Is this not free market capitalism?

Domestic electricity was too expensive (and I’m assuming producers would rather pass the costs onto consumers rather than spend their own money and build solar/battery plants themselves), so individuals with capital did the cost-benefit analysis and determined that installing solar is cheaper in the long term.

This drove the price of electricity down during the day, causing the cost-benefit of home-scale batteries to become positive over a reasonable timescale. Thus, people with capital invested money for a positive ROI over a medium term!

The government subsidies level the playing field so it’s not only the upper-class that can benefit from this phenomenon - they are providing equity, not equality. And, cutting out all the middle management waste of the large utility companies, meaning Australians get more electricity for their buck.

Modern capitalism is what failed here. The Australian power providers should’ve gone down this route, but (I’m assuming) shareholders would be upset about ROI on the scale of 5-20 years. Homeowners are more reasonable.

No. The modern grid has little relation to capitalism. There is some private ownership, but there are massive government barriers to entry and massive regulation of the system.