Catalyst with Shayle Kann

Episode: The Rise of Permissionless DERs
Date: January 29, 2026
Host: Shayle Kann
Guest: James McGinniss (Founder & CEO, David Energy)

Overview

This episode dives into the emerging world of “permissionless” distributed energy resources (DERs), with a special focus on small plug-in batteries and solar systems. Host Shayle Kann and guest James McGinniss discuss what permissionless DERs are, their regulatory grey areas, their affordability advantage, real-world use cases, and the technical and economic opportunities they unlock for households, businesses, and potentially the broader grid.

Key Discussion Points and Insights

1. Defining "Permissionless" and "Plug-In" DERs

[03:44-09:02]

• Terminology Evolution:

  • Permissionless DERs refer to energy devices that can be installed without lengthy interconnection agreements or regulatory approvals.
  • Plug-in DERs is a more consumer-friendly term, indicating devices simply plugged into existing outlets.
    • "Permissionless is for the wonks and...plug-in is for customers and sort of consumers. It’s more intuitive." —James McGinniss [03:56]

• Technological Scope:

  • Includes small batteries, plug-in solar panels (e.g., “balcony solar” prominent in Germany), and even batteries built into appliances (cooktops, EV chargers).
  • The pre-existing 120V/240V outlet serves as a bi-directional interconnection point, bypassing complex electrical work.
    • "The 120 Volt or the 240 Volt outlet is a preexisting bi-directional interconnection point…you can actually push power into." —James McGinniss [05:57]

2. Regulatory Landscape: Murky but Evolving

[09:02–12:48]

• “Permissionless” ≠ “No Permission:

  • Safety is dictated by UL certification and the National Electrical Code (NEC); many plug-in products already comply.
  • Jurisdictions vary in terms of additional permitting or export rules.
  • Recent legislation in up to 24-30 states may permit export to the grid under certain conditions (e.g., capped at 1.2kW/device).
    • “At the sort of electrical code level, this is already allowed under the current guidance and there are many products that support that.” —James McGinniss [09:39]

• Utility Concerns:

  • Utilities are cautious about unexpected export from customer devices, especially for line worker safety during outages.
  • Some argue any grid-connected device—even if not exporting—should require a permit.

3. Core Value Proposition: Affordability Over Resilience

[12:48–16:51]

• Affordability as a Catalyst:

  • The main draw in markets like Germany is saving money, not just backup power.
    • “For the first time, maybe our industry can really focus on affordability being the be all and end all in ders and not resilience...Permissionless speaks to no, these are super cheap, they're easy and it's all about cost savings." —James McGinniss [13:28, 14:49]

• Massively Lower Soft Costs:

  • Traditional residential battery installs: soft costs = 50%+ (permitting, labor, customer acquisition).
  • Plug-in products bought online can nearly zero out these costs.
    • "Permissionless can effectively put [soft costs] to 0...half of the cost in a residential install you could think of as basically being gone." —James McGinniss [15:19]

4. Use Cases, Economics, and Market Impact

[18:07–24:19]

• Household Use Cases:

  • Historically, battery installs are for resilience or solar time-shifting, but plug-in DERs enable new economic use cases, even for renters.
  • Balcony solar has been widely adopted in Germany due to high power prices; 4+ million units installed in four years [19:48–21:33].
  • U.S. adoption could surge if bills rise or soft costs continue to fall.

• Commercial Applications:

  • Small businesses can see real returns: e.g., $50/month/kW shaved in NYC demand charges—quick paybacks at low installation costs.
    • "[In New York] it's about $50 per month per kilowatt shaved, which to a small business actually can mean a lot..." —James McGinniss [21:50]

• Demand Response Participation:

  • Program eligibility varies, but aggregation can enable both small residential and commercial systems to contribute meaningfully [26:35–28:06].

5. Market Potential & Scaling

[28:06–32:23]

• Scalability:

  • Even at small per-device sizes, mass deployment (hundreds of thousands) adds up to grid scale—possibly gigawatts within a decade.
    • "If you look to Germany...doing a gigawatt in a handful of years...it wouldn't shock me to see tens of gigawatts deployed in the next 5 to 10 years in the US." —James McGinniss [28:35]

• Grid Impact Thought Experiments:

  • Shayle muses about data center-driven growth and whether aggregated DER portfolios could reliably fill large capacity gaps—possibly up to 10% of peak load in some grids [29:35–30:47].
    • "I think we could see like 10% or more, which is wild to think about in these small systems." —James McGinniss [31:33]

• Expanding Form Factors:

  • Battery innovation is just starting: kitchen appliances, HVAC units, integrated form factors. Most companies entering the space are less than five years old.
  • "There's going to be a lot of innovation in form factors around batteries." —James McGinniss [32:36]

Notable Quotes & Memorable Moments

• On Simplicity:
  "Traditional installs, we're basically doing an open heart surgery...but there's already a point sitting there for you..." —James McGinniss [05:57]

  • “It's like putting on a T-shirt...it's a function that you have available to you.” [06:53]

• On Soft Cost Reduction:
  "Permissionless can effectively put [soft costs] to 0...buy online motion...totally removes CAC and soft costs." —James McGinniss [15:19]

• Germany as a Model:
  "In the last four years or so they've seen 4 million of these systems adopted...deploying that in four years through these systems is remarkable." —James McGinniss [21:09]

• On Scale and Aggregation:
  "Mass deployment...adds up to grid scale...it wouldn't shock me to see tens of gigawatts deployed in the next 5 to 10 years in the US..." —James McGinniss [28:35]

Timestamps of Important Segments

| Timestamp | Segment Topic | |------------|-----------------------------------------------------| | 03:44–05:52 | Defining "permissionless" & "plug-in" DERs | | 09:02–12:48 | Regulatory status & interconnection challenges | | 13:28–16:51 | Value proposition: affordability vs resilience | | 18:07–24:19 | Economics, commercial use cases, payback analysis | | 26:35–28:06 | Aggregation, demand response program participation | | 28:06–32:23 | Scaling, grid impact, and innovation in form factor|

Conclusion & Tone

This episode is a clear-eyed, engaging examination of the promise and practical realities of permissionless DERs. Shayle and James are enthusiastic but analytical, often drawing on international case studies (notably Germany) and giving frank assessments of both market barriers and transformative potential.

Final Word:
"If we can learn from Germany...people are going to go on Amazon, they're going to start buying the stuff and they're going to start plugging it in. And so I think this is coming one way or another." —James McGinniss [24:19]

For Further Exploration

Check out links and resources at latitudemedia.com for more on today's topics.

Guest: James McGinniss — Founder & CEO, David Energy
Host: Shayle Kann — Catalyst (Latitude Media)