Australia’s home battery boom risks locking households into closed ecosystems

Australia’s home battery rollout is accelerating fast. More than 210,000 systems are already installed, and the federal government’s Cheaper Home Batteries scheme is set to drive many more.

But there’s a flaw at the heart of the policy, says tech entrepreneur and early renewables investor Simon Hackett: many households are unknowingly buying batteries that are effectively locked to a single manufacturer’s software.

“These batteries should be interoperable. In other words, any software should be able to run any battery,” Hackett told the SwitchOn Australia podcast.

Unless interoperability becomes a condition of subsidy, Hackett argues, Australia risks creating stranded assets and stripping consumers of control over devices they paid for — often with public money.

The lock-in problem

When Hackett launched his latest venture, home energy management startup Energy Autopilot, he ran into an immediate barrier. His software couldn’t control many of the batteries Australians are installing because manufacturers restrict access.

He says the energy industry is drifting toward the same vertical integration seen in smartphones.

“They would like you to sit in their ecosystem because that maximizes their income.”

But electricity infrastructure is not a phone ecosystem.

Hackett wants a world where whatever brand of battery a household installs, and whatever energy retailer they choose, they can also choose the software that ties those elements together, “rather than being locked into the decisions made by the manufacturer of your battery.”

That’s interoperability — the ability for any compliant software to control any compliant device. It’s the principle that made the internet work. Yet many battery vendors are choosing not to enable it.

A virtual power plant — or a real one?

The Cheaper Home Batteries scheme requires systems to be VPP-ready. But it only requires that you can connect to a VPP — not any VPP. In practice, many batteries being rolled out can only connect to the manufacturer’s choice of virtual power plant.

When households join a VPP, Hackett says, they surrender control.

“They control your battery. They decide when energy is bought and sold, and they decide what the profit share is, if any, between you and them.”

Participation rates to date suggest many consumers are wary. VPP take-up is currently “down in the weeds” at around 4%.

Hackett believes the scheme is asking the wrong question.

“There needs to be a policy mandate in the cheaper home battery scheme, not to say it must be VPP compatible, but to say it must be interoperable,” he argues.

Instead of aggregators running fleets of batteries for their own business models, Hackett says consumers should be able to act as direct participants in the wholesale market through agile retailers.

With a battery and open software, “you’ve become a real small power plant… just as validly contributing energy to and from the grid as Snowy Hydro.”

But that only works if batteries are open to third-party control.

Even retailers like Amber — one of the few that gives consumers direct access to wholesale pricing — can only support a limited number of battery brands because manufacturers restrict access.

“The idea that you can buy this thing and then discover, after the fact, that you bought a locked-up box that can only work according to the rules the manufacturer chose is nutty.”

The stranded asset risk

Lock-in is not just about choice. It’s about risk.

Many systems rely on cloud-based control, not a householder’s local area network — the internal network that connects devices inside a home.

If the cloud disappears, so does control.

“What happens when the manufacturer goes out of business? The cloud goes away, and you now own a boat anchor,” argues Hackett.

“You wouldn’t want to buy a car and then discover next year your car manufacturer has gone [out of business] and it won’t start anymore – that’s exactly the risk.”

Hackett’s startup enables local control via a device plugged into the household router, allowing systems to operate even if the internet drops out. But some manufacturers have removed local access.

Hackett says “some geeks” discovered a local network on a Tesla Powerwall working alongside the cloud system.

“Tesla’s response to that was to remove that local access path.” When Hackett approached Tesla about reopening access, he was told, “we don’t feel like it commercially.”

A simple fix

Hackett says the solution does not require heavy-handed regulation. The fastest way to achieve interoperability is to tie subsidy eligibility to open access — what Hackett calls “pulling on the wallet”.

“If the cheaper home battery scheme was modified to say we won’t keep subsidizing your brand of battery unless you provide interoperable, documented access to control it over the local network, then that would happen instantly.”

“It would cost the government nothing. It would cost the manufacturers nothing.”

And crucially, it’s not too late.

“We can solve this problem for all batteries that are in and all batteries that are going in with a software update.”

You can hear the full interview with Simon Hackett on the SwitchedOn Australia podcast.

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