Building storage in one of America’s toughest markets with Daniel Gavrilov (Limitless Energy Co)

Hello, and welcome back to transmission, the podcast that uncovers the business of clean energy. I'm Alejandro Didiego, a market analyst at Modo Energy.

My job is to help developers and financiers of renewables understand the power markets they operate in. And today, we're looking at New York City.

It's well established that New York needs new renewable generation and new energy storage systems as well.

But it's one of the hardest places in America to actually build them. And that's where today's guest comes in. Daniel Gavrilov is the CEO of Limitless Energy Co, a company that develops small batteries inside the city.

Daniel is a native New Yorker, and he cares deeply about community first development strategy. Limitless develops five megawatt batteries squeezed onto industrial lots, rooftops, and forgotten corners of the boroughs. They connect to the local distribution grid, the part of the system that serves local homes and businesses.

Not the high voltage highways, but the neighborhood wires.

Daniel works block by block. He walks potential sites. He talks to the landowners. And he navigates zoning laws, fire rules, and interconnection costs. But this is the twenty first century.

So Limitless also leverages AI to compress months of feasibility studies in two days and make sure their projects can start operating as quickly as possible, which is no mean feat in New York City. So this is the energy transition at street level, not in open fields, but in dense urban grids where there are no easy answers.

Because the future of clean power won't just be built on giant solar farms or remote transmission lines. It will also be built inside cities. Today, we talk about what it takes to build batteries in the densest city in America, why the economics and incentives are strong but the process is brutal, and what New York can teach the rest of the world about the next chapter of electrification.

Welcome back to transmission.

Daniel, thank you very much for joining us today. It's a pleasure to have you here. The first question as always is, who are you and when did you get involved in the energy industry here in New York?

Well, Alex, thanks for having me. My name is Daniel Gavrilov and I'm the CEO and founder of Limitless Energy Co. We're a developer here in New York. We focus on five megawatt standalone battery energy storage systems.

I've been in the industry for about five years and recently started this development firm in order to develop projects under the SIR within the community.

That's very interesting. And all of the these projects that you mentioned that you're developing with limitless energy, can you tell us a bit more about those projects? What type of assets are you developing right now?

Yeah. So we're mainly focused right now on stand alone storage assets. So we're in the five megawatt range. We try to stay under five in order to stay within the standardized interconnection requirements.

If I can ask you what exactly are those requirements, can you Yeah.

So it's a it's a state pushed streamlined interconnection process that if if your projects are under five megawatts, it allows you to go through a much more streamlined interconnection process rather than having to go through a large utility scale bulk storage interconnection process, which requires a lot more a lot more things.

Okay. I see. Well, that tech is one of the big problems right now that we're seeing in a lot of markets, the interconnection queue. Do you have any references of how much time it can take through this process compared to the the standard process here in ISO?

Yes. So we're really focused hyper locally on the five boroughs and the interconnection queues that are going on here. Yeah. So we're focused on the different nodes that are in the area, and we're monitoring currently, there's about sixty to seventy in the pipeline, in the queue, in that range. And, you know, we don't suppose they'll all get through. But as of now, only about four to five hundred megawatts are on. But we're monitoring it very closely.

We take AI and we analyze it and we always keep track of the costs of interconnection. So we take all sixty seven or seventy, and we put them, you know, kind of on a on a graph. Yeah. And we and we we know what our outliers are.

We know what the low side is, and we find medians. And that's again how we determine feasibility. We look at precedent, and we look at what's going on currently. So we're roughly at twelve to thirteen months

For permitting. So, you know, that's what's going on right now in the interconnection queue.

Okay.

So usually, average time of twelve to thirteen months for permitting, but also getting the approval and the So it could be it could be longer Yes.

Depending on it's all site specific. Right?

So if a site is by the water, you know, if the site is by wetlands, number one is safety.

Right? So the FDNY has to be comfortable with the site.

And then, you know, we have to go through the DOB and then of course, interconnection depending on the site. Again, it's site specific. The upgrades required, we go through the Caesar process with Con Edison. That process should roughly be around four to six months and then we understand what the upgrades will be required for us to interconnect and we get our interconnection pathways. And then sometimes the lead time for that equipment could be a couple months. So we really budget about twelve months for predevelopment, twelve months post, right? So zero to COD, twenty four months is our goal.

Okay. I see. Thank you for sharing that. Just to give a step back and come back with a very simple question. Why did you choose New York among all of the places in the U. S? Why are you developing in New York?

And what makes the New York power market so special?

Yeah. So that's a great question, and it's a it's a mix of things. So number one, first and foremost, I'm from New York. This is where I'm from.

This is where I'm born and and raised. And when you're developing this type of, you know, community scale distributed generation assets, that really that really matters because a lot of it is is on the groundwork. And being from the community is something that is really driven me to to this market. The other thing is that we are, you know, out of the entire country, I think New York is one of the highest cost per watt, you know, in the in the in the country.

So you have a highest cost per watt. You have the most incentivized local state. Obviously, federal is still there, but local state governments.

So that gives you the highest delta for your projects. Right? So all of you know, anytime we do a project, if you're developing renewable energy assets or energy infrastructure, you're always trying to find the areas that need it most and where the most value can be created. Right?

So when you see the high incentives, high cost of power, you could the pain is is higher here. So the market is very is very, very strong here. I would say the only side is is the difficulty in permitting and stuff like that. But we're, you know, solely and solely, we're getting through that.

Yeah. We'll jump into more permitting questions very soon because it must be very tough to develop in New York. But going also into the renewable mandates that exist in New York, is it another driver of why you are developing here? So if I can frame it this way, New York has big renewable mandates, but serious grid constraints, you just mentioned, with upstate and then New York City, even Long Island, where prices go up crazily.

Plus, we see renewable mandates coming from local level, state level, even federal. But for New York, it's especially important the local and the state level. What does that mean in practice for developers? Are those obstacles or drivers from your perspective?

The main drivers here are policy. However, policy can only go so far. The grid is the grid. It's a hundred years old.

Right? So while the mandates are good, we also need the ability to develop on these in the in this grid. So us working together with the utilities is how we get this moving forward. And we are, you know, we're doing a lot of work with them and and we're pushing this across pretty well.

You know, over the last decade, this whole sector has tremendously, tremendously advanced, and we're at a point right now of breakout.

Okay. I see. You mentioned before that you're developing five megawatt battery sites. How many of them? And what else can you tell us about them? Jumping into details like how they what they look like, where they sit, and why those specific sites for those batteries.

Great question also. So The big biggest part of developing here in New York under these urban constraints is siting. Right? So site selection is the, you know, the the main part of the business, in the beginning.

Getting on the ground and speaking with the business owners, the property owners, creating those relationships, validating yourself and your company, kind of making that community outreach that we do. The way we develop is we go to the community first, and then we ask them, okay, guys, where would you like us to cite these things? And again, we know the zoning code. The zoning code allows for different things, but we wanna you know, the way we're doing it, our philosophy is we're trying to develop these things out of sight, out of mind.

We wanna develop as of right in manufacturing zones where it's the easiest without the least. We do not want to make people upset. That's not what what we're doing this for. We're trying to help the the community.

And just one of our sites, right, you're looking at four to five thousand houses during peak that it can cover for that four hour period, and we can get to that. But normally, we're looking for underutilized land. We're looking for back alleys of outdoor storage, big parking lots to be part of that, you know, in the back, really places that you can't really develop anything else on.

Yes.

And and for us, that's that's where we can usually make the most value and most impact, especially if it's in the areas that that that that also complement the grid because we obviously wanna put these in in areas that are most beneficial to the the individual nodes in the grid. But, yeah, other than that, I mean, a lot of community engagement, a lot of on the ground site selection, you know, the you know, kind of like the old school way, but also but also, you know, going there yourself, making the deal, explaining to the landlords and to the property owners, giving them the education. So, like, one thing that with us landlords and and these and these brokers and property owners love is that they always tell us, like, you're the only ones who ever educated us, actually.

Right? So to me, I take pride in that. Because I I'm not a salesperson. I'm an educator.

Right? So when when when they say thank you for the education and then proceed to wanna work with us, that's the kind of people we like to work with, and those are the kind of those are the kinds of deals we're looking to do. So right now, we are currently greenlit by our investors. We have a private investor group.

You know, we've already created our holding company, and we're greenlit for ten five megawatt projects. We're currently in different stages of the of development on four or five. And, yeah, I mean, we hope to hit our ten target by the end of the year in terms of having them, you know, in the pipeline. And from then on, I mean, we're looking for partners to expand with, you know.

I see.

Yeah. Yeah. That's you mentioned something very interesting, which is that you follow a bottoms up approach. What I mean by that is that many people might think that developing energy price is basically taking a decision from an office and then seeing that the price being built. But all of the things that must happen in the field for that project to actually materialize are completely missed many times. What is your actual step by step guide to approaching a new community, for example, or a new site, a parking lot that you just mentioned before? How does that actually look like in real life?

Right. So first, a lot of data and intelligence gathering happens where, you know, you're where you use various property intelligence of databases and softwares to really determine what's, you know, behind the hood.

First and foremost, what the zoning is, what the use case over there has been in the past, how is the what's the proximity to the infrastructure, what's the proximity to feeder lines. I mean, there's a lot that kinds of that that goes into it, our prefeasibility study.

Yes.

And then after that, we look to engage the landlords or through their conduits or you know? But most of the time for our projects that we've been more or less more successful with, we've been developing them hand in hand with the local EDCs, which, you know, I'm not gonna name names right now, but some very nice local EDCs that have been helping us and working with us.

Could you quickly explain what EDC means?

Yeah. Economic Development Corp.

Okay. Perfect. And what is their exact role here in New York City?

So there's different EDCs around the city. There's New York City EDC, and then there's Staten Island EDC, and there's different EDCs. They they're pretty much and I'm not the EDC, so I don't wanna speak on behalf of them, but they're essentially in the city to help economic development in certain parts of each borough.

Okay.

So they're really boots on the ground with the communities. They know their communities best. Yeah. And because we've seen how things have played out in in the industry, especially here hyper locally, we're, as developers, wanna wanna kind of nip that in the bud early so as to not have to deal with that later. It's just one thing that we have to, you know, nip in the butt earlier than later because it comes up anyway.

Okay. I see.

I didn't tell you how they look, but these projects are essentially imagine shipping containers

With some transformers fenced off in about ten thousand square feet. Okay. So every five megawatt site is just imagine asphalt, ground level, ten thousand square feet, fenced off. You have firewalls around it. And you have access, twenty four seven access, but also twenty four seven security.

Heat sensors all throughout. It's connected to the local fire station. The safety measures and the compliance measures are some of the highest in the world.

I can imagine. What are some of the typical places where you would develop them? You mentioned before parking lots. Are there any other target zones that you usually go for?

Yeah. So, like, we like to we wanna develop as of right. Yes. That makes it easier for the permitting process.

So if you look at the map in New York, as of right, m one through m three is mostly by the water or there are a couple corridors throughout the city. Right? Throughout the five boroughs. But it's limited.

Right? So you don't have all the areas in the world to develop. You can go and develop in some resi areas according to some, you know, loopholes that do exist, but we've chosen to make that pledge and say, you know, we're gonna do this out of sight, out of mind because we think that that will be the most effective.

Quick break. If you listen to this show, then you probably work in energy. And at Modo Energy, we're not just talking about the energy transition. We help our users to actually make it happen.

All energy storage, solar, and wind assets on the global balance sheet need to be valued and benchmarked, and that's where Modo Energy comes in. Our benchmarks and forecasts are transparent, bankable, and trusted by the world's leading banks, asset managers, utilities, and developers. So if you want to learn more, go to modo energy dot com. And if you want more content like this, sign up to our weekly dispatch newsletter.

Enjoy the conversation.

So you're basically developing these batteries in New York City in the five boroughs.

Yes. Suffolk County as well.

Okay. Suffolk County.

So now people, trying to understand this. This is one of the highest density areas in the world, with the highest density of people living per place that exists in the So what are the main challenges that developers can face in the city that you wouldn't think even think about it or that developers in the middle of the Midwest wouldn't have when developing these projects?

So I would say DOB, FDNY interconnection, all of the above. Right? Because we're in New York, we're dealing with, like you said, a very dense population. The FDNY has very stringent measures, but this is all sort of new over the last couple of years.

And FDNY is Fire Department of New York. Exactly.

Yes. They're the greatest. And we love them very much and we respect them. And we understand their concerns. You know, we've we know that there have been fires in the past, but, you know, I like to make this analogy like, you know, you if you think about it, you have lithium ion in your pocket, in your phone.

There is lithium ion batteries flying at eighty miles an hour up and down the highways every day in in electric cars. Right? So when you think about it, I think there's a big misconception about how you know, about the safety aspects. But we don't you know, in New York, we develop at the highest safety standards and we'll, you know, we'll wait and work with the FDNY for as long as it takes.

We understand that this is a, you know, this is a very meticulous process, but we have the we have the will and we have the people on our team that have experience with this and are and are, you know, are are moving forward and happy to do this with them. So we we welcome working with all of these, you know, all of these players and and and being able to communicate. It's it's really all about communication. Right?

So and everyone wants to communicate. It's just when when things are new, things are new.

I see. So this is about the fire code and and dealing with the FDNY. Yes. What about the other two pain points that you mentioned before? Well, we already talked about interconnection queue before, DOB.

Yeah. So you have the the DOB that's getting your building permits.

So when it comes to the DOB, I mean, ask anyone. The New York City Department of Buildings is notorious, you know, around the country. I mean, imagine going into a small town, buildings departments where you have, you know, a a nice secretary helping you going into her cabinet, pulling out files for you or going into New York City building department where I mean, think of how much construction development goes on here. Right? So much bigger city, much more rules, much more safety measures because of how many people are in such a condensed area. A lot you know, it's it's it's just it's it's more challenging than the rest of the country.

No. I can completely imagine.

And then then Con Edison, which is the interconnection. So it's a three part FDNY, DOB, FDNY for safety, DOB for billing permits, and interconnection with CONNED.

So the CONNED interconnection process and the Caesar in particular, you know, we are working with a aged grid. Right? We're working with aged infrastructure.

So there are a lot of upgrades that, you know, the grid needs upgrading. So really, it's those it's it's the upgrades that are unknown when we when we start in a lease.

That's kind of that becomes a little bit challenging. You know, obviously, we we have we do it in a specific way to to to risk mitigate, and we try to engage Con Edison and the utility, you know, as much as possible to really determine what's needed here and and determine feasibility Yes. You know, sooner than later because we're developers and they're the utility.

So So it must be very complex to develop here so that people can have a sense of where they could find these sites.

Are we talking about a battery site, for example, in thirty fourth Street next to the Hudson River? Or where where or in in in Brooklyn, Queens, where do you usually have those sites?

Ideally Yes. Like I said, manufacturing areas around New York are typically either by the water Or in tight corridors inside the city. So hopefully, you wouldn't see them really a lot of of the of the time. There are a couple that have come up around some residential areas, and that's really the only kind of opposition to this that that, you know, the industry in New York has been getting. But, again, you ideally, wouldn't really be like driving by on the main street and seeing a pay that that's a battery site on the side of the road.

You know, it's electrical infrastructure. Like, do you notice the telephone poles when you're driving by them? Do you notice you know? No. No. No. So it's it's it's supposed to be sort of you know, it's supposed to be like that.

Yeah. Absolutely. So that people don't have any misunderstanding when they think about developing batteries in New York City.

These are usually well hidden and even with high safety measures as you mentioned before. You mentioned before that you were sending constant signal to the fire department. What other safety measures do you implement in your projects to make sure that they keep safe?

So it's vast. I mean, I've it's probably better for my safety expert to analyze that because it's you could probably write a book on it.

Yeah.

Right? So I mean, it's everything from fire pathways to thermal runway and out, you know, to, you know, anything you could that you could think of. All the UL certifications. You know, I could go into details, but it'll bore you. But I'm talking about the most stringent safety measures in, I would say, the world. So, you know, a lot of the a lot of the misconception of this stuff is not safe. I mean, there is nowhere else in the world that it's safer than here.

Okay. Great.

So with all of this that you just taught to me, what is one of lesson that developers from other parts of the US can take with them, especially taking into account all the challenges that you must face here in New York to develop?

New York is a very unique situation because of the grid.

We all know that there's only a few grids throughout the country that can accommodate or that where this where this type of infrastructure is needed and is valuable. So I would say, always look at value.

Where where in the country, where throughout this entire electric grid can we go and provide the most value?

And that's really, you know, you back into value, you always win.

So I would say, look for where the most constraints are. Look for where it's needed most on a community level.

On a community level. Not a macro broad, maybe the whole state or on a community level and and go that route. I mean, unless you're gonna do bulk storage and stuff like that, which is a different part of the industry.

Well, I can imagine that a lot of developers will be very grateful for that piece of advice, so thank you for sharing it. You mentioned before that your batteries are connected to the distribution grid.

Does that mean that they are front of the meter or behind the meter? And why state in any of the two sides?

Our development company, we're developing ten standalone front of the meter battery energy storage systems.

We have looked at and we have clients that come to us for behind the meter.

It's two very different models. Right? So front of the meter model is a real estate development play. And then behind the meter is kind of like a service play for someone who, you know, your your the financials are based on savings.

Right? So very different models, but they're both very much needed. Right? So also behind the meter, because you have indoors, fire department indoors, they're a lot harder to to to get approved indoors.

So, look, from where we are now today, I'd love to see more behind the meter. I'd love to see bet, you know, more streamlined approaches to be able to help all of these buildings that have these astronomical demand charges deal with those. There is a ton of value there throughout the grid and and throughout this the city, but it's all gonna come down to how fast can we safely streamline this process, right, and get these things installed. I know the state, NYSERDA, every you know, everyone's working towards a safer, better, more streamlined way of permitting that has better communication where people feel feel comfortable, where the community is more engaged, and I think that's where we're headed.

So, you know, I have a bright outlook on how things will change, but I really love the behind the meter, you know, commercial energy storage, energy as a service model.

I really you know, I wanna I'm we're looking at that right now. And if we can get the time down to the right we know you know, to the right time frame to execute Yes. Then it could be it could be very viable.

And that's where we get into, you know, VPPs and all that stuff, but we can save that for another time when we talk about technology.

Agree. It's opening a really big door.

Right. Yes.

So there's a lot of interesting technology we're looking at and working with Yes.

You know, how to maximize the actual distributed asset, the Doctor asset. There's many ways that AI can help optimize, so we're looking at that. And then, you know, we're we're we're wherever we can take a a smart base model and augment it on top of data, we're we're testing it.

Okay. We'll jump into AI a bit further down the line Just to bring a bit more color on the behind the meter in front of the meter here for the audience.

How do revenue stacks differ for both configurations? Is there a big difference here in New York?

Yeah. So, I mean, you have the behind the meter is based on savings, and the front of the meter is based on revenue.

And if you can bring more color what you mean by savings for the audience.

So when someone installs you know, when you do a behind the meter system, that is essentially think of it as, well, behind the meter, behind someone's meter. Right? Meaning that meter directly will benefit from from this this asset.

So when you're looking at a behind the meter system, you're looking, number one, what are you trying to solve for behind the meter? Right? So, like, what you know, if you're dealing with a warehouse, you're dealing with supermarket, Number one, what is their what's the demand that you're trying to solve for? Right?

And then you you size this system based on that. Right? And you're basically the value of this system to the banks, to the client is based on the savings. Right?

So these these behind the meters make sense for so there's a certain type of building where if I mean, if you have a, you know, if you have a commercial meter and you're you're using over five hundred kilowatts a year in demand and demand makes up forty to seventy percent of your bill, then you're a candidate for a behind the meter. Right? We're so, you know, it's it's it's a savings play and that those savings, yes, translate to revenue.

But when we're talking about front of the meter, we're talking about just a standalone where the real estate developers, where the asset owners, and, you know, it's a revenue play. So it's not necessarily a savings for a particular meter play. It's it's a it's a it's a revenue play. So the so that's the difference.

And a revenue play is much easier to, you know, create performance on and to project out than a savings play. I see. And what A savings play becomes difficult to kind of bank, you know? Because say, you know, what if this person uses less this year than right?

It's it's difficult.

Whereas generation is much easier to Predict and maybe it's much easier to calculate Yes.

And predict. So the value is much is, you know, is is for what's currently going on. The value you can underwrite in a different way, in a in a better way on front of the the meter than behind the meter.

If that makes sense.

Yes. Total sense.

Because you have revenue versus savings.

Yes. And when we look at front of the meter, which is what you're doing, what different revenue streams do you have in your products usually?

Yeah. So we we're not bidding into the wholesale market, and we're not fully veater. So we're kind of somewhere in the in the middle where we're participating in, you know, with Con Ed as the off take in a community level distributed generation programs. Right?

To where we are when we run our models, there's two models that we run. So we either run DRV plus capacity, or we run optimized Veeder. So, you know, we run we you know, they're kind of I wouldn't say they're nothing proprietary, but the way we do our analysis, we determine what is the most optimal stack. So either DRV and capacity or Veeder optimized Veeder, which could mean ancillary optimized veter essentially means you're charging when the electricity off peak, you know, from, like, twelve to four.

You're charging off peak because the New York State rejects almost fifty percent of what's tendered to it off peak. But then on peak, they're ninety nine percent. Right? So that's that's what you're essentially taking and storing for when it's really needed during the day, and then you're providing various community level, the the RV demand response, some ancillary services.

You might be supplying peak shaving to a direct customer, you know. So it it it's much more of a impactful and it's much it's much more even though it's hard to project anything besides Veeder Because everything else is, you know, is is just on Veeder, optimized Veeder.

We're, you know, we're pretty comfortable.

Just a quick break, Daniel, so that then we don't lose anyone in the audience. What does VITR mean? What does it stand for?

Yeah. So VITR means value distributed energy resources. So that replaced net metering in New York, and it's a pretty much a tariff structure by the utility to compensate you for the amount of energy you put in into the grid.

Okay. Great. So you have told me about all of the different steps that you take to develop a project.

So once you have all the permits, you have the interconnection queue approval, what next? Do you just basically sell that project to other people so they can finish construction and then operate it? Or do you finish the construction and then operate it by your own?

Right now, we're we're considering different options. Also, because this is very new kind of thing. As we're approached by different players, we're determining whether it's best to, let's say, get to NTP and then sell to a long term holder developer builder or bring on the right partners and build, own, operate these ourselves for the long term. Our current structure allows us to do that, but we like you know, we are looking you know, we are considering different options in that in that regard when it comes to growth and funding.

Okay. Not clear yet. You're open to everything. We're open. Okay.

Obviously, site specific depending on how long we see permitting interconnection being may necessarily not be for us, but maybe for someone else that that would that would like it as a little bit of a longer time frame. So in that case, would say we would we would look to sell to someone that would have that type of viewpoint. But you know, we are looking for partnerships to develop these, and we were greenlit for ten right now. But we have the ability to do more with the right partners.

Okay. We have been talking a lot about batteries so far. I know that you're also involved in other business areas, which are commercial solar and energy advisory.

What exactly is what you offer, and how does it fit with the storage development, like, of your business?

We're in the commercial real estate world in New York City because we do b to b energy, solar, stuff like that. So being in this space for the last however many years, we built relationships with landlords, developers. And right now, when there are a lot of you know, there's different mandates, local law ninety seven, there's benchmarking. They kind of, you know, come to us for this this type of work because we're the trusted source for for the energy stuff.

When it comes to the consulting, it's we don't really I wouldn't say we're we're out there advertising that. We're more just, you know, we get asked by private groups and groups that that need to get certain things done within their energy management. And we'll come in and we'll do tailored stuff with them because we just know the industry. And then, you know, coming in to do the the the remediation and, you know, once we've once a benchmark or or or local law person comes in and does their analysis, there's recommendations after.

So we we are, again, behind the meter solar EPC.

That's our our build company. Right? So that's been our experience in the past. So, you know, we find that solar does does if it fits, it fits.

You know? If it doesn't, it doesn't. But we're more we like to come in and educate. Right?

So we believe that the way in with these level of people and these type of people is to come in and educate and be a resource to them. We don't come in and try to sell anything. We're coming there to help. A lot of these relationships are long term relationships, so they look to us.

We do their energy, you know, advisory.

We we help them, you know, anything energy related in their buildings. We either can do ourselves or we will bring in the right people to do it. And, I mean, commercial solar is great. I mean, you know, there is some federal headwind that that that was, you know, recently happened.

And, you know, but that shouldn't the actual if you look at solar energy and Elon Musk talks about this all the time and a lot of of people do that, that it's the fastest way to get energy online. Right? So putting up solar panels and plugging them into it's the fastest way to produce energy. And it's also one of the cheapest ways.

So, yes, the space constraint, you need a lot of space to make it meaningful or impact you know, super impactful. But other than that, I mean, I think solar energy is an amazing technology. And I think it will continue to be a part of future renewable energy generation. I mean, look at China.

You know?

They're leading the world in solar generation.

You know? So I don't think solar will go anywhere. I think that the industry will get more sophisticated and a little bit cleaned up, which, you know, some argue may I mean, needed to happen.

But, yeah, I have a good outlook on renewables just because look at supply and demand.

I mean, the the demand for electricity, electrification, AI, data centers, a Google search. I mean, a chat GBT searches ten times as much energy as a Google search. I mean, just these basic supply shock situations that are coming to us, the the you know, it's important we can get any electricity we can produce and get online should be not put to the side and solar included.

You mentioned before local low ninety seven. What does it mean? And and why is this a driver for demand of your services in New York?

Well, I wouldn't say it's a it's a driver for our business. I would say, you know, it's a it's a local initiative that is getting landlords to kind of look at their building from a different lens, from a lens of how much energy am I consuming here. At the end of the day, it might seem punitive or it might seem, you know, but really if you do it right, you'll end up reducing your expenses on your building and increasing your NOI. So if you can get past the whole, this is a penalty and and get to the place where you've you've you've accepted that, you know, we're moving towards a high electrification, high demand for electricity environment.

And you making these changes now are gonna be super beneficial to you, your bottom line for the future. I think that's that's where that's the the disconnect. You know, to make it from something punitive into something I mean, something that seems punitive into something that is like, we're helping you help yourself. And I know it doesn't seem that way, but in in in some instances, you know, it really does.

So, I mean, we we local law ninety seven has been a thing for many you know, for a couple years. Just this year, the I believe they're trying you know, I believe the fines are starting, if I'm not mistaking, next year or the you know? So now we're the pain, I guess, is starting to be felt because, you know, when you're just being told something and you don't actually get the bill yet, you're not really feeling it. But now they're you know, when landlords are seeing these shocking, you know, penalties, essentially, burn burned money.

It's not credited towards your electricity. It's it's penalties. And they're essentially in a constricted financial situation regardless right now because of high interest rates And, you know, just the inability to raise rents as much as you'd like to. And and, yeah, I mean, the only way they can really help themselves is reduce their expenses.

So, I mean, this kind of blow to a building, they don't want it, and we don't want it. You know? It's it's not good for for anybody. But but what what we'd like to do is we'd like to educate our our our landlords on why this is good for for you and re and reframe it.

And reframe it and look at what will this do to your bottom line. Speak to them in in their language. They don't wanna hear about emissions and all that kinds of they wanna hear about NOI. What will this do to my property's value?

When I go refinance, what will my NOI be? That will be what my loan's based on. Right? Rent's not easy to increase.

Right?

Expenses. The only thing you can can mess with are expenses. Yeah. So reducing them, I mean, it's a direct impact on NOI. And most people don't realize that, you know, in New York real estate, every ten thousand dollars in NOI is two hundred thousand dollars of value on a five cap.

Call it a six, seven cap, a hundred seventy five thousand. Right? Ten thousand dollars a year on a five cap is two hundred grand of value on an NOI.

And, you know, so when when you when you go to the bank. Right?

So, again, most people, you have to speak to them in their language. The landlords usually have been approached by not necessarily the best or the brightest that have been able to speak to them in their language.

And I find educating them is the best way to get it across. Yeah.

So what you just mentioned raises another question for me, which is looking onto the cost side of developing commercial solar, but also your storage products here.

Yeah.

When people think about New York, they think about a really expensive city.

Yeah.

Go for a beer here. Go for a burger. It will be four times what you can pay in another city. Does this translate to the same price increases in developing commercial solar storage here? And how does that compare to the rest of the world?

Yes. I mean, you could just look at the averages. Right? It's a it's a lot higher to develop here.

Number one, in the US, soft costs are higher than in the rest of the And with soft costs, what do you mean?

Soft cost meaning design, permitting, like the actual labor, anything in predevelopment, human capital, stuff like that, soft costs.

So that's more expensive in the and if you have a US than than overseas.

When it comes to New York specific, New York is the one of the most the most expensive city because of just the sheer amount of of regulations, permitting, extra safety precautions, and that all comes down to the density of the population. Right? Because it's so dense there, it's you know, and there is bureaucracy a little bit, you know, it there's the population size here. We're talking about ten, twelve million people.

Right? So imagine managing all of that. Right? So you're dealing with a much bigger organism over here.

So that all translates to cost. Right? More time, more legal fees, more accounting, more stringent labor, meaning you might have to spend more money on training. I mean, there's so many it's just there are so many different things that make New York like a premium that I I mean, I can't even explain it.

Like, just to just to close the street down. You know?

It must be expensive.

Right? It's not only that expensive, it's the time. Right? So time is money in in the development, as you've heard before.

So when something takes time, it may not cost money, but it does because it took time. So that that that time thing, because we're dealing with such large bodies, such large you know, they're dealing with a lot of stuff at once. The time, the additional time is what is what adds to, you know, a lot of the costs and stuff like that. And then if you have to go in front of, depending on the site, in front of community board or in front of you know, you have to set that whole package up.

And again, that takes extra time, which is extra money. Another thing in New York, I mean, insurance costs, prevailing wages, you might have to, you know, rent the fire department out for the day just to shut down the road. Right? So all of this stuff, this this extra engineering, this extra planning, extra engaging, all costs money and time.

Okay. Yeah. Makes a lot of sense.

Yes. To round up and and jump to almost the last topic, looking into AI. You mentioned before that you use AI in in your workflows.

Yes.

How do you use it for all the developers to learn how others are doing in the field? And what does it translate to on your daily tasks? How does it make your life easier, basically?

Yeah. So that's a good question. And like, we all know that AI can mean a lot of things. When when we when I'm talking about AI, I'm talking about, like, large language models and augmenting them over data. Right? So, essentially, what we do is a lot of okay. We get a site.

Let's go into the zoning code. Let's go into the law. Let's go into the the the the SIR. Let's go into all these all of these large data sets, whether they're text or p, and let's retrieve the information we need.

Right? AI and large language models are very good at that. Right? If you guide them very well and give them the data that you need them to retrieve more or less.

We're essentially building, you know, rag agents for different parts of the process to be able to cut down our our feasibility time, determining feasibility time from, let's say, a month to a few days. Right?

Certain types of again, we're not using it in every part of you know, hopefully, it'll get good enough and we'll be able to put it in in all the parts that are necessary. But anything you could think of from doing Veeder simulations based on datasets to training models with actual permits that were approved, stuff like that. We have our little secret sauce, but it's all comes down to data. We're building a very, very unique dataset that is unique and super valuable to this market in New York that helps us kind of, at the end of the day, spend less money to determine whether we're gonna proceed or not with with the project. And then once we do decide to proceed, I mean, we use AI and specially trained models to try to get everything that we need done without having to hire hundreds of, you know, hundred people.

Now jumping on to the personal side, what keeps you going after some years working in the energy industry, specifically in New York? What is the driver that motivates you to keep working on this?

What drives me the most? I have a lot of drivers. I would say my one of my main drivers is is the desire to accomplish real world problems and fix real world problems and provide value at the end of the of the day. Not not just nominal value, like, you know, actual value.

I think that that's the most intriguing part of this. Plus, I really I love technology. I love real estate. I love finance.

And this is an intersection of all three.

For me, you don't necessarily have to love what you do, but you can't hate it. You know? And I believe that one of the keys to success is becoming obsessed. And it's very difficult to become obsessed if you don't, you know, if you're not really into it. So what drives me is wanting to accomplish more and more.

I love my family. I love my team. I love, you know, the people around me. I have a very strong, great support system. I'm I'm very grateful for that.

My girlfriend, all that kind of stuff. So I would say just just the the desire to accomplish and the desire to succeed, and then money and all that is a byproduct of that. Okay. It comes with that.

Okay. Jumping to the last section, is there anything you're working on that you would like to pluck to our audience right now that you would like them to know?

Yeah. We, right now, are actively developing our our ten sites. We're we're we're doing well. We're a couple ways through.

And we're looking for anybody who's interested in joining whether they'd be engineers, whether they'd be you know, project managers, we're looking for people that are interested, in what we're doing. Specifically, you know, in in in what we're doing in the neighborhoods, we're doing it in, you know, the community level approach. So, you know, we're looking for those type of people as well as, you know, always looking for banks, lenders, partners that that would that would wanna partner and get involved, get themselves in the door in this space in New York City.

You know, the mandates are big.

Okay.

Well, audience, you already know that. So limitless energy, here you have them in case you want to reach out.

We always finish with our last question, which is what's one contrarian view that you have about the US energy market that many people would disagree with? What is your view?

I would say that states like New York should produce a little more of their own power. You know, I don't think states should and I don't know if everyone would agree with with me on that. I don't think, you know, shutting down peaker plants, even though they are old, I think that it should be faced. I would say that being totally dependent on outside electricity production, I think is, you know, is not the smartest move, and that might be why New York has the highest prices for electricity. But I'm not sure.

Thank you for sharing that Contour Mew, Daniel.

It was a pleasure to have you here today It was a pleasure.

In the podcast, and I hope to have you soon another day.

Thanks, man.