What Is Software-Defined Energy? A Guide to the New Model Behind Modern Battery Storage
Software-defined energy is the design principle behind a new generation of battery energy storage systems, in which the behavior of the physical hardware — batteries, power converters, switching, and controls — is coordinated in real time by software, rather than fixed at the time of manufacture.
It is the same architectural shift that reshaped computing (software-defined networking, software-defined data centers, software-defined vehicles) now arriving in the power sector. And it is how modern storage systems are becoming fast, flexible, and cost-effective enough to meet the demands of AI data centers, the second-life EV battery economy, and an increasingly volatile grid.
This guide explains what software-defined energy means, why it is emerging now, how it differs from conventional battery energy storage systems (BESS), what it enables across markets, and how Volt Harbor is building one of the earliest commercial implementations.
Software-Defined Energy, Defined
At its core, software-defined energy describes storage and power delivery systems in which:
The physical layer — batteries, power electronics, switching gear, and controls — is treated as a set of coordinated resources rather than fixed, single-purpose hardware.
A software layer decides in real time how power flows through the system, how each battery module is used, and how the system responds to changes in load or grid conditions.
The interfaces between components are standardized enough that different battery chemistries, module formats, and vintages can operate inside the same system.
The result is a storage platform that behaves more like a programmable system than a fixed appliance. Its capacity, response profile, and cost structure can be tuned to the application — grid support one week, data center buffering the next — without redesigning the underlying hardware.
In practice, software-defined energy is often used interchangeably with related terms like software-defined power, software-defined battery systems, and programmable energy storage. All point to the same underlying shift: energy hardware becoming reconfigurable through code.
Why Software-Defined Energy Is Emerging Now
Three market forces have converged to make software-defined energy not just possible, but necessary.
1. AI data centers have broken the assumptions traditional power systems were built on
AI training and inference workloads ramp racks of GPUs from roughly 30% to 100% of rated capacity in seconds — sometimes milliseconds. Conventional power infrastructure was designed for smoother, more predictable load profiles. Grid connection queues in major U.S. data center markets now exceed four years, forcing operators to seek storage-based buffering and system consolidation to bring capacity online faster.
Software-defined energy platforms can deliver power at sub-100-microsecond speeds, ride through fluctuations that would otherwise trigger backup generation, and consolidate multiple discrete systems — storage, power conversion, switching, and controls — into a single integrated platform.
2. The second-life EV battery supply is scaling faster than the industry can process it
Industry analysts project that the supply of retired EV batteries will grow more than 10x by 2030. Those batteries still retain roughly 80% of their original capacity, but they arrive as a heterogeneous mix: different chemistries, different manufacturers, different model years, different states of health. Traditional BESS designs assume homogeneous, pre-sorted battery inventory. That mismatch has become the single biggest barrier to scaling second-life storage economically.
A software-defined architecture handles that heterogeneity at the power-electronics layer, eliminating the expensive sorting and matching step that has historically eaten the second-life cost advantage.
3. Storage is defying the broader clean-energy slowdown
Even as solar and wind forecasts have been revised downward following recent shifts in U.S. clean energy policy, BloombergNEF now projects the United States will add 204 GW of battery storage by 2035 — higher even than pre-policy estimates. Storage is one of the few categories in clean energy still accelerating, and buyers are increasingly demanding architectures that can flex across use cases (data center, C&I, utility) and across battery supply types (new lithium, second-life EV, emerging chemistries like sodium-ion).
The Four Layers of a Software-Defined Energy System
1. Batteries. The energy storage medium itself — which, in a software-defined system, does not need to be homogeneous. New lithium-ion cells, second-life EV modules, LFP, NMC, NCA, and emerging chemistries like sodium-ion can all coexist inside the same platform.
2. Advanced power electronics. A distributed set of power converters that handles mismatches between cells and modules without processing every watt through every converter. This is where the biggest efficiency and cost gains come from — and the reason software-defined systems achieve substantially higher energy utilization than conventional designs.
3. On-board computing. Local intelligence at the module and pack level that senses state-of-health, coordinates with neighboring modules, and executes the software's instructions in real time.
4. The software layer. The control logic that decides how the system responds to load, grid conditions, and operator objectives — from millisecond-scale power delivery to day-scale energy arbitrage.
What Software-Defined Energy Enables
For AI data centers, software-defined energy delivers the response speed and reliability profile that modern workloads require, while collapsing several discrete infrastructure categories — backup power, grid-tie, switchgear, uninterruptible power supply — into a single, integrated platform. That matters more every year as connection queues lengthen and time-to-capacity becomes the binding constraint on data center growth.
For utilities, software-defined energy makes second-life battery storage economically viable at scale. It also provides fast-responding, dispatchable resources for peak shaving, demand response, and buffering distributed energy resources on the edge of the grid.
For commercial and industrial buyers, software-defined energy delivers storage at roughly one-half to one-third the cost of new battery systems with equivalent capability, while providing on-site power quality, backup, and demand-charge management.
For EV charging networks, software-defined energy solves the "high-power charging exceeds local grid capacity" problem — buffering charging events with retired EV batteries. This is exactly the closed loop Volt Harbor is running with DTE Energy in Michigan, where retired EV packs now help charge the next generation of EVs.
How Volt Harbor Implements Software-Defined Energy
Volt Harbor's MAC-BESS™ platform is a commercial implementation of software-defined energy. Its patented Medium Access Control (MAC) architecture — modeled on computer networking — coordinates power flow between heterogeneous battery modules using a distributed set of small, coordinated power converters. In peer-reviewed testing, the platform delivers:
~94% energy utilization, compared with about 78% for conventional partial-power processing and 23% for full-power processing
10–20% of the power-conversion cost of a conventional BESS
Sub-100-microsecond response times, suitable for the reliability requirements of AI data centers
Aerospace-class reliability, with parts-per-million failure rates and no single point of failure
Second-life storage at one-half to one-third the cost of equivalent new battery systems, with usable life extended by up to 30%
Battery-agnostic operation across lithium-ion (NMC, NCA), LFP, and emerging chemistries such as sodium-ion
The platform is built on six patents licensed from the University of Michigan, backed by seed financing from MFV Partners, and currently in a utility pilot with DTE Energy — Michigan's largest utility — buffering high-power EV charging on the grid.
Frequently Asked Questions About Software-Defined Energy
What is software-defined energy?
Software-defined energy is an architectural approach to energy storage and power delivery in which software coordinates the behavior of the underlying hardware — batteries, power electronics, switching, and controls — in real time. It replaces fixed-purpose, hardware-defined systems with programmable platforms that can flex across applications and battery types.
How is software-defined energy different from a traditional battery energy storage system (BESS)?
A traditional BESS is a purpose-built appliance; a software-defined energy platform is a programmable system. Conventional BESS designs process all energy through power converters and require homogeneous battery inventory. Software-defined energy systems process only mismatched power, coordinate heterogeneous batteries in a single system, respond in microseconds, and scale modularly across use cases.
Why does software-defined energy matter for AI data centers?
AI workloads create rapid, high-magnitude power swings that stress traditional infrastructure. Software-defined energy platforms deliver sub-100-microsecond response, aerospace-class reliability, and consolidate multiple discrete systems into one — increasingly critical as grid connection queues in major data center markets exceed four years.
Can software-defined energy work with second-life EV batteries?
Yes, and this is one of the primary advantages. Because a software-defined architecture handles heterogeneity at the power-electronics layer, retired EV batteries from different manufacturers, chemistries, and vintages can be integrated into the same system without expensive sorting or matching. That drops the cost of second-life storage to roughly one-half to one-third the cost of a new battery system with equivalent capability.
Is software-defined energy the same as a virtual power plant (VPP)?
No. A virtual power plant aggregates many distributed energy resources into a coordinated pool using software — that is a fleet-level concept. Software-defined energy is a system-level concept describing how a single storage platform is architected internally. The two are complementary: software-defined energy systems make particularly good building blocks inside a VPP because they are fast, reconfigurable, and observable through code.
Who is building software-defined energy today?
Volt Harbor, an Ann Arbor–based startup spun out of the University of Michigan, is one of the earliest commercial implementations, with its MAC-BESS™ platform in a utility pilot with DTE Energy and applications underway in data center, commercial and industrial, and utility markets.
Learn more about Volt Harbor's MAC-BESS™ platform here.
