Redback Technologies has attracted $9.3 million in investment from leading retailer EnergyAustralia in a partnership aimed at developing its energy-saving technology.
The partnership will promote the economic benefits of solar technology and allow Redback to “employ a developer each week for the foreseeable future,” says Redback founder and managing director Philip Livingston.
The investment is all about developing Redback products to support what Livingston says is “the grid of the future”, where hardware augmented by cloud-based software that constantly “learns” from householders’ energy consumption patterns will push down their energy use and bills.
But a fundamental change in the domestic energy market can only happen if the technology is available.
EnergyAustralia will promote the Redback Generation 2 Smart Hybrid Solar Inverter System to its 1.7 million customers in Victoria, NSW, Queensland, the ACT and South Australia.
The company is also planning new hardware launches and Livingston expects it will need to raise more capital in the future.
“As a start-up, you focus your resources on immediate things. You have a [smaller] capital base and you need to have laser vision on one product and one strategy,” he says. “Having a broader volume of capital allows us a bit more leeway in exploring technologies.”
Redback was founded in April 2015, less than two years ago, but already has built a reputation and is dropped in casual conversation among industry leaders as one to watch. Livingston sketches out a quick timeline of the company’s history. In autumn 2014 the founders approached Chinese inverter manufacturer Goodwe with a deal in which patents were exchanged for a majority stake in Redback. “It wasn’t even a company then,” he says. “It was a concept.” Goodwe agreed on the condition Redback lent its expertise in developing and commercialising new technology.
With products to push and funds in reserve, the company is prepared for when the economics of home energy systems tip in its balance. At current prices, Livingston admits an investment in intelligent systems connected to rooftop solar does not exactly look cheap. “Hardware is not inexpensive enough to provide a rational return on investment,” he says. “But that being said, our mission from the start was to design hardware that could install fast and [potentially represent] a five-year return on investment. We’re not there yet, but we’re better than seven years.”
Improvements in value have come from the “smarts” in the Redback system, he says, which will help consumers take part in the grid of the future, where consumers are able to make choices about when energy is used, trading energy and being part of virtual power plants.
“The choices afford consumers empowerment,” he says, and allow them to choose a different path than the “dirty grid” we currently have. “This evolution of thought is something most energy companies understand, whether they like to admit it or not,” he says. EnergyAustralia’s investment in Redback is a testament to that, he says.
On the same page
Stakeholders at the energy retailer giant who were involved in the deal understand consumer empowerment, he says, which is why initial conversation about collaboration moved quickly to investment.
“This is where the market is going, this is what is required in the grid of the future. It’s been an impressive journey because although we discussed the ethos a little bit at the beginning of the journey, it’s always been an understood quantity … both parties agree the future of the grid is one where the consumer is central.”
If relations between the incumbent energy providers and the renewable energy crowd sometimes seem a little hard to read, and where “green speak” so often looks like a smoke screen, Livingston’s appraisal of the partnership with EnergyAustralia is crystal clear: “I don’t think we could be better suited [to each other] than we are.”
When a small company and large company harness each other’s strengths, he says, it’s the little guy who gains from increased ability to focus on long-term strategic planning. It begs the question: maybe EnergyAustralia would one day consider buying you outright? “If they acquired us, we would move at the speed of them, and that would negate the strength of investing in us and keeping us nimble and external,” he told EcoGeneration while travelling between Abu Dhabi and Dubai.
Green to the core
Livingston confesses he’s in the game for ideological reasons. “I want to see change. That’s what drives me,” he says. “I’d like to see a grid that’s powered by renewables; I’d like to see a transition; I’d like to stay in the company until that happens.”
So far, the explosion of web-based ways to trim energy use has been more hope than action. The utilitarian tools for the masses seem a long way off. At Redback, he says, the idea is that software will be able to pin down which appliances or processes are chewing through the most electricity and controlling their activation via the cloud, so that consumption of solar-generated electricity is optimised over “expensive chemical storage”.
“A lot more devices these days have integrated sensors, and those sensors make those devices, in effect, smart, and able to be connected to an intelligent system,” he says.
Redback’s Ouija Board function allows some sensor-less devices to be controlled. The company’s solar solution is hosted on Microsoft’s Azure IoT Suite cloud platform, ensuring easy updates and upgrades as the technology develops. It runs on a cloud-enabled intelligent system for analytics and remote control, so households can control when energy is used.
Throw on a jumper
Of course, the best way to cut power use is to not use any. That means open windows in summer and woolly jumpers in winter … if it were only so easy to dissuade the masses from turning on power-hungry air-conditioning and heating units. People do not like their comfort being affected, and they are happy to pay a premium for unnecessary heating in winter and cooling in summer (using a greenie’s internal thermostat as a benchmark for comparison).
“You’ve hit the nail on the head,” he says. “That’s the reason the conservation movement has failed.
“The whole purpose of our system is to not affect consumer comfort, by using machine learning to learn about you and your consumption … and optimise that.”
The investment will therefore be used to hire a tonne of Australians to solve these problems of the “burgeoning clean tech economy”.
More than 80% of the hires will be in Brisbane, where the company is headquartered.