They have to purchase it at the price that the energy retailer sets .

This is it . Yeah , and this is where the world of a virtual power plant is becoming a big thing at the moment .

Somebody had to pay to actually keep their power station on .

This is right , correct . So the generation needs to basically pay the market to take the energy .

Which is crazy .

And the way we're experiencing this . We've started in South Australia , now it's starting to see in Victoria , New South Wales and in Queensland , and it's because of the influx of rooftop solar . So in these instances the energy retailer actually wants to turn off your export , but if you are- .

But in the middle of an environmental crisis , we're creating solar and then we say , oh , there's too much . I mean those energy retailers , why the hell didn't they build batteries ? I mean , they saw the solar train coming for the last 15 years , where everybody asleep at the wheel .

Yeah , it's all about the commercial side too . It's , you know everyone . Generally you're making financial decisions , so what makes sense to them .

You're trying to be nice to the energy retailers .

So look , the energy retailers' job isn't around battery storage or generation systems we have , you know , there are the larger energy retailers that are what we call gentailers generation of retailers and they do have a . They have a mix of different generation assets than they retail .

So that's , some of them just sell electricity and others generate and sell . This is correct , so the large players like , let's say , AGL or Origin , they generate and they sell , so they're in the both business . But the smaller ones , let's make it Dodo or something like that , they'll buy from the market . They're buy just from the market . Yeah , correct .

Yeah , there is definitely a role here for energy retailers , and this is why we believe that we're providing them a really interesting solution , because they know they need to participate . Let's talk about , you know , the tier , three or two tier retailers , the ones that are actually trying to make a real big difference here as well .

Elon Musk would love to sell them a few , right , but they had 500 million a pop . This is it .

You know , and but they they're focused on spending their money on futures of energy , on hedges , on making sure that they're protected , to provide cheaper pricing from the grid .

So you tell me I put a solar system on my roof . I don't own it , you own it . That power out of the solar system that's coming out is going to be cheaper to me . So I save 800 to 1000 bucks a year and maybe down the track even more . Now let's say I have an area where there's occasionally blackouts .

You can buy the system at any time .

We want to make that flexibility there , but at a realistic price , or you put a 50% margin on it .

No , not at all At the same price . You would go and buy a system for a market that would be that price from day one , and every month it just gets cheaper and cheaper and cheaper . Right , because we think that's fair . It's been used , so you're going to pay a cheaper rate for it . We provide that visibility upfront from day one .

So if you do sell the house , you can't really give it to the new you can .

So this is the other part is that you can notvate that agreement whenever you want . We charge a small $40 admin fee is that immaterial , really ?

So let's say , after year five I want to sell my house . I now got the option to give the new purchaser and owner the option to move into your arrangement and he gets a lower bill , or if he says , oh look , I'm not the guy of paperwork and this , and that I then purchased the system at the value at the time .

Yeah , correct , we actually had someone that joined us , got a system with the intent that he's going to sell the house in the next few months , and the whole reason was that it cost them nothing .

So basically got themselves a nice front yard for nothing , meaning the house to any buyer looked now more substantial , correct ? Oh , very smart so basically , my marketing would go to people who want to sell their house . It's a solar system on the roof . Looking at 60 million bucks ?

Yeah , this is it and look I think this also goes to you know we think about the amount of new builds that are being built every year too . I think this is a great way of building developers wanting to sell more homes , or people selling homes is adding solar and battery and to the home , and I think that does appeal to the new market that's out there .

Now , after 10 years , when the whole thing is kind of getting towards the end of the sign up and the batteries obviously getting a bit older , do I own the solar system then ? Or do I have to still pay you out , or what's the story there ?

So you got a few options . You can pay it out . There is a wall called residual values for a small amount of value , and it would be in between $1,000 to $2,000 at the end if you did want to own it . We didn't put it at $0 at the end because we don't actually feel like we should give you something that doesn't work anymore .

But I mean a lot of solar systems do have 25-year warranties on the panel . So if you put a new inverter in a new battery . You should be really operating quite well Correct .

Yeah , exactly that .

Okay , let's say you start me on 20 cents a kilowatt hour instead of my 35 to 40 . And the second year or so the energy retailer suddenly decides , oh , this is too good to be true and they whack me up to 35 . Have I got any protection that actually that better rate will stay with me ?

Yeah , really good question . Look , there's . This is why we don't believe that having tying you into one like energy contract is the right way and we go refer back to a power purchase agreement or anything like that , and we think having multiple energy retailers will create a competitive landscape .

So some of the energy retailers will actually give you a fixed rate for the total period of the contract . While others might have some flexibility , as the market goes up and down and you will then down the track , there will be a number of energy retailers I can choose from .

There's always that there will be a number . There's quite a lot that want to participate and join and you know we we're aiming to have at least seven energy plans available by this time next year , which is December next year .

Okay .

How does it work , it's making sure it's available for everyone and , just to touch that point , it's around $200 a year of your energy bill . Is paying towards these rebates that are going to paying for those who can afford it ? No , look , for us , it's about democratizing .

I mean , I tell you why we got the EV . The grid actually is , at the moment , not fit for purpose . The grid needs huge investment . The solar farms and the wind farms that's going to supply power will be far , far away . The transmission lines have to be built and what we got right now is also getting older .

The sun isn't charging us more money and your spot on , like energy costs will increase . Just want to refer on that on a point 50 to 55% of your energy bill is paying for the poles and wires and the networks . We need them .

Now let's say I'm a tenant , yeah , I'm feeling the cost of living pressure , yep , and I hear about NRN . Could I then approach my landlord and introduce him to NRN ?

Yeah , definitely .

Do you talk to the landlord and explain it all , or how does it work ?

We do . It's definitely a little bit like challenging and the reason it's challenging is there's multiple stakeholders within within this relationship . But we we have had renters come to us and we've engaged with the landlord .

But what happens if that tenant moves out , then the new tenant has to actually move into that contract as a as a condition , isn't it ?

Yeah , that's correct . So that's where the little bit of complexity comes into it . Yeah , there are ways and we see a future where we could eliminate that and that's something we're working on and hopefully in the next three to four years we we won't actually require those innovations or contracts , but for the moment yes , they need a son and new contract .

But then again , if I'm a tenant and I move into the house and one of the conditions of the house is that the electricity bill is lower than in the other place , it's probably not that hard to convince you to go there .

No , exactly exactly that , and I got back up as well , correct ? Exactly that . So , yeah , there's a few different ways of doing it . The renter market is definitely a challenging one , but it's a it's a , it's a blue ocean , because it's challenging , and I think that's what . That's what we get excited about .

No , I mean solar . In the past , for Rentus has not been accessible . If you make it accessible and give benefits to the lower socio-economic people , I'm I'd say the politicians will be the drum to your door . Yeah , no , definitely .

And it has to be a collective effort . Everything we do is collective . We have we have four stakeholders that work with us to make sure this works . We have people , we have investors who buy the systems .

It's kind of funny really , because everybody of the four stakeholders you just mentioned is in a win-win-win situation .

Everyone is in a win-win situation .

I actually haven't met many products where there isn't much of a downside . No , which is possibly your biggest problem , because people go . Sounds too good to be true . That's it , yeah , correct . I'll give you a lower electricity bill . I'm not a door knocker . Yeah , I'm a person who's promising the world . I'm actually generally put in a real system on your roof .

Correct , but it's and it's because we we govern all that right . We know how much a customer's saving , we know how much a retailer is making from it , we know how much of a sole retailer is gaining from it , we know how much investors are getting .

I mean you're saying the customer is benefiting because they get cheaper electricity , the energy retailer is benefiting because they got more security . Now in the volatile market the investors who purchase the system in the first place are benefiting because there's a return .

Not , not when we consider what the cost of your power is . Going back to my comment previously , the cost of power is a majority of the , the poles and wires and the networks . There is a um . You mean bringing the solar farm all the way from wherever .

Bathurst all here that cost you don't necessarily need . If two thirds of the power is generated locally , then you actually cutting that middleman out and that's the saving that you can pass on . Is this ?

this is it , and we don't you know we don't view this as we're trying to cut out the networks . We want to . We want to work further with the networks . I think they've got a um .

let's say , um , I'm back wearing my end customer hat and I've got two 10 year olds and I'm dreaming about an EV , but I can't afford it yet . But I hear there's a model coming out that's going to be affordable in two years time . I hit Tesla is coming down with a $30,000 car . Um , and how do you size my system now ?

Yeah , good question . So we think about not having enough . There's a ? There's , we size it based on today's usage profile , um of the generation size of the solar system . Um , we are getting to a point there is the cost of energy during the daytime is very , very , very cheap .

So what you're saying is because there's a lot of solar generated in the middle of the day , our manufacturing has slowed down . We don't have anywhere for it to put . We need more battery capacity .

I've got an amazing team . Uh , look at it , I think it's . There is so many problems facing us within the energy industry . It needs , it needs innovators , it needs problem solvers to look at these in isolation and trial things . And I think you know we haven't been scared of trialing . We've trialled public EV charging stations .

describe how you influence the evolution of the energy sector .

By the energy energy sector getting more involved behind the meter . Um , behind the meter meaning anything from where your meter is to the grid , anything happens behind it . The energy retailer today doesn't get involved from what happens behind that meter . They need to in the future and we are influencing that by giving the tools to the energy retailers to do it .

There's no use for it often , um , that's why the feeding tariffs are going down .

Yeah .

And , and it just means we need more batteries .

We need more batteries and we need to control this generation . It's great We've got the generation . Um , we need to get better at forecasting when the generation's happening . I think there's some incredible companies out there doing that at the moment . Um , a cloud passes over a whole city . All of a sudden , your generation just falls off .

Yeah , I guess yeah , but to heavenly let the genie already out of the bottle by installing this three and a half million solar systems without any reference back to the grid . I mean , solar has really been sitting on the grid creating problems for it , but haven't really contributed , in its ability to be controlled , to the future solutions .

I don't think it's a government here that are really , you know , responsible . To be honest , I think we've , we , we , the industry , hang on , hang on , hang on , at the bottom part , the government is supplying the rebate .

The rebate was the result that we have so many solar systems , but there was never a condition attached to it that you should maybe buy a battery as well or have ability to control the solar system . So now we've got the electricity being generated at the wrong time of the day and the whole thing is in a big mess . Why isn't the government's fault ?

I think it's a , it's an overall , it's an overall piece of of the , the targets that we have in Australia and and you know we have the clean energy regulator that have designed the STCs , the small scale technology certificates that enabled customers to buy these assets , these , the roof top , so cheaper Battery technology wasn't where it is right now .

So are you kind of as a company , advocating for a green energy solution and for more sustainability and how you do that ?

Yeah , this is what's it's . Going back to the word collective Energy . Retailers need to be advocating further , more about the transition to renewable , but they've got bigger problems on their plate right now to try and work out how they can , how they can , provide a cheaper cost of power so they can keep a customer base .

But most people hate the energy retailer . So you're trying to make the energy retailer like becoming nice again .

Well , they have a job . They have a very important job . If we want to continue , if we want to get electric cars , if we want to go home and turn the lights on , we need an energy retailer and I don't think that we should be working against them . We should be working with them , but collectively .

Right . So how is your business model in some way kind of matching what's emerging in that whole energy sector ?

I think it's , it's complimenting and hopefully it should accelerate . Everything is happening in the energy sector . We think about the future of energy . The future of energy isn't just I generate power , I put it into the , into the poles and wires , and I turn on the light and I've delivered it . I mean the .

Right . So when you walk into an energy retailer and actually tell them about NRN , how are you being received ? Are they seeing you as a competition ? Are they seeing ? Oh , thank God , you know , I was waiting for you . I mean , what's the reception ?

Yeah , at the beginning it was like this is a little bit bizarre , but I think it's . It's Proof is always in the pudding . Thankfully , we , we , uh , diamond energy , was , was fantastic . It is still very fantastic to work with and and was . It's always been a leader within this , this transition towards renewable .

So you've been going for a while Um any customer success stories .

Yeah , quite a few Um like and and when we , when we first , when we first started to go through our proof of concept stages , we got a different , quite different range of customers . So , from , uh , a customer that , yeah , the homeowner really challenging the cost of living , um , we then have rentals that joined .

Not only do I save on my electricity bill , but if NRN rolls out a thousand systems or 10,000 system in a particular region , then you're also creating extra stability to the grid . So would that also mean that maybe future electricity price rises will be a bit less , because there's actually less need for grid expansions ?

Look , we , we , we would love to think that would be the way forward .

Um but you've got to be really big .

by then we have to really big and I think the , the , the networks are looking at this . The most networks now have a a future energy team who are exploring what different options are there instead of just spending more money on upgrades and upgrades and upgrades .

Right , wow , um , are there some specific improvements that you have as samples where people have been able to put extra infrastructure in or anything like that ? Uh , because of the involvement with NRN ? Um , little hint , I'm thinking about the MTA and their public charger , and stuff like that .

Yeah , definitely so , as , as part of one of our commercial customers was motor traders association and being within the automobile industry . Um , there is a , there was a future where the automobile industry is now collaborating with the energy industry because of the uh , the adoption of electric cars .

Or out of the battery if it's after hours , correct yeah .

Yeah , there is still a grid demand on site there , but yeah , I think there's there are different ways that we're looking now at , how we refer to looking beyond just a solar and a battery system , and I think this is going to really align with our solar retailer partners , because that's that's more work that they they're able to to to create per customer that

So if I , for example , now if I'm a car yard , there's obviously a lot of electric cars coming down the track that I haven't really been thought even how to incorporate all that . But I will need , possibly electric charging stations on my lot . So if the more , if it worked for the Motor Trade Association , it could work for a lot of car yards , couldn't ?

it Is that one of your target markets ? It's not a target . I think you know we look at the market as it's every , it's everyone .

But the MTA model was the charging station also supplied without cost . That's correct .

There was no .

So if I be a car yard , I suddenly get my solar system , I get a battery , I get my EV charger and I'm not out of pocket , and do I then make money out of the EV charger that I charge my customers to charge , or is that a complimentary thing at the MTA at the moment ?

It's a complimentary component . But what they do get is cheaper bills . So they you know we're seeing savings on that site bill $8,000 a year . So they just having access to cheaper rates . And I guess the other side of the benefit is that the public that are charging their car at that station it makes money for the energy retailer .

So what are your future plans ?

Future plans . It's about building up this network , as large you know . So we are on the road right now speaking to many solar retailers across the country .

So you're saying we're ahead because Australia has already got the three , three and a half million solar systems , which is a much higher penetration of solar compared to many other countries , is it ? And so we're learning out of that curve , that we then can put that learning to other countries ?

Correct . There's not there's . There's probably an account . On one hand , you know a lot of countries that have experienced negative market events . Europe faced it for the first time a year or two ago , you know , and I think it's just going to get worse and worse as as a solar growth and wind Right , right .

So how are you preparing yourself and evolving to face those challenges and those opportunities going forward ?

It's every day I talk to the team about . Is what we're doing today scalable ? And it's not . We don't want to just want to help one or two people , or a hundred people , or even a thousand people . We are looking beyond hundreds of thousands of homes globally . So what are we today ?

OK , so there's a big future .

There's a big future . It's a lot to do . Yeah , it's a very big vision . I think it's an attractive proposition . You see , you rightly said it's not every day we have the opportunity to to help everyone in our supply chain . Everyone in our , in our , stakeholder circle wins , and I think this is a very replicable business model outside of Australia .

What's your biggest hurdle in selling such a great proposal ?

Sounds too good to be true and and it's , it's proving it now that that people are saving this much money , that they are getting the benefits you , we always have this sense of we must own , we must own . I think that's a hurdle to like that . Do you really need to own this ? Do you need to pay for your electricity up front for the next 10 years ?

So you actually your biggest enemy is the cynic in people of who have heard other people being burned by solar and then just wondering when you come in with a great offer , they're looking for that hook .

Yeah , correct , yeah , so , and that's why we feel a great opportunity is working with the local solar retailer who is known in your area . They did your , your cousin's home and your parents' home or so forth . Like they , they can be educated about our product and they can first handedly go and promote this within their network .

And yeah , but look , I mean now to put a reality check on it . You're not promising bill free moments for the rest of your life , you're just producing a reduced bill and they people still have to pay something for it . So there's really just in the middle of cost of living crisis , there's a specific tangible benefit I can get . But it's not a free for all .

Yeah , exactly that . And I think we , we , we miss that when we go to . You know you buy a solar and battery system for $20,000 and you don't have . You have a very small bill . So you should , because you just spent $20,000 . You paid energy for the future to reduce your bill here . There's not that , there's just cheaper bill and money in your pocket .

So if you don't have 20 grand but still want a cheaper electricity bill , yours is the option Correct From an NRA philosophy . How would you describe the whole company ?

It's about fairness . I think we , we have a role to play . We have our , our garden to stay in , but we need all of our neighbors to work with us and I'm saying this is going . There are . There are different stakeholders within our business model to make this work . There is the investor , there is a solar retail , there's the energy retail and the customer .

You don't have a house , you can't benefit from solar Correct . You're breaking that mold . We are . Do you have had any solar retailer background and experience ?

As I stepped into the solar industry , I had to learn . It was about solving the end customers problem was how do we remove the cost barriers of them accessing it ? We had to learn firsthand about the customer first . So we we set up a solar retailer . We launched in Victoria as part of the Victoria Homes program and it was very successful .

So you got your hands dirty in the industry . You understood all the aspects and then you kind of remodeled it to find something that creates winner , winner , winner .

And we were very close to becoming an energy retailer ourselves and doing that aspect and it was a very clear guide to say no , it's it's , we don't need to take it on all on Like . We need to work with what's there today and partner rather than be .

The whole of Australia is at the moment hearing that we have to get out of gas and the homes have to be more electrified and all of that and I think , it's to a lot of people . It's kind of all a little bit much . Can you explain all what the plan is and what the government wants us to do ?

Yeah , definitely . I think Victoria definitely taking the first big lead in this . No new homes are allowed to have gas connection . I think that's that's a huge step

Now let's say I'm ready . You've sold me . I wanted cheap electricity bill . It didn't take it too much to convince me that that was a good idea . But what are the key terms in the contract ? You know the little fine print that I might not like . Are there any specifics that really you want to point out ?

Look you are . You are in agreement with us for a 10 year period . There's no cost for that 10 year period . It's all paid by the energy sector . The ask that we do have is that you use our solar re sorry , our energy retailer partners . I'm going to repeat that one again . Yeah , ok .

Let's say you've convinced me to go with an RN . I do like a cheap electricity bill . You didn't have to twist my arm to go with that . But in your contract are there the kind of clauses that I really should be aware of .

Yeah , look , that's . Every contract has different types of clauses , but we're very open and transparent of making sure it's very clear . The agreement is a 10 year agreement to be able to participate in our network and have the system installed . There is no cost to that agreement , essentially because being paid by our energy retailers .

In case you sell your house correct .

And then you do have a level of responsibility . You need to make sure that you're not touching the system or playing around with it , or just the normal terms that could actually cause a hazard with the system . It is a battery , it is a solar , there is power . And then the other factor , oh , within the agreement . I'm so sorry .

No , no , no . No , that's fine , don't play with it . But obviously , because you have to recoup the money that you spend on the first place for the system , you do need a certain period , like 10 years , as security , to be able to recoup your funds . If somebody decides to take your free system , go for a ride and two years later turn it back .

Yeah , definitely . And again , it doesn't cost you anything . It's being paid by your energy retailer , which I think that's the huge benefit here is sure you're going to go into place to look after the system , but it's not paid by you .

If , for whatever reason , one day I want to stop using an RN , what does a contract say about that ?

Yeah , you can buy at the system Just as you would today . You go to market . It's all market costs from day one and then every month it gets cheaper and cheaper and cheaper . We can facilitate that for you , we can make that transition very easy and again it just adds value to your home .

So I could theoretically start off not buying the system have the solar , have the cheaper bill and then one day , for whatever reason I decide , I want to give it a hug and own it . You will be selling it to me , not at an inflation price .

No , the price would normally be .

Okay , fair enough . And the day it gets onto my roof , who owns the system and who is responsible for it ?

So NRN will own that system and we are responsible for making sure it's working . We don't get paid by the energy retailer . If your system is not working , there is a maintenance contract that's set with your local solar installer to make sure it's working .

In regards to NRN , how long have you been operational and what are some of the bigger achievements ?

We've been around for . Four years ago we stepped into the industry , started to try and build out the concept , the model , of removing the cost barriers . Look , the biggest achievement has been identifying that a customer saves money and it can commercially work for an energy retailer .

With customers who've actually had real savings on their electricity bill ? Wouldn't they be shouting it off to the rooftop to their friends and all that ? Do you have a referral program ?

Yeah , we do . We actually pay them for that too . We pay around $200 for every customer that does refer and it's what we have natural growth through that at the moment , because they are seeing the benefits and the savings . So they do tell their friends , family members , neighbours .

When the system gets installed , am I up for any payment , or so ?

There's literally no cost , there's no financing , there's no cost at all .

Is there a cost to the contract ?

No cost to the contract at all .

Sometimes you do a home loan and there are all these little extra nitty-gritty fees that they drag you out of your nose .

Have you been very creative in that field . No , we haven't at all . It goes back to the core of we don't believe that people should be paying money for these systems should be given to us . I didn't have to pay for a power station . Why do I need to pay for having a renewable ?

What's involved in the installation ? How quickly does it take ?

It takes , let's say , a day for a standard installation . It's very clean . We work with very good solar retails and installers . Generally they're all-in-house installers too . There's a lot of pride in their work quality . They do have to submit an inspection form , and we inspect and audit that as well ourselves . We have another layer for the quality assurance .

Basically my savings start from the time the meter is installed . That's correct . Let's say I've got a really small electricity bill and I want to get even smaller . Overall , my consumption is maybe so low that it doesn't even justify a solar and a battery system .

Yeah , look , we do . At this point in time we have a minimum . It's around 15 kilowatt hours a day , which would be a standard home with two bedrooms which use that much . The real reason is you rightly said it's about using the energy that is generated from your system . If you're not using power , then it doesn't really work .

So when I get billed , is NRN send me the electricity bill or is it still my energy retailer who's billing me ?

No , so you don't get a bill from NRN at all . You get billed by the energy retailer just like your energy bills that you have today Exactly the same , just cheaper , which is great . Nrn is really there to help . If there's any problems , If your system is not working or you have other questions or your concerns , you can contact us directly .

And so let's say , if I'm in a certain area let's make it Sydney or Melbourne , and I'm considered going with you . Do I then get from different energy retailer their offers of what I would save , and so I can choose what would suit me better ? Is that how it works ?

That's correct . Yeah , if you spoke to one of our solar retailers , they'll give you some options about what energy retailer can offer you different prices and they'll walk through with you about how that works . So , yes , you'll be able to then compare what is the best option for you .

No , I'm sorry for the question , but what would happen to my system and my whole setup if you guys go out of business ?

Yeah , really good question . We've isolated everything in that worst case scenario . So your system is owned by one of our companies and if our operating company wasn't there tomorrow because of a certain reason hopefully that never happens your system is protected because that is then outlined with the investor who funded that system .

Okay , Now are you able to get all these benefits because you're buying your solar and your battery very cheap and you use the cheapest battery in the cheapest solar system .

No , not at all . Not at all . We use good quality systems . It is really important . If you buy cheap systems , you're not spending more money down the line . So good quality systems is key . But also , we also pay us , the solar retailer , a really good margin and a good margin , a good fee , for doing a very good installation on your home .

Because , basically , the more electricity that system generates in some way and the battery etc in some way for your business model , the better it is , isn't it ?

Yeah , that's correct . Yeah , if it's down , it's not good for us at all . We don't get paid . Yeah , we've had to put some . We've really taken the choice of quality as key in the manufacturers and products , but also from the installation component , and we have a very robust QA , so quality assurance process once a site has been installed as well .

Is there a monitoring system that comes with the system so I can actually see what I'm using ?

Yeah , definitely there is . Every technology we install during the battery of the inverter has a portal for you to track the generation and the usage from the system , which is really good , like it kind of helps you with when you want to use power or not .

I think in Australia overall , out of the three and a half million systems what people forget there's one and a half million that are really small , older style system where people look at replacing them . So if I've got a small system , what are my options to upgrade to an NRN system ?

Yeah , we have a lot of systems being removed at this point , and it is the smaller system . It's the one the two kilowatt systems . Basically , we'll remove the system . Let's upgrade it to the latest technology . There's no reason to keep it there on site . At the end of the day , you're not seeing a lot of benefit from that system .

You've come in today . I mean , normally when we have people coming for the podcast , they sell us a product . There's an advantage , there's a disadvantage . I haven't really been able to find the disadvantage in your model .

Good , it means we did our job right .

So I mean you get a cheaper electricity bill . You got the bragging right of a solar and battery system . You can also monitor what you're doing so you can kind of influence the behavior . You're helping to stabilize the electricity grid , and all in the middle of a cost of living crisis where you've been looking for something to reduce your costs .

Yeah , I think so too . I think we've set a really good foundation to how we can now grow . We haven't run at it , we've done it very slowly and learning and testing , but we're now ready to go . You've built the foundations , we've got the foundations there ready , let's build the house .

Thank you so much . Thank you , very interesting , thank you .

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