Span is shifting its business strategy. While the smart panel maker got its start in the individual consumer market, it is beginning to focus on utilities as well.
Founder and CEO Arch Rao told Latitude Media that the company is expanding from a home electrification company “to being essentially an infrastructure company.” And to do that, utilities are key.
“Utilities in the U.S. represent, perhaps, still the most effective channel for delivering solutions at scale,” Rao said. The company is currently in talks with multiple utilities about how partnering with Span can save them money via cost avoidance.
To be clear, this isn’t a full pivot. The company is pursuing a three-part business model, maintaining its existing work on both new homes and individual residential customers — but the focus is increasingly on the utility segment.
“This has been part of our North Star since the beginning of the company,” Rao said. “We’ve been intentionally a little clandestine about it, while we’ve been building up the product capabilities specific to the utility.”
In 2024, at the Distributech conference, the company unveiled an eight-circuit version of its panel “that utilities can install as if they’re installing a meter in a customer home,” Rao said. And being more utility-centric is also a driver behind Span’s partnership with smart metering company Landis+Gyr to offer a joint product targeting “circuit-level billing-grade metering, DER visibility, and controls.”
“If you build a product that can make it faster and [more] inexpensive for every home…in the U.S. to switch from gas to electric without the added need for a service upgrade — and it can happen this week, as opposed to nine months down the road — then our decarbonization goals can be achieved faster,” Rao said.
Nailing down the business model
Span’s founding focus — and the current focus of its marketing, as a glance at its homepage would suggest — was on individual homeowners. The company promises to reinvent the electrical panel and balance a home’s electricity use, which is a benefit that theoretically appeals to homeowners adding an EV charger or an induction stove to their load, or integrating a battery or solar panel.
Span offers a way for individual homeowners to monitor and curtail power on individual circuits in real time, “to never import or export more than the limit of your home,” Rao said.
But that’s a relatively small market, one that’s impacted by stagnating rooftop solar installations and EV purchases. So Span also targets new builds — and now is making an “intentional move” toward selling to utilities as well.
[Moving into the utility market] has been part of our North Star since the beginning of the company.
Span’s panel costs $3,500, and accessories involve separate $700-plus purchases. It’s unavoidably pricey, though tax rebates and other incentives can bring the cost down, but the premise is that they offer buyers costs saving through avoiding expensive upgrades.
The pitch to utility companies is also one of cost avoidance, just at a much larger scale. Span’s target utility customer is one at the intersection of load growth, the energy transition, and existing regulatory restrictions, especially in places with aggressive decarbonization timelines like California.
“The incumbent model of serving this load growth is building more poles and wires and transformers to meet the load growth,” Rao said. “But they’re also being told by their regulators that, ‘hey, the cost of building all of the infrastructure is driving up customers’ energy prices way too high and way too quickly.’” So these utilities are finding that alternate approaches are needed.
The ability to control a building’s loads and sources not only saves a homeowner money. Crucially, it also allows the utility itself to avoid service upgrades when a customer adds more load. Avoiding or deferring the costs of both transmission and especially distribution “is a really high value to the utility,” Rao said. “In many cases, that deferral value is so high that they can almost give away a Span solution to a customer at no cost to the customer. And that’s, I think, progressively, what we’re heading towards.”
The details, though, are still being ironed out. Span is currently figuring out with its potential utility partner which business model will work best.
“Is this rate based like a distribution asset? Is it rebated like a VPP asset?” Rao asked rhetorically. “Is it a solution that is discounted to the customer when they’re buying an EV charger, or potentially given in place of, like an advanced metering device instead of a smart meter?” Ultimately, he added, the right model will differ by state and by utility themselves.
The shift comes at a complicated time for smart panel makers. While there was a surge of interest right around the time of Span’s debut in 2020 and 2021, according to a Wood Mackenzie analysis deployment is cooling as a new generation of smart meters is increasingly competing with panels in terms of grid edge visibility. And while business models vary, certain smart meter companies are also targeting the utility segment.
Sense, for instance, built an energy monitor that offers grid-edge visibility — and in 2019 also partnered with Landis+Gyr to put the technology in smart meters. The company’s main customer for those meters are utilities. National Grid has a goal of installing Sense-enabled meters for all customers by the end of 2027; at the time of Sense CEO Mike Phillips’ interview on the Carbon Copy podcast in June 2024, the utility was installing 5,000 meters per week.
The Trump administration wrinkle
Incoming President Donald Trump has said that he plans to walk back valuable consumer tax credits that, among many other applications, offset the high cost of smart panels.
Asked whether this complicates Span’s direct-to-consumer sell, Rao said both yes and no.
“There’s definitely a knock-on effect from, say, the expected impact on the investment tax credit,” Rao said. “So that means there’s going to be some reduction in the demand for solar and solar and batteries, which therefore has a knock-on effect on Span adoption, which is now increasingly becoming standard for customers adopting solar and batteries through a lot of our partners.”
But, Rao said, IRA dollars have taken “a while” to materialize, and the programs aren’t homogenous across the country — meaning there are places where Span’s panels would qualify for a credit and places where they wouldn’t. “So as a business, we’ve been designing products and solutions that we believe have value, independent of rebates and credits,” he said.
Rao estimates that in states where rebates are currently available, a homeowner installing a Span panel could be eligible for up to $4,000 in rebates for Span panels, and another $2,500 for the installation cost, depending on their income level. Then there’s another $600 panel-specific rebate, which is income-agnostic; and there are also utility-specific rebates.
While the federal rebates are potentially most at-risk in a Trump administration, the utility rebates are likely safe — and could potentially even increase in light of Span’s work directly with the power sector.
Rao declined to share which specific utilities Span has been speaking with so far, but did say that they’re primarily large investor-owned utilities, “because they’re the ones that are primarily under the gun in terms of the cost increase that they’re having to be responsive to.” That said, there are also progressive municipal utilities and community choice aggregators that are also good candidates because they are leaning into electrification.
“The IOUs represent, I think, the most significant opportunity to move the needle on national-level electrification opportunities, without being dependent or reliant on any types of tax credits or tariffs,” Rao said.
