HIBT Lab! SOURCE Global: Cody Friesen

Water is all around us–quite literally, there is enough water in the air we breathe to meet all of humanity’s needs and then some. Engineering professor Cody Friesen invented a solar-powered device that captures this vapor and transforms it into drinking water. Cody began manufacturing these ‘hydropanels’ with his Arizona-based company SOURCE https://source.co/ in 2014, and today they’re used in more than 50 countries worldwide. This week on How I Built This Lab, Cody talks with Guy about the prevalence of water scarcity in the U. S. and around the globe, and his company’s work to become the world’s first renewable, fully-digitized drinking water utility. Plus, the two discuss how entrepreneurs should be thinking about the growing renewable energy market. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

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• 5:12Guy Raz?

  Hello and welcome to How I Built This Lab. I'm Guy Raz. So if you remember Tatooine, the desert planet in Star Wars, water was a scarce resource. Rain only came to Tatooine maybe once a decade. So instead, the humans of Tatooine would rely on moisture vaporators. These were small towers that looked like rockets that would capture water vapor from the atmosphere. Now, the technology to make this happen wasn't just theoretically possible. It actually exists today and is in use in 52 countries around the world. It's a device called a hydro panel made by an Arizona-based company called Source. The hydro panel looks a bit like a solar panel,

• 5:57Guy Raz?

  but inside is a series of fans and materials that quite literally create water out of sunlight and air. The technology was developed by an engineer named Cody Friesen, who also founded Source. The devices essentially work by drawing the moisture that already exists in our atmosphere. Imagine that the air around us, the troposphere, is like a giant invisible store of water. Cody's technology is simply turning that invisible water vapor into drinking water.

• 6:30Guy Raz?

  Right now, each hydro panel can produce about 5 liters of water a day, and the cost of a panel is relatively high. But Cody predicts that the cost will drop dramatically over time, and the panels will produce much more water as the technology gets better. If this scales, it could have a huge impact on access to fresh, clean drinking water around the world. And for Cody, water, or rather, water scarcity, has been a theme his whole life, growing up outside of Phoenix, Arizona.

• 7:04Guy Raz?

  So you grew up in Arizona. Obviously, Arizona gets most of its water. I think with the Colorado River, right? Or maybe all of it, essentially.

• 7:12Speaker 01

  The Colorado and the Salt River system, yeah. It's sort of like this interesting thing. When I was a kid, you know, I grew up in the middle of this cotton field, and there's, for several months a year, they flood irrigate. And yet, in the scouts, we would go hiking into the mountains and hike through the desert to a riparian spring where, like, there's just a trickle coming out of the rock. And yet, there would be cottonwoods and cattails and all these birds. And there's sort of like this juxtaposition that was sort of ingrained in me.

• 7:39Guy Raz?

  Yeah, because, I mean, obviously, you're in Arizona. This is a part of the world with very limited water, right? And then, parts of the state use lots of water to grow crops. But then, as you point out, you've got these other places in the state where it's possible for life to thrive on very little water. You see that in some of those beautiful desert landscapes. So sort of thinking about this on like a global scale, right? I mean, because Arizona is just one of many places in the world where water is hard to find, and water scarcity is becoming more of a problem because of climate change. So do you, I mean, do you have a sense, sort of globally, of how hard it is to find easily available, clean drinking water?

• 8:23Speaker 01

  Yeah, so, I mean, we're talking about approximately a third of humanity does not have access to safe water at home, right? And so, it's something like 2.4 billion people. And that's the official number. But for anybody who's been to, you know, large cities around the world, whether that's Mumbai, or Mexico City, or Jakarta, the government states that there's potable water at home, but there's likely not. I didn't ever think that I would- You know, come back to water as a, you know, as an entrepreneur.

• 8:52Guy Raz?

  Yeah.

• 8:52Speaker 01

  But it's sort of like this fascinating thing that, you know, the reason why I, and I think a lot of people are attracted to the renewable energy space is because it's solving a massive problem, a global problem that is emerging, but also when solved will really enable humanity to live in a much more earth-aligned way.

• 9:13Guy Raz?

  Yeah.

• 9:13Speaker 01

  And yet, the thing that I found, and I think one of the things that I struggled with as a entrepreneur in the renewable energy space is that it's, while you're solving a large-scale problem that affects, affects humanity, it's not a human-scale problem.

• 9:29Guy Raz?

  Yeah.

• 9:30Speaker 01

  And yet, you know, sort of water is probably the most personal intimate substance, right? It's what we put in our bodies, it's food.

• 9:41Guy Raz?

  Right.

• 9:41Speaker 01

  There's religion and, you know, faith and it's sacred stuff in a lot of societies. And yet, we haven't to date solved water in a way that aligns people and planet. And so I saw this opportunity to sort of, to imagine applying the principles of renewables without knowing yet how to do it at that time.

• 10:01Guy Raz?

  Yeah. All right, let's talk about just the United States for a moment, which is amazing to me. I did not know this because most people listening, you turn on your tap and there you go, you got water. And if you live in a city or you're connected to municipal services, that's just how it is. But about 15% of US homes rely on water from wells. I know I've got one. And apparently about a fifth of people have well water. That water would fail a water quality test. We get our quality tests every year. So a significant number of people in the United States who are not getting municipal water that is treated might be drinking or are probably are drinking water that is not safe.

• 10:39Speaker 01

  Yeah, exactly. The statistics are quite, quite shocking in that regard. I'm also on a well. I happen to have four times the legal limit of arsenic in the groundwater that at my house. And so, and I moved into that house well before I started Source Global. So I put in this arsenic treatment system, which was quite expensive to solve that problem. But it's sort of a, not just a static problem, it's one that's growing in the sense that the reasons that water out of a well or out of the ground may or may not be potable. Are innumerate. If you live in the Northeast, right, your well is likely in contact with the water table that is in contact with your, you know, your septic system. And so, you

• 11:21Speaker 01

  know, there are all those issues as well. So, you know, water becomes very quickly from going from thinking about sort of the municipal scale problem and the, the way that we solve that problem with chlorine and concrete pipes and kind of doing that in a centralized way to then there's the rest of humanity that either lives on wells or in areas where that type of infrastructure is just not possible.

• 11:47Guy Raz?

  Right, right. So, I mean, so for the past few decades, right, a lot of our efforts around sustainability have been focused on, you know, finding new sources for electricity, right, like, like solar or wind, which are more abundant than, you know, say, oil or coal, which have to be dug out of the ground. And as we kind of develop the technology to harness those energy sources more efficiently, it's going to become cheaper, right, than other non-renewable sources that are harmful to our environment. But, you know, it's just hearing, I mean, it seems like no one was really thinking about applying the same concept to water, right, that, that there's, there's possibly another source of fresh water besides

• 12:29Guy Raz?

  what's in the ground and, and in our rivers and in our reservoirs that, that we could use instead.

• 12:34Speaker 01

  Exactly. Yeah. And it's sort of the ultimate extractive resource, right? It's either in the ground or it isn't, or it's either rained or it didn't. And, you know, when we think about renewables, renewable energy is begotten by free feedstock, right? The feedstock of sunlight or the feedstock of wind. When you're running a coal-fired power plant, the dominant source of cost is the cost of digging up free coal, putting it in a coal car, moving it across the ground, burning that, right, and then dealing with, you know, the, the knock-on effects. Even if coal's very cheap, right, the, the coal has to be dug and put in the coal car. That's a linear problem. You can't, you can't change

• 13:15Speaker 01

  those physics. But if you could make solar PV ever more efficient and make it ever more efficiently, then eventually we knew that would be lower cost than coal. So.

• 13:28Speaker 01

  In a very similar way, the question that I asked myself about 10 years ago was, could we do precisely for water what we've now done for electricity?

• 13:39Guy Raz?

  Could you make it from existing abundant sources of like sunlight and water with sunlight and air?

• 13:46Speaker 01

  Right, exactly. So, and it wasn't even, it wasn't even, the starting point wasn't even air as much as like, okay, the energy source is sunlight, what could we do? And when I analyzed this, recognizing that the lower part of the atmosphere, the troposphere, has this insane amount of water vapor in it, 10 to the 16 kilograms, so that's one and then 16 zeros kilograms of water vapor, about 100 million years of all of humanity's water needs, replaced every single week, the average lifetime of a water molecule in the atmosphere is about seven to nine days, it comes up off the ocean due to sunlight bearing down on the oceans, evaporates and then eventually rains back within seven to nine days.

• 14:26Speaker 01

  And so here we have this massive resource, it's actually growing during, due to climate change, but that's a whole nother topic, but we have this massive resource that's everywhere, it's an atmospheric ocean and it-

• 14:38Guy Raz?

  I guess I should mention, we live in the troposphere, the troposphere is the atmosphere all around us, it's like from ground all the way up, like six miles, that is essentially an invisible store of water all around us, all the time.

• 14:52Speaker 01

  You got it. And even in, you know, the desert, right, so we're, you know, I'm sitting in Scottsdale, Arizona right now and it's hot and it's dry.

• 14:59Guy Raz?

  3%, 5% humidity, like, right?

• 15:01Speaker 01

  Exactly. And so, you know, you think about that resource, right, so you think about free feedstock, sunlight's everywhere, water vapor's everywhere. Okay, so now, the only problem, in heavy air quotes, is how do you very efficiently move those water molecules from the gas phase to a liquid phase?

• 15:23Guy Raz?

  Let me see if I can understand this in slightly different, which is, we are, if we're living in invisible massive water source, you know, reservoir, right, this huge source of water, the question you're asking is, well, could we capture that and turn it into drinking water, sort of like when you walk out of your house in the morning, it depends on where you are, and even in some dry places, there's dew, right, that collects on leaves. And the question, I guess, is- Could we scale that? Could we, could we essentially scale what, what nature does?

• 15:55Speaker 01

  Exactly. And could we create the conditions of dew on leaves at high noon in the middle of the summer, in the middle of the desert, right?

• 16:03Guy Raz?

  Water, we all know, is two hydrogen atoms and an oxygen atom, right? You bash them together and you get water, right? But it's, it's a little more complicated than that. But you knew, and I guess, you know, most scientists know, that in theory you can, you can produce water if you get those elements and have the right conditions. Now, the question is, how do you really do that? So where do you start?

• 16:27Speaker 01

  Yeah, so, well, first, we, we start with humility with respect to data.

• 16:31Guy Raz?

  Yeah.

• 16:32Speaker 01

  Because, you know, what we know, whenever we're talking about such a huge problem, is that no matter how smart one thinks they are, or how smart the team is, the fact is that we are always just sort of taking the data directly ahead of us to invent a little bit, innovate a little bit, and then take more data so that we could sort of fail our way to success, if you will. And so, the starting point, I'm a material scientist, and there are many, many, many materials around us that are, and the, the term is hygroscopic, right? So with a G, because the hydroscopic would be something that is attracted to liquid water. Hygroscopic is something that's attracted to water vapor. And everything from the reason why you don't go jogging in a cotton shirt,

• 17:16Speaker 01

  because it's hygroscopic, to when you leave a lid off a sugar bowl and the sugar gets a little bit clumpy.

• 17:21Guy Raz?

  Yeah.

• 17:22Speaker 01

  Right? It's doing that because the water vapor in the air is being absorbed by the sugar. All the way to, you know, when you're in a, your favorite greasy spoon restaurant and the salt shaker has rice kernels in the bottom. The rice kernels are there to absorb the water preferentially, so that the salt doesn't, so the salt doesn't get clumpy.

• 17:43Guy Raz?

  Yeah.

• 17:43Speaker 01

  All around us are these, you know, materials that have these properties. Same reason why, you know, when you open a new box of shoes, there's a silica packet inside.

• 17:52Guy Raz?

  Yeah, because it's absorbing all of the moisture to make sure the shoes don't rot.

• 17:57Speaker 01

  You got it. Exactly. So, you know, we know that there are materials that have this property. Could we engineer a material that is able to concentrate water vapor from the air rapidly? And then upon exposure to sunlight, rapidly respire that water vapor back out? So that inside of the device, now called a source hydro panel, we could create the conditions that you described earlier, the dew that forms on leaves when you walk out of your home in the morning.

• 18:30Guy Raz?

  We're going to take a quick break, but when we come back, more from Cody Friesen, founder and CEO of Source. Stay with us. I'm Guy Raz and you're listening to How I Built This Lab.

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• 21:39Guy Raz?

  Hey, welcome back to How I Built This Lab. I'm Guy Raz, and my guest is Cody Friesen, founder and CEO of Source.

• 21:47Guy Raz?

  So you knew you could use air and sunlight to create water, but you needed to build a device that could actually not only capture those two things, but then make lots of water. And that's a, that sounds very, very challenging.

• 22:02Speaker 01

  Yeah, and actually, not to throw a crazy number of numbers at the audience, but just to kind of get, get used to the kind of scales here. So per square meter of Earth's surface, we get about 1.2 kilowatts of sunlight.

• 22:18Guy Raz?

  Oh, averaged, obviously, around, because sometimes it's less sunny and sometimes more sunny.

• 22:22Speaker 01

  Yeah, exactly. Yeah. So if it's cloudy, it might be half of that, right? So about 1.2 kilowatts per square meter.

• 22:28Guy Raz?

  That's a lot of energy. Sun is, the sun is a powerful thing, okay?

• 22:33Speaker 01

  Right. If you were to put a liter of liquid water in a pan and you put it on your stove and you convert all of that liquid water to a gas, right, turn it into vapor,

• 22:46Speaker 01

  you would have to put in about 640 watt hours per liter. So 0.64 kilowatt hours per liter. So that means that per square meter, per hour, at 100% efficiency, there's about two liters of thermodynamic potential to make liquid water.

• 23:06Guy Raz?

  In other words, per square meter of land on the Earth, if you factor in the amount of sunlight and air that is hitting that spot, it should produce two liters of water a day?

• 23:19Speaker 01

  If everything was perfect. So that actually corresponds to a heck of a lot of water, right?

• 23:24Guy Raz?

  It's a lot of water. And, and that's basically, and I know I'm kind of reducing this to, you know, sort of overly simplistic science, but that's essentially because we are living in the troposphere, which is this massive invisible, basically, layer of water vapor. The sun is constantly evaporating that water anyway. So the question is, why don't we just capture that evaporation?

• 23:46Speaker 01

  Exactly. And you have to actually create that phase change, right? So you have to put the energy in to get that, that conversion to liquid. And so what we said about Was thinking about all the different thermodynamic routes that you could go from the gas phase to the liquid phase using sunlight. And so that's what then led to, okay, well, first of all, right, water vapors very dilute in the atmosphere. It's anywhere from one to, let's say, one to 5% by weight. So if we are at that level, how do we concentrate that dramatically, right? So we use a material that concentrates that water vapor by about 10,000 times by volume.

• 24:25Guy Raz?

  It's like, it's like solar panel material?

• 24:27Speaker 01

  It's a nanostructured material that is very hygroscopic and then has sort of the Goldilocks binding energy. So just strong enough to bind water molecules, but not so strong that they can't be released back out.

• 24:39Guy Raz?

  So this is a material that you knew about or came across that is like desiccant, like those little bags that you says, do not eat silica. It works the same way. It can concentrate moisture essentially. And we're jumping ahead, but this is the material that you would eventually put on panels like that kind of look like solar panels, right?

• 24:59Speaker 01

  Yeah. So very similar to those desiccants that you're used to, except for just able to hold a lot more water, do that a lot more quickly, and then able to be cycled. And so the recognition that, okay, okay, if we could concentrate that water vapor onto an adsorbent of one form or another, and then if we could apply sunlight to those materials in a smart way, we could respire that water vapor into a stream inside of a device and push the dew point inside the device above ambient. So again, back to your daily life, if you are taking a shower and you like a hot steamy shower, you get out and you notice that there's

• 25:44Speaker 01

  water condensed onto the mirror, that occurs because you push the dew point above the ambient temperature. And of course, the mirror is at ambient temperature. And so you get condensation. And so could we, inside of a device, push the dew point up high enough that under all earth relevant conditions, we could get condensation? And so that was the sort of the question that had to be answered by the development of what we now have as a product.

• 26:13Guy Raz?

  All right, so you began to work on this and you now have these devices. They're hydro panels. And from what I gather, I mean, essentially, they kind of look like, I mean, they are solar. There's a solar panel on it, right? A regular photovoltaic solar panel. And that is used to power this device because inside there are fans. And essentially, they draw in warm air, push it through this material. And then from that material, water, the water is extracted.

• 26:43Speaker 01

  Yeah, and so now when we start talking about source hydro panels, right? There, as you said, there's a PV module in the middle. And that's producing enough electricity to run the electronics and the fans and so on. And some of the control points. There's an ARM processor inside that's actually solving a problem every second. That's saying, okay, here's the ambient condition. Here's the amount of sunlight I have. And then let me configure the system to optimize for efficiency.

• 27:09Guy Raz?

  Yeah.

• 27:09Speaker 01

  And the basic principles that we talked about are how Source works. And so we take in air. We push those across these materials. We take out just the right amount of water molecules from that air. We then expose the material to sunlight. We then get a concentrated water vapor stream that we then bring back to ambient conditions, an ambient temperature, and water vapor is then condensed out.

• 27:39Guy Raz?

  And so essentially, I mean, it's, anybody listening should go check the website out because it's actually quite amazing. I mean, you are literally, these panels make water out of air and sunlight. And do the panels need to be in a very sunny place? Because on the one hand, if it's in a humid environment, right? The panels can pull all that moisture out of the humid air. But on the other hand, if it's in a really dry place, it's presumably getting more power from the sun.

• 28:08Speaker 01

  Yeah, I think, I think actually, Guy, you hit it on the head that there's sort of two competing factors, right? So if you're in Manila and it's 85% humidity, but it's partially cloudy. The thermodynamic putt is pretty short, right? The distance between eighty-five percent and a hundred percent is short. Whereas if you're in Phoenix and it's five percent humidity, but yet you've got the full unmitigated sun bearing down, obviously you have the energy to drive the process. So the sort of competing factors are true around the planet. And so you'll see that, for example, in Dubai, we create a very similar amount of water as in Manila, as an example. And so, yes, there are places and times of the year where the amount of water we produce

• 28:52Speaker 01

  is minimized, but on sort of an average, those places are similar. Probably the worst place for us, of course, is like northern Quebec and, you know, the middle of winter, when it's, you know, minus forty out because of course, not only is there no water vapor in the atmosphere because the saturation concentration is so low, but also there's no liquid water. And so, you know, obviously places with a hard freeze, we don't produce water in the middle of winter, but that same place, Quebec, obviously during the rest of the year has, because they're very high latitudes, you know, have very long days, very high humidity. And so, again, yearly average, the amount of water produced is not terribly different than, for example, San Francisco.

• 29:33Guy Raz?

  You know, it's amazing, a couple of weeks ago on the show, we had a founder who was working on a company to create geothermal energy anywhere in the world, that the technology now exists to dig very, very deep, very quickly, like twenty kilometers down. And essentially, anywhere you dig twenty kilometers down, you're going to hit a geothermal energy source anywhere around the world. This is similar principle. What you're saying is that not just theoretically, but in actual fact, you can produce and bring abundant water to any place on the planet?

• 30:05Speaker 01

  That's right. Yeah, I mean, so today we're in fifty-two countries and we've built over four hundred and fifty projects across six continents. And in a lot of the places that we go, we're the lowest cost source of drinking water. And what's sort of fascinating, there's no physical reason, this is a big statement, why These Source hydro panels can't eventually be the lowest cost of delivered potable water on the planet. Lower cost than what you flush toilets with at home, what you consider sort of free water, which of course is not. So the cost of making a device that is made of earth abundant, sort of industrially abundant

• 30:47Speaker 01

  materials, and making it ever more efficient, and making it ever more efficiently, leads to a cost structure over time that is almost impossible to beat by traditional infrastructure, traditional extractive processes. And we just saw that happen with coal, right, over the last dozen years.

• 31:08Guy Raz?

  Yeah.

• 31:08Speaker 01

  We are seeing that in real time happen with electrification of transportation. You know, starting with, of course, you know, Tesla's being better, and a better experience than a typical ICE car, inter combustion engine car. But now, reaching commoditization in a way, that's, that's sort of shocking. All you gotta do is watch this last Super Bowl to see how quickly the world is changing.

• 31:31Guy Raz?

  Yeah.

• 31:31Speaker 01

  But it would be shocking to me that in, over the next decade or so, that renewables-driven approaches don't take over yet a much broader set of resources, not just water, but also in other areas.

• 31:45Guy Raz?

  We're going to be right back with Cody Friesen, founder and CEO of Source. Stay with us. I'm Guy Raz, and you're listening to How I Built This Lab. Welcome back to How I Built This Lab. I'm Guy Raz, and I'm talking with Cody Friesen, who makes hydro panels that can generate drinking water nearly anywhere in the world. So Cody, this technology is not just theoretical. These panels actually exist. They're in operation all over the world, right?

• 32:23Guy Raz?

  And, you know, you guys, I think, have deployed these panels in like 50 or so countries. There are homes that are using them for drinking water. And by the way, how much water can each panel produce?

• 32:38Speaker 01

  Yeah, so each, each hydro panel can do up to five liters per day. And when we think about the, the way that, you know, we go to, let's say, show up at a school or at a home, it's really understanding the drinking water needs of that facility, and then putting in arrays of the size that match that need, right? So done in a very similar way to how solar, you know, solar arrays are established to meet the load. Let's take the Navajo Nation, which is 27,000 square miles. So it's about the same land area as West Virginia. About 175,000 Navajo live there. 54,000, let's call it a third of them, have no water at home, zero.

• 33:22Speaker 01

  So we installed at about a little over 500 homes last year. We'll do about 700 homes this year, where we solve the problem of them not having any drinking water at home.

• 33:34Guy Raz?

  So right now, each panel can produce about five liters or

• 33:40Speaker 01

  liters per day.

• 33:41Guy Raz?

  Five liters per day, okay. And so it's not obviously enough for all your water needs. It's five liters. Let's can imagine what a liter of water looks like. But can that change? I mean, is, is this a technology challenge that eventually those same panels will be more efficient? Or is that just essentially maximizing what nature provides in air and sunlight?

• 34:00Speaker 01

  Absolutely. So we have an R and D group that reaches about eight years into the future. So, you know, at eight years, it's pretty wild ideas. At five years, it's pretty concrete ideas. At two years, it's becoming productized. So we have a roadmap of substantial increases in productivity over the coming years in such a way that also reduces the cost. So when we think about the roadmap to go from places that where people either have wells that are not producing potable water, have no potable water, are relying on plastic bottled water, are relying on trucked water or boated water, right? We're directly competitive today in a way that removes all the lack of sustainability issues associated with those approaches.

• 34:43Speaker 01

  And maybe most importantly, creates ownership, agency, and democratization over that resource, which is a big unlock when you're talking about something so fundamental to your life. If you don't have good water, it's Maslow's hierarchy all over again, right?

• 34:59Guy Raz?

  Yeah.

• 34:59Speaker 01

  Food, water, shelter.

• 35:01Guy Raz?

  How do you ensure that the water is clean and drinkable? I mean, it's because essentially it's like rainwater, right? And which can be fine, but doesn't it have to have other properties to taste good and also to be safe?

• 35:17Speaker 01

  Yeah, it actually turns out it's much purer than rainwater. So when we, when we actually produce the water, it's effectively distilled water. It's pure water. We then, because water is the stuff of life, we then ozonate that water. So in other words, we take oxygen molecules from the air. We make O3 and we keep that concentration up while it's stored so that we always have water that's sterile. And then we mineralize that water. So by the time that humans are consuming that water, not only do we know that it's safe and that it's mineralized, so for taste and health, we also know that that's true because every hydro panel is connected to the cloud and we see data feedback from every

• 36:01Speaker 01

  hydro panel we've deployed that says, yep, we produced this amount of water. We have this much water in storage. It's sterile and it's been mineralized. And by the way, now it's being dispensed. So we've sort of created the world's first renewable, fully digitized drinking water utility, if you will.

• 36:20Guy Raz?

  I mean, I know that the analogy has been made and you've heard it before, but it is like Tatooine. It's like, right? It's like they had these, what were they called on Tatooine? I can't remember the, it was like spiky things. Somebody listening will remember, Moisture Vaporator, right? Where they were, they were like water farms, right? And I mean, this is essentially what you're talking about. Of course, it doesn't look like the vaporators on Tatooine, but what you're essentially saying is that in the not too distant future, a home can be powered entirely by renewable energy and can produce all of its water needs.

• 36:56Speaker 01

  That's right. And you know, if you think about 20 years ago, if you were to ask, oh, should I put a kilowatt of solar in my roof? People would have said, oh, well, go put in double pane windows first, right?

• 37:07Guy Raz?

  Yeah.

• 37:07Speaker 01

  Or put in more insulation first. And now, of course, that discussion is never that. It's just, yeah, put another kilowatt, a peak solar on your roof because it's so cheap. I think there's a very similar thing happening in water in the sense that today we consider it as free when we know it's not. It's, you know, or it's really the most extractive resource we utilize.

• 37:27Guy Raz?

  Yeah.

• 37:27Speaker 01

  And so when we think about going to whole home levels, which is entirely possible with the approach we've taken, you could go build a home in the future today that has a completely closed loop water system that has no input other than source hydro panels. Now, would there be necessarily a good argument to do that at this moment, other than to demonstrate it? I'm not so sure. But that sort of existence proof only gets you to recognizing that if you're paying 150 or 200 or $300 a month for your water, you think about that over the course of a mortgage, the real cost of your water system is actually quite high.

• 38:10Speaker 01

  And so it doesn't actually take us decades to get to a position of parity that's similar to what we saw in solar PV.

• 38:19Guy Raz?

  Right. Right now, the cost of these panels is high. It's too high for most people to afford, right? But presumably the cost will go down over time. How much is it to fully install a panel on a home, for example, that's going to produce five liters of water?

• 38:30Speaker 01

  Yeah. So if you buy source hydro panel online, which is the way that Americans can get our hydro panels directly, they're about $2,000 a piece. And so, and of course, we have to ship them and install them. So when you amortize that cost out, right, that's already considerably lower cost than bottled water, for example.

• 38:49Guy Raz?

  Right.

• 38:50Speaker 01

  And so, and of course, we have lease models and so on. So there's, you know, people can do this without having to come up with cash upfront. Now, when we think about these larger arrays like we did with the Navajo or we did with Worm Springs Tribe in Oregon, the real cost actually gets way lower, right? And so we're able to actually solve problems where we're directly displacing trucking water or directly displacing having to go drill a new bore hole and then solve the water quality issues that exist.

• 39:17Guy Raz?

  All right, let's talk about your business too. I know you got a lot of backing from one of Bill Gates' funds and other investors. You've raised hundreds of millions of dollars, but you're not the only company working on this. So what is the business plan? Will you ultimately make money simply from selling the panels?

• 39:38Speaker 01

  Yeah, so we make money by selling panels and by selling water under contract today.

• 39:45Guy Raz?

  In other words, you sell bottled water, right?

• 39:47Speaker 01

  We sell bottled water, but that's a small part of the business. What I'm talking about is our water is a service business that will contract with school systems or with governments to sell water based on arrays that we've built. And then I think the reason why Breakthrough Energy Ventures came in or Fifth Wall came in, which is a real estate backed entity, or Microsoft's Climate Innovation Fund, is all of these entities are dealing with the challenges associated with water going forward, right? Obviously, real estate developers can't, if they have land that doesn't have water rights, that's a huge problem, right? There are a number of these investors that are thinking about water at a systemic level, right?

• 40:30Speaker 01

  And how do we move from linear extractive to sustainable circular, right? And how do we move to a place that is going to work in the future? And I think we've got an approach there that is potentially meaningful.

• 40:45Guy Raz?

  And when it comes to competitors, I mean, is your feeling, hey, the more the merrier? Because this is actually... This is technology that that needs to spread around the world.

• 40:55Speaker 01

  Yeah, I mean, anybody who's working on solving water is a hero in my book. I mean, there's it's a infinite market space for a given company, right? So it's it's going to take many solutions to solve all problems. From a competitor perspective, I mean, we're the only ones that do what we do, right? There's there's other folks that take water from the atmosphere, but they do that in a way that requires high humidity and quite a bit of electricity. So we've solved the problem in a different way, and I think that gives us a large addressable market, about a half a trillion dollar addressable market as it sits right now. Again, effectively infinite from where we sit today. And so, you know, there's there's interest in source because of our unique technology,

• 41:40Speaker 01

  but also because of the big unlock that we've enabled from a from market perspective.

• 41:44Guy Raz?

  All right, here I am in California. And so, you know, there's a lot of concern over over what the future of agriculture will look like. And this is a big problem, I mean, especially in parts of California where, you know, almonds are really require a lot of water and avocados and other, you know, grapes in Sonoma County. In fact, many of these verdant, you know, places that have been completely transformed because of water, essentially what you're saying is this is not going to be a problem if, in fact, everyone adopts this kind of technology, that you will be able to essentially irrigate anywhere in the world?

• 42:22Speaker 01

  Yeah, if you think about, well, let's start in the Central Valley, right? We are really heading in a direction that is not sustainable and have been for a long time. The farm workers that live in the Central Valley today live in communities where the groundwater has been poisoned by generations of pesticides and fertilizer and so on. So you think about the knock on effects are not just bulk water and can we grow almonds? But remember, there are humans that are there doing that work. And so there's like this big challenge there. Which we've got a number of projects going on in that in that region to support farm workers. But separately, and I think this was your your main point, there's no reason why through advanced agriculture approaches that

• 43:07Guy Raz?

  Yeah.

• 43:07Speaker 01

  use something like 1/20th or even 1/30th amount of water, that you couldn't produce water in the way that we do and then grow fruits and vegetables and so on in advanced agriculture setting.

• 43:21Guy Raz?

  I mean, essentially, what what I'm hearing is that in like, and you may not be saying this, but I think we can kind of draw this conclusion, which is if, for example, now we think about people dying from infections, right? And most people died from infections in wartime. That's why you had like so many deaths in the Civil War. It was infections.

• 43:41Speaker 01

  Yeah.

• 43:42Guy Raz?

  And now the vast majority of those infections could be healed with antibiotics, right? And so we're like, wow, you know, how crazy was that? Or, you know, you think about bloodletting in the Middle Ages, right? Like how they thought that they were treating diseases with with leeches. In 100 years from now, are we going to say, my God, we were so fixated on municipal water, piped water, or water sources, when all we had to do is focus on making our own water wherever we are? I mean, are we going to get to that point?

• 44:12Speaker 01

  Yeah. I mean, the best corollary is, you know, 1995, we talked about maybe there would be 20 million Internet users globally within 20 years.

• 44:20Guy Raz?

  Right.

• 44:20Speaker 01

  And now there are 6 billion smartphones, meaning that information poverty is an entire thing of the past. Right? One of the things that is always sort of remarkable to me is the human brain's inability to deal with exponentials, right? I think many people are concerned about the exponentiality of all the problems in the world today, right? Many, many things that are running away from us. But the inverse is true, too, right? Where exponentiality has enabled solar to be really cheap, has enabled DNA testing, that's minuscule fraction of what it was 20 years ago, smartphones, et cetera. And the same thing is true when we start talking about renewable water. We start talking about source hydro panels.

• 45:01Speaker 01

  And so, you know, the learning rates of technologies are really, really fast. And I think that's sort of what gets me really excited about technology and makes me optimistic about the future in general, but it makes me really optimistic specifically about what we do at Source.

• 45:18Guy Raz?

  Cody Friesen, CEO, founder of Source. Thanks so much for joining us.

• 45:22Speaker 01

  Thank you, Guy. I appreciate it.

• 45:25Guy Raz?

  Hey, thanks so much for listening to How I Built This Lab. You can follow How I Built This on Apple Podcasts, Amazon Music, or wherever you're listening right now. The next episode is available right now, or you can binge all of our episodes ad-free by subscribing to Wondery Plus in Apple Podcasts or the Wondery app. If you want to follow us on socials, we're at How I Built This on Twitter and Instagram, and I'm at Guy Raz on Twitter and at Guy.Raz on Instagram. This episode was produced by Catherine Seifer with editing by John Isabella. Our music was composed by Raptine Arablui. Our audio engineer was Neil Rouch. Our production team at How I Built This includes Alex Chung, Casey Herman, Carla Estevez,

• 46:09Guy Raz?

  Chris Messini, Elaine Coats, Josh Lash, J.C. Howard, Liz Metzger, Sam Paulson, and Kerry Thompson. Neva Grant is our supervising editor. Beth Donovan is our executive producer. I'm Guy Raz, and you've been listening to How I Built This.