I've spent my career in solar. I was there when third-party ownership took off, and I watched our industry get very good at a key thing: selling panels fast. But that playbook was built for net metering; that era is now over.
Here's what I see now. Rooftop solar, now with batteries, still pays in California - and the people who have it don't stop there. As water heaters, furnaces, and cars wear out, they replace them with electric ones. Over the next decade, that creates a new kind of home: fully solar and fully electric.
This transformation matters well beyond the home’s own walls. A home with solar, a battery, an EV and a heat pump can shift when it charges, heats and cools. A home with none of that has nothing to shift. The homes furthest along in electrifying are the ones that can offer the grid the most, if the deal is right for them.
The case for solar-led electrification
Balto is a founding member of Agile Electrification, a project that’s run through the UC San Diego Design Lab. It’s where the guiding principle of "solar-led electrification" took shape: the idea that solar should be the beginning of a home's energy plan, not the end of it.
Today, I serve as Designer in Residence at Agile Electrification, alongside Balto’s CTO Frank Chen and Andrew Krause, CEO of Northern Pacific Power. Agile Electrification is where the industry can try new ideas in public, with real homeowners, before they become full-blown products and services.
In previous years, we looked at what electrification would mean for 60 Sonoma County homes. Switching to heat pumps for heating and hot water lowered bills for fewer than one in ten. Paired with right-sized solar and batteries, every home came out ahead. That told us what pays off for a single home. The next question is what happens when those homes start working with the grid.
The next chapter: The Living Laboratory
Here’s the question that is at the center: what does a virtual power plant look like when it's designed around the homeowner, rather than a utility or central operator?
The Living Laboratory will work with up to 200 Northern Bay Area solar homes for about a year. It pairs real-world experiments with digital twins and large-scale simulation linked to UC San Diego's DERConnect testbed. Balto’s role is to turn every participating home into a calibrated digital twin, so ideas can be tested in simulation before they’re tried with real families.
For grid cooperation to be a win for homeowners and the grid, two things have to work. Balto is building both.
First, a model of every home. You can’t plan a home’s future from an average, or from its past alone. Every home is an edge case. Balto builds a digital twin of each one, grounded in building physics and calibrated to the home’s actual utility data and weather. That matters: a Carnegie Mellon study of 106 homes found uncalibrated models missed annual energy use by 56% on average. In the Living Laboratory, digital twins let us test a battery, an EV, a heat pump or a new program design across thousands of scenarios, then check the results in the field.
Second, a deal homeowners would actually choose. Many of today’s offers require homeowners to hand over control of their battery on terms that are hard to evaluate, with customer enrollment baked into the fine print of complex solar financing contracts. The financing, incentives and experience around grid cooperation need to be rebuilt so saying yes is an easy, informed choice. The Living Laboratory will explore:
- Governance: who decides about a home’s equipment, and how do homeowners have a say?
- Control: what will people let someone else manage, and when do they want it back?
- Compensation and contracts: what’s a fair deal, in terms that make sense on first read?
- Financing: could utilities or hyperscalers help pay for home systems and buy capacity directly from households?
Beyond the lease
Today's third-party ownership market was built around a simple solar transaction, with batteries bolted on as ancillary equipment. We think this model has run its course, because it rewards getting equipment on the home once, not the long-term results for the household. The next generation of home energy financing should be built around outcomes for the home: the bill, comfort, resilience and clean power, over the life of the relationship.
That expands Balto’s role, from building systems for homeowners to advocating for them over the long run. We want to be a home energy partner, not a one-time seller, offering trusted advice, financing, installation and ongoing service through the local installers homeowners already trust. Balto runs as an employee-owned network of solar and electrification contractors, and our AI is built to give those installers better tools, not replace them.
We'll share more about what that looks like soon. For now, the Living Laboratory is where we get to test these ideas in collaboration with homeowners, in the open.