The Integration Tax Killing DER Growth
If you manufacture batteries, solar inverters, EV chargers, thermostats, or heat pumps, you're in a race to get your devices into utility programs. These distributed energy resources (DERs) are increasingly valuable to the grid. And program eligibility directly impacts purchasing decisions—homeowners ask "can this battery get me into my utility's program?" before they buy. If the answer is "no," you lose the sale to whichever manufacturer can say "yes."
But the path to program access is broken. And not just for technical reasons.
#The Competitive Reality
Utilities run incentive programs that pay homeowners hundreds of dollars per year for participating in demand response—batteries that discharge during peak hours, thermostats that adjust during grid stress, EV chargers that shift charging to off-peak times. These programs create real demand for devices. When a homeowner can earn $300-500 annually just by letting their battery participate in grid events, that changes the purchase calculus.
But here's the problem: most programs only support a handful of device manufacturers. Often just one or two.
This isn't because of hardware quality. It's because the cost of supporting multiple manufacturers is too high for utilities to manage. Integration is expensive. Ongoing support is expensive. So utilities default to whoever has the largest market share and call it a day.
If you're not integrated, you're not just missing a feature. You're losing sales to competitors who are.
#The OEM Locked Out of Revenue
This isn't theoretical. Let me give you a real example.
Vermont Electric Cooperative ran a battery program that, until recently, only supported one manufacturer. It's not that they didn't want to support more—they absolutely did. More manufacturers means more of their members can participate. But the co-op had a small team, and the cost of supporting additional manufacturers—onboarding, integration, ongoing technical support—was simply too high for them to manage on their own.
The result: every other OEM was locked out of that market. If you sold a different brand, your customers couldn't participate in the program. They couldn't earn the incentives. Same battery capability. Same grid benefit. Different outcome—purely because of integration status.
And this is Vermont Electric Cooperative. A single co-op. Multiply this across thousands of utilities and hundreds of programs nationwide, and you start to see the scale of the problem.
Your competitors with bigger integration teams are getting into programs you're not. Not because they have better hardware. Because they can afford the integration tax.
#The Fragmentation Problem
To compete nationally, OEMs must integrate with a patchwork of software platforms that utilities use to run these programs. EnergyHub. Virtual Peaker. OATI. AutoGrid. Voltus. The list goes on.
Each utility picks one provider for their territory. If you're not integrated with that provider, you're locked out of that market. Full stop.
Now multiply this across thousands of utilities, each with their own provider, their own technical requirements, their own integration timeline. Every integration is a separate negotiation. A separate MSA. A separate engineering project. A separate ongoing maintenance burden.
Meanwhile, your software team is supposed to be building features that sell more hardware and delight customers. Instead, they're spending months building undifferentiated integration pipes just to reach parity with competitors.
#The Real Problem: It's 1995 Everywhere
Here's what makes this worse: the integration process itself is stuck in the enterprise software dark ages.
Every integration requires a bespoke MSA. Months of negotiation. Legal review. Procurement cycles. And fees. Fees on all sides:
- Platforms charge OEMs to integrate
- OEMs charge platforms to access their APIs
- Everyone takes margin at every layer
Nothing is self-service. You have to ask, negotiate, lawyer up, and wait.
After weeks of emails and dead ends trying to figure out who I could even talk to, I finally found the technical person at one OEM and got on a call. I came prepared for a technical discussion about how to connect our systems. I'd already found their technical documentation online—it was technically public, you could Google it—so I assumed getting started would be straightforward.
It wasn't. Thirty minutes into what I thought was a technical call, the engineer asked, "What's in it for us?"
I was flabbergasted. This was supposed to be a technical call. Instead, I found myself making a business case to an engineer about why sharing data has value. And even if I convinced him, the documentation I'd found was useless without official access credentials—and those required negotiating a partnership agreement with their business team first.
Public documentation. Private access. The appearance of openness without the reality of it.
Here's the kicker: that was 2023. Today, those public docs are gone entirely—replaced with a PDF you can only get after signing an NDA. The industry didn't just stay stuck in 1995. It went backwards.
That trajectory would be unthinkable in other industries. Take Stripe, which powers payment processing for millions of businesses. Or Twilio, which lets any developer send text messages and make phone calls through simple software commands. Or Plaid, which connects bank accounts to financial apps. These companies process billions of dollars and handle incredibly sensitive data—yet any developer can read their documentation, grab credentials, and start building in an afternoon. No sales call. No NDA. No six-month procurement cycle.
In energy, we're moving data about battery charge levels. And somehow that requires more paperwork than processing credit cards.
The entire modern software ecosystem has moved past the "call us for pricing, sign an NDA, wait six months" model. That was how enterprise software worked in the 1990s, before Salesforce pioneered the idea that business software could be self-service. Every other industry got the memo. Energy is still faxing purchase orders.
#The Uncomfortable Truth
Here's something the industry doesn't talk about openly: some device manufacturers also operate DERMS platforms. And some of them restrict API access to anyone who might compete with their grid services business.
Vertical integration used as a weapon to lock out innovation.
This isn't theoretical. At least one major player has had an FTC complaint filed against them for anti-competitive API restrictions. They own a popular device used for demand response, and if you apply for developer access and mention anything about energy management—helping homeowners respond to peak pricing, participating in demand response—you get rejected. Their terms explicitly prohibit it. Meanwhile, they also bid on utility contracts to manage those exact programs. They get exclusive access to their own device data while blocking everyone else.
Startups trying to build whole-home energy management apps can't access that device's data to help homeowners save money. They're locked out. And the company doing the locking is the same one competing for the utility contracts those startups are trying to serve.
I'm not naming names, but if you're in this industry, you probably know who I'm talking about.
After years of trying, we finally got access to one major DERMS platform's API docs. Their response: "Don't tell anyone you have access until we negotiate the MSA, determine fees, and schedule a press announcement."
Imagine if Salesforce operated this way. You grab an API key, start building, and they call to say you can't mention the integration publicly until legal signs off. It's laughable. Nobody would care. But in energy, access itself is treated as a strategic asset to be rationed.
#Why OEMs Charge Fees (An Honest Acknowledgment)
To be fair: OEMs charge fees and restrict access because managing API integrations isn't their core business. Your software team should be building features that sell hardware and delight customers—not maintaining integration infrastructure for third parties.
The problem isn't that OEMs are greedy. It's that the ecosystem forces everyone into defensive, margin-protecting behavior. When every integration costs real engineering time and creates ongoing support burden, of course companies try to recoup those costs. Everyone is rationally responding to a broken system.
This is also why integrating with Texture is different. Our integration is fully automated—no manual processes, no custom engineering work on your side to support each new program. The lift is dramatically lower than a typical platform integration, which means the cost equation changes. When integration doesn't require dedicated engineering resources to maintain, the justification for high fees disappears.
#The Industry Impact
This fragmentation has real consequences:
- Slower DER adoption overall. The friction in the system means fewer devices get enrolled in programs.
- Fewer devices enrolled in programs that need them. Utilities can't get the grid flexibility they're paying for.
- OEMs lose sales based on integration status, not product quality. The best hardware doesn't always win.
- Innovation stifled. Only incumbents with integration armies can compete nationally. Smaller, more innovative OEMs get locked out.
- Unreliable customer experiences. When every integration is bespoke, there are no common standards. What happens when an EV charger doesn't start charging after a grid event? What happens when a battery doesn't respond to a dispatch command? Without standardized behavior, customers get inconsistent experiences—and they blame the OEM, not the integration.
Even software companies trying to build services that help OEMs access these programs can't get in the door. The gatekeeping locks them out too.
#There's a Better Way
The integration tax isn't just inefficient. It's slowing down the energy transition.
But it doesn't have to be this way. There's a model where you integrate once and access a growing network of programs. Where you don't need lawyers to get started. Where your competitors' integration status doesn't determine whether you can compete.
In Part 2, I'll explain what "integrate once, access everything" actually looks like when you remove the permission layer. And why the best OEMs should want this world.
This is Part 1 of a three-part series on OEM integration. Stay tuned for Part 2: Integrate Once, Access Everything.
