It’s a model recently popularised in Australia’s residential segment: investors pay the upfront cost of installing behind-the-meter solar and battery systems, earn revenues from energy arbitrage and other streams, and recover the cost of the system over time by selling the electricity generated back to whoever is on the premises at a discounted rate. The difference is startup Tesseract ESS, headed by SwitchDin founder Dr Andrew Mears, is specifically targeting Australia’s underserved commercial and industrial (C&I) segment, particularly those in the regions, like diary farmers, agri-food and food processing businesses and manufacturing.
Tesseract ESS is launching into the Australian market today with the announcement of its partnership with Hyperstrong, a major Chinese energy storage system (ESS) integrator with a history in utility-scale. Hyperstrong is itself seeking to break into the Australian market, opening a new Asia Pacific headquarters in Sydney this week.

Image: Tesseract ESS
Tesseract ESS will work with Hyperstrong to install 2 MW to 5 MW systems, a sizing range Mears calls a “sweet spot” – small enough to avoid the most cumbersome red tape and yet large enough to generate real revenues from Frequency Control Ancillary Services (FCAS), wholesale demand response and network services, and wholesale energy arbitrage, especially when aggregated by SwitchDin’s Virtual Power Plant (VPP) platforms.
While this multi-megawatt realm will be the primary focus, Tesseract ESS is also working with battery supplier Weiheng, which uses CATL cells, to offer systems between 200 kW and 2 MW.
Mears says the ambition is to work with these two suppliers to come up with what he calls “full tech packs,” integrating Energy Management Systems (EMS) and other ESS management systems to optimise the value of these distributed assets for their ultimate owners – third party investors.
These profits will then be ‘shared’ in a sense with the consumer, who will be able to access the electricity from the system at a roughly 20% lower rate than their existing energy tariff via a 10+ year Power Purchasing Agreement (PPA). Similar iterations of this model have already hit Australia’s residential segment offered by NRN and Lavo.
Mears, though, believes it can be a particularly powerful proposition to the C&I segment, not only because the systems are bigger and more complicated (and therefore stand to benefit more from expert guidance), but also because farmers, manufacturers are other businesses need pathways to meet their own own Environmental, Social, and Governance (ESG) reporting requirements.
This third-party ownership model also crucially helps overcome the fact most C&I properties are leased, making outright ownership investments tricky. Companies like EleXsys Energy have been trying to solve this conundrum for some time, yet Mears says it is only recently that C&I technologies, namely storage and software options, have enabled this to become a viable proposition. “Really, we’re seeing a big shift in global supply options for the technology, which is really bringing this opportunity to the fore for C&I,” Mear told pv magazine Australia.
The other crucial element of this particular play is data. For Tesseract ESS’ model to work it needs asset investors. “And what they’re looking for is data and visibility.”
“We need to make these projects much more bankable, so we’re making a commitment to provide an unprecedented level of visibility on performance – physical, environmental and economic performance of these assets,” Mears says.
Even though storage plays in Australia have performed extraordinarily well for companies like Neoen, the fattest lump sums tend to come from unexpected events like coal plant outages and other grid disruptions and remain difficult to translate to solid project bankability.
“The problem is that a lot of financiers at this point won’t really look at market revenue, and we need to shift that expectation. I think thats only going to happen with a lot of good data over a period of time,” Mears says.
The variability of Australia’s intraday energy price spread has increased significantly since 2018 – and while Australia’s big battery bonanza may shave some of the sharpest edges, Mears is firm in his belief that large pricing spreads will remain a characteristic of energy markets with high renewable energy penetrations, like Australia.
“The other key thing is that it takes too long in Australia to get one of these batteries installed. It’s an 8-12 month process for a reasonable sized system with a C&I customer and that’s way too long. So we are really focussed on digitising and accelerating that whole project life cycle,” he says.
Tesseract ESS is using its own vocabulary to describe each of the elements within its offering, calling the hardware components the ‘Unity Node’, the software elements the ‘Unity Ops’, while the technologies that digitise and make visible what’s going on with the asset fleet are called the ‘Unity Suite.’
The final two elements of this system are the ‘Unity Energy Plan’ – the PPA program which allows renewable systems to be installed at no upfront cost to consumers and provides them with an ongoing discounted electricity rate – and the ‘Unity Growth Fund’, the investment platform enabling it all.
The Unity Growth Fund, Mears says, really “backends” the whole model. Tesseract ESS has already secured funding to cover its initial pilot projects, which Mears says are installed and commercially operating today, though no further details could be provided at this stage.
Mears says Tesseract ESS’ focus for the rest of the calendar year will be on streamlining its processes. In 2025, though, the focus will turn to marketing the Unity Growth Fund, which will seek to raise funds in a number of tranches, opening to both debt and equity finance. While the kinds of returns investors can expect are not yet being made public, Mears says they will be “market competitive.”
Given this model does not require any CAPEX investment from the customers on the premises where the systems are installed, Tesseract ESS has wiggle room on how it prioritises the output of its systems. That is, while Tesseract guarantees it will cover a certain amount of the customer’s consumption at a discounted rate, most customers will still be consuming some electricity from the grid. Energy independence and round-the-clock access to decarbonised energy is not part of the deal, allowing Tesseract to respond to high pricing events without the divided loyalties that have plagued other VPP and community battery configurations.
Be this as it may, customer decarbonisation remains a focus for Tesseract ESS, Mears says. “Over time, we are looking to support customers on their electrification journey, so we also have options for customers to continue to improve that arrangement,” increasing the percentage of electricity they use from the solar and battery system compared to what they take from the grid.
At this stage, Tesseract is launching only in the National Electricity Market (NEM), across Australia’s eastern seaboard, though Mears says extending into WA is a possibility for the future.
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