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BlocPower founder & CEO Donnel Baird
BlocPower

“Turning buildings into Teslas.”

That’s the name Donnel Baird has chosen to go by on his Twitter account — it’s also become the tagline for his company, BlocPower, ranked No. 47 on this year’s CNBC Disruptor 50 list.

Since 2014, the company has been retrofitting buildings in New York’s disadvantaged communities with energy efficient heating and cooling systems, ultimately upping building values and lowering building operating costs. So far, Baird has completed over 1,000 projects in the New York City area, with even more building retrofits underway in 24 additional U.S. cities.

For Brooklyn-raised Baird and his team at BlocPower, honing in on retrofitting opportunities in underserved communities translates to high-paying green jobs, healthier air, and increased investment in those neighborhoods — especially as U.S. businesses bring workers back to the office.

CNBC recently spoke with Baird, who says the level of interest from commercial buildings is “skyrocketing” when it comes to sustainability upgrades and energy efficiency. “We know that, as people return to work, air quality and the health impact of buildings is going to be a requirement,” he said. “We’ve seen a dramatic uptick in the amount of construction projects that we’re completing … because folks are seeing June as the month to come back to work.”

The following Q&A has been edited for length and clarity.

CNBC: Of the upcoming projects that you have planned throughout the country, which cities do you see presenting the biggest challenges?

Baird: Philadelphia is one of my favorite markets, but it’s also a huge challenge. The city actually has one of the highest amounts of low-income homeownership of any major American city. There used to be lots of factory jobs inside the city limits and Philly, so all the workers in those factories bought these row houses and townhouses. The jobs left, but the workers and their kids and grandkids are still there. Many of them are unemployed, many of them are considered low income by federal definition. They own those homes because their parents and grandparents bought the townhouses, but they can no longer afford property taxes, maintenance repairs, and certainly not energy efficiency. So it’s a really interesting challenge for us … how we’re going to capitalize and analyze all these buildings.

They have massive health needs, they have roofs that need to be replaced, they have plumbing that needs to be replaced, the buildings are filled with carbon monoxide and other kinds of lead and asbestos. So, we’re trying to figure that one out, but it’s going to be a lot of fun.

There’s another American city that wants to go 100% electric, 100% renewable energy within the next five years. And so we’re incredibly excited about that project. I can’t say which it is yet, because they’re in an RFP process. But hopefully, by the end of the month, or next month, we’ll be able to say. Obviously, that’s going to be a massive challenge, because we’re going to green up all the buildings and green all the cars and trucks. And so that’s going to be a major, major, major challenge. But if we can pull it off, it’s going to be huge.

CNBC: Can you give us a hint?

Baird: I will say it’s a city in New York that’s benefiting from the leadership of the state of New York and Governor Andrew Cuomo and the state legislature, they have made significant commitments to clean energy. And so some of the cities are trying to match those commitments. So it’s in New York State.

CNBC: If it’s financially advantageous for buildings to switch out of fossil fuels and into green power, and if there are tax incentives for them to do so, what’s your biggest barrier to growth right now?

Baird: It’s financially advantageous under certain conditions. You have to have the right amount of tax credits, you have to have the right amount of incentives and or subsidies from the local utility company or from the local government. And in those conditions, it’s financially advantageous.

The real variable is not just the subsidies and tax credits, because some of them are federal and you can get them anywhere. The real variable is what’s the local cost of labor. And how efficient is your labor supply in terms of modern construction services and highly skilled workers. There’s a labor shortage of skilled construction workers across the country, which is a big problem and a major constraint right now.

And then the other constraint is the manufacturers. Their costs are coming down, but it’s a new piece of hardware that allows us to take buildings entirely off of fossil fuels. We’re still pretty early on in that manufacturing curve, but the cost is coming down. Right now, it’s cost that we’re able to amortize out over time, making it viable for building owners to access these technologies in the same way that the mortgage industry does for mortgages: Nobody can afford a house upfront. A 30-year mortgage stretches that payment out over time. So while we can make it affordable and accessible, the question is: Do building owners understand the value of taking out a second 15-year mortgage to electrify a building they already built? Part of our job is dealing with the labor supply, and another part is the sales, marketing and customer education.

CNBC: Your services also make buildings healthier. Have you seen any pandemic tailwinds and what are your expectations, post-pandemic?

Baird: Absolutely. We’re spending a lot of time linking green energy equipment upgrades to Covid-19, thinking, ‘How can a piece of green equipment actually filter the air in your building to make it safer for you and your kids? To make it safe for weddings or funerals in a synagogue, church or a mosque?’

Talking with owners about the way their buildings circulate outdoor air pollution indoors … this is a huge focus for our business post-pandemic. In Oakland, California, we’ve got a big demonstration project, where we’re taking lead and asbestos out of the buildings, which keeps people healthier. But we’re also putting in new electric heating systems that are making the air quality inside buildings healthier. Companies that do this, like Kaiser Permanente, who we’re working with, are going to have fewer families in and out of the emergency room with chronic asthma attacks and other conditions, because the buildings are healthier. It’s a huge focus for us.

CNBC: In that same regard, how are you thinking about the environmental impact of people returning to work in office buildings?

Baird: Millennials and Gen Z are very focused on the air quality and health impact of buildings, particularly office buildings, now that many millennials are totally comfortable working from home via Zoom and looking for greater benefits as an in-person employee. At a minimum, it has to be safe. We’re seeing a lot of commercial office folks in New York City focusing on those types of upgrades. Now, they haven’t had rent coming in for the last 12 months, so many of them are hesitant to pull the trigger and make that investment. But the level of interest that we’re seeing is skyrocketing; And we know as people return to work that those upgrades are going to be the new requirement.

There’s a set of economic indicators involved that bring value to a landlord that’s leasing the space. If you increase the air quality, you can simultaneously boost the productivity per square foot of your investment in commercial office space. There’s a lot of data on this that’s coming out, and we expect that customers who have large commercial office space are going to demand, at a minimum, that air quality be as clean and healthy as possible.

CNBC: You mentioned the hesitancy of companies looking to make these types of investments. Are you seeing that hesitancy diminish as we move further into a post-pandemic world?

Baird: People are starting to pull the trigger. Folks we’ve been talking to for the last 12 to 18 months, who were about to pull the trigger in February of last year, are starting to come back around. Everyone’s feeling more optimistic, everyone’s ready to return to work and return to normal economic activity. They’re making those investments, and we’ve seen a dramatic uptick in the amount of construction projects that we’re completing, year over year, but particularly month over month. We’re doing better than projected, because folks are seeing June as the month to come back to work.

CNBC: Last week, Senate Republicans introduced a $928 billion counteroffer on infrastructure to President Biden’s now $1.7 trillion plan. GOP leaders say that $4 billion of that goes to major infrastructure projects like electric vehicles, but there’s still very few specifics on whether green energy or clean tech will be included in those projects at all. If you were working in the Biden-Harris administration, would you encourage the president to accept this offer?

Baird: Let me start by saying that I’m a big believer in President Biden. As both a healer, and as an individual, he has gone through truly difficult times losing his family, re-building a life, and trying to heal his children after multiple losses. I think he’s the right president for what this country needs in terms of our hyper-partisanship. And so given that, I 100% understand President Biden’s desire to complete a bipartisan infrastructure bill. I think it’s important to the overall health of the country to be able to do something together.

Still, the skinny or narrow infrastructure bill that has been proposed does strip away a lot of smart grid and solar electrification projects, as well as some social stuff like senior care, elder care, child care. The Democrats want that stuff. Meanwhile, it’s clean energy, and some of this social service infrastructure funding that the Republicans want to pull out. There is bipartisan agreement on extending broadband across the country, and making sure that America’s competitive with China and other places so that any American kid can access the internet, and the genius of the American population can be unleashed because we all have internet as a baseline and digital access. So that’s good. That’s the good part of the skinny infrastructure bill.

I believe that there’s a cohort of Republican senators that want to do something on climate. It can’t be called climate. I talked to my Republican friends … I only have like one Republican friend, I talk to this one dude, all the time, about the fact that there is a small cohort of Republicans that could do something on solar, they could do something on batteries, they could do something on nuclear, they could do something on smart grid. The fact that our nation’s electricity grid and gas grid has been under attack by hackers … we saw all that stuff needs to be upgraded. And that’s cybersecurity infrastructure. And so I think there’s something to be done there. And I’d love to at least see the cybersecurity and smart grid aspect be included in a skinny infrastructure bill.

I’d take a narrow deal with cybersecurity for the nation’s electricity and gas grids as a part of that. As a business person, I can understand that if we digitize the nation’s electric and gas grid infrastructure, that new digital platform is going to provide enough data and computerization to allow us to do a lot of the solar and other kinds of green energy stuff that we need. Having a digital foundation for the country’s energy system as a whole would be a huge improvement. I would take a narrow infrastructure deal and live to fight another day on climate and maybe just pass a separate small climate bill through reconciliation. And then you’ve got to let the private sector do its thing.

CNBC: Over the last year or so, venture capitalists and investors alike have made a lot of promises to reckon with diversity at their firms and among their portfolio companies. As a Black founder, do you feel as if any substantial progress has been made when it comes to greater investment in, and representation of, founders of color?

Baird: No, not in venture capital. I don’t. However, I think that in corporate America — certainly the leaders of corporate America — particularly in the tech industry, we are seeing real substantive conversations about diversity. And more importantly, not just conversations, but strategic investments.

With regard to Silicon Valley VCs or Silicon Alley VCs in New York, or even across other parts of the country, no. You have the same superstar, legendary investors. Kapor Capital [a BlocPower investor] was investing in Black and Latinx founders before George Floyd. They were investing in women founders before George Floyd. Andreessen Horowitz, as much as the press loves to give them a hard time about what they do or don’t do, they invested in us in 2014, long before before George Floyd. And they invested again in 2019, long before George Floyd.

I talked to these folks every week, and it’s a significant source of mentorship and guidance for my personal growth. And, by the way, they never share the fact that they talk to me every week, and give me specific feedback on how to grow my company. Kapor Capital doesn’t talk about it. Andreessen Horowitz doesn’t talk about it, but they invest significantly, kind of off the books and outside of the public eye. They were doing it before and they’re going to continue to do it after.

So, the folks who have already figured out a lot of the racial stuff doubled down — they tripled down — in Silicon Valley. Other folks, I think, are still trying. They’re interested, they want to do better, they want to do more, but they don’t quite have a plan to square traditional pattern matching. As a VC, how do you square that with the need to invest in a new cohort of founders that don’t resemble the patterns that you’re comfortable with, and don’t resemble the patterns that you think are going to make money? Deep down in your heart, if you don’t think someone’s going to go off and make you a bunch of money, it’s really hard to make that investment.

I am hopeful. I think like five years from now, VC will be in a better place. But now, there’s been no substantive difference, other than the hype and public conversation around trying to do better, which is still progress.

CNBC: Is BlocPower at the point where it’s thinking about life as a publicly traded company?

Baird: I don’t think we’re quite big enough right now, but maybe 10 months from now. We’re looking at it. We want to grow fast and grow big and we’d look at something like a SPAC the same way we’d look at an IPO: ‘Are we ready to do it?’

We’re firm believers in providing retail investors access to our platform. I know a lot of times VCs think that’s a negative signal, but fundamentally, as a former community organizer, I believe in having regular Americans participate in our company. And if things go well, those people are going to own the upside, because we want to be BlocPower by the people, for the people. We believe in that kind of stuff.

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Quick Charge Podcast: March 30, 2023

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Quick Charge Podcast: March 30, 2023

Listen to a recap of the top stories of the day from Electrek. Quick Charge is available now on Apple PodcastsSpotifyTuneIn and our RSS feed for Overcast and other podcast players.

New episodes of Quick Charge are recorded Monday through Thursday and again on Saturday. Subscribe to our podcast in Apple Podcast or your favorite podcast player to guarantee new episodes are delivered as soon as they’re available.

Stories we discuss in this episode (with links):

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Tesla is rumored to be planning a US LFP battery cell factory with CATL

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Tesla is rumored to be planning a US LFP battery cell factory with CATL

Tesla is rumored to be planning a new battery factory to produce LFP cells in the US with China’s CATL, the world’s biggest battery manufacturer.

Over the last few years, CEO Elon Musk has said multiple times that Tesla plans to shift more electric cars to LFP batteries in order to overcome nickel and cobalt supply concerns.

Iron phosphate (LFP) batteries, which don’t use nickel or cobalt, are traditionally cheaper and safer, but they offer less energy density, which means less efficiency and a shorter range for electric vehicles.

However, they have improved enough recently that it now makes sense to use cobalt-free batteries in lower-end and shorter-range vehicles. It also frees up the production of battery cells with other, more energy-dense chemistries to produce longer-range vehicles.

The main issue is that LFP battery cell production is currently almost entirely concentrated in China. Therefore, it creates a logistical problem for electric vehicles produced in other markets.

Furthermore, in the US, it creates a problem for automakers trying to take advantage of the new federal tax credit for electric vehicles, which requires that the batteries of electric vehicles be produced in North America in order for buyers to get the full $7,500 credit. It creates a demand to bring LFP production to North America.

Ford has recently announced a plan to partner with CATL, the world’s biggest battery cell manufacturer, to build LFP battery cells at a $3.5 billion factory in Michigan.

Now Tesla is rumored to be doing the same thing. Bloomberg first reported the rumor:

The EV maker discussed plans involving Contemporary Amperex Technology Co. Ltd. with the White House in recent days, said the people, who asked not to be identified revealing private conversations. Tesla representatives sought clarity on the Inflation Reduction Act rules that the Biden administration is finalizing this week, according to some of the people. Rohan Patel, the company’s senior global director of public policy, was among those involved with the discussions, one of the people said.

The report is light on detail, but it states that Tesla is looking at a similar structure to Ford’s own deal with CATL. Texas has also been rumored to be a possible location for the new factory.

The LFP cells would enable Tesla buyers to get the full tax on the base Model 3, which is about to lose the incentive because its cells currently come from CATL’s Chinese factories.

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Heart Aerospace finds a new partner to develop ES-30 electric plane battery

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Heart Aerospace finds a new partner to develop ES-30 electric plane battery

Swedish electric airplane maker Heart Aerospace is joining forces with BAE Systems to develop a battery system for its ES-30 electric plane.

Heart partners with BAE to develop electric plane battery

Heart Aerospace is paving the way for sustainable electric air travel to become the norm with its leading-edge zero-emission aircraft.

We first covered the company in 2021 after it made waves with its ES-19 electric airplane. The aircraft was designed to carry up to 19 people up to 250 miles (400 km), perfect for short-distance travel.

The innovation was enough to attract an investment from the third largest US air carrier, United Airlines, in July 2021. United committed to purchasing and deploying 100 ES-19 electric aircraft to its fleet as it works to erase emissions from its fleet “without relying on traditional carbon offsets.”

Air Canada, the largest airliner in Canada, invested $5 million into Heart last year in addition to ordering 30 of its newest model, the ES-30.

Heart introduced the ES-30 last year, an electric plane driven by four electric motors and a battery system. The electric aircraft will have a fully-electric zero-emission range of up to 200 km (124 miles) and 30-minute fast charge capabilities. Hybrid reserve turbogenerators allow travel of nearly 500 miles (800 km) at 25 people max.

Heart-electric-plane-battery
Heart Aerospace ES-30 electric plane (Source: Heart Aerospace)

To advance the ES-30 battery system, Heart is partnering with BAE Systems, best known for its leading defense and aerospace solutions. The battery system will be the “first of its kind” for a conventional takeoff and landing regional aircraft, operating with zero emissions and significantly reduced noise.

The collaboration will utilize BAE Systems’ over 25 years of experience electrifying heavy-duty industrial vehicles. Chief operating officer at Heart Aerospace, Sofia Graflund, said:

BAE Systems’ extensive experience in developing batteries for heavy-duty ground applications, and their experience in developing safety critical control systems for aerospace, make them an ideal partner in this important next step for the ES-30 and for the aviation industry.

Heart Aerospace says it already has 230 orders and another 100 options for the ES-30 electric aircraft. In addition, Heart says it has a letter of intent for another 108 planes. The ES-30 is scheduled to enter service in 2028.

Heart Aerospace is aiming to double the all-electric range of its aircraft by the late 2030s with close to 250 miles (400km) range. In addition to offering zero emissions, electric airplanes feature lower costs (electricity compared to jet fuel) and less maintenance due to engine repair.

Electrek’s Take

Although 124 miles may not seem like much, it will be perfect for regional air travel while building a base for the future of zero-emission air travel.

The 30-minute fast charge feature is perfect for turning around flights quickly in between loading passengers and luggage.

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