The rise of permissionless DERs

Permissionless, in McGinniss’s usage, means anything that gets onto the grid without an interconnection agreement; he says he now prefers “plug-in” when talking to customers because it describes what the thing actually is. The physical insight underneath does most of the work in the episode. A 120-volt or 240-volt outlet is already a bi-directional connection point, and it is safe to push power into it at the circuit level, so a device using one inherits an interconnection that already exists. A conventional battery install, by contrast, means opening the electrical panel, which he likens to open-heart surgery, and it is that surgery which drags in the electrician, the design work and the utility paperwork.

The consequence is economic, not physical. Soft costs, meaning permitting, labor and customer acquisition, run at 50% or more of a residential install, and plug-in attacks all three at once: no permit under the rules being written now, no installer, and a product bought online rather than sold door to door. What is left is hardware, so the floor on distributed storage falls to the cell cost and nothing else. Conventional installs cannot follow, because their soft costs do not get cheaper when cells do. This is why he insists the category is about affordability rather than resilience. The last decade of residential storage sold resilience as a premium product; a device with no soft costs is selling bill savings, which is a different customer entirely.

Kann puts the obvious objection: the batteries are tiny, so even a cheap one can only shave a sliver of a bill. McGinniss’s answer is that small is only meaningful relative to the load it serves. A one-kilowatt battery is a large share of a one-bedroom apartment’s draw, and renters are a market nobody currently addresses at all. His evidence is Germany, where retail power at 40 to 50 cents a kilowatt-hour made plug-in systems pay for themselves purely by avoiding purchases, with no export compensation, no net metering and no virtual power plant required. Kann notes, and McGinniss agrees, that the German wave is mostly balcony solar rather than batteries, so the precedent is about purchasing behavior and the install model more than about the specific device. The same logic runs in commercial buildings through a different lever: a small business exposed to demand charges can save around $50 per month for each kilowatt of peak it shaves, which compounds across multiple locations.

The regulatory turn is the part most likely to be missed, because two different ceilings are in play. Bills introduced in roughly 24 to 30 states set an export limit, typically about 1.2 kilowatts per meter, derived from what a 20-amp circuit can carry; the utilities’ concern is line workers encountering an energized line during an outage. But a system that never exports, one that simply carries load off the grid, arguably falls outside that regime entirely, and McGinniss raises this as an open question rather than a settled one: does 20 kilowatts of behind-the-meter capacity on a 50-kilowatt peak need an interconnection agreement at all? That distinction is what lets him talk about 5, 10 and 20 kilowatt systems installed through outlets while the pending legislation argues over 1.2. His aggregate case rests on it. Against grids with 30 to 90 gigawatt peaks, he argues these resources could reach double-digit percentages of capacity, 10% or more, rather than being a rounding error. He does not walk through the arithmetic that gets there, and when Kann asks the narrower question of whether a portfolio of these devices could be packaged as capacity to accelerate a data center interconnection, McGinniss calls the example interesting and moves to the grid-wide number instead of endorsing the deal structure.