Virtual Power Plants

A Virtual Power Plant (VPP) is essentially a network of connected solar batteries from both households and businesses. Individual home batteries store energy generated from rooftop solar and are virtually connected together to create a bank of electricity, just like a power station. It creates a community energy storage system built on renewable solar energy that’s both good for the environment and helps alleviate the grid during peak demand periods.

The connection is completely wireless and requires no installation. If you sign up for a VPP, it’ll be added to your electricity plan and once you’re connected, your retailer will have the option to remotely manage your solar battery. This might mean reducing your electricity during demand times to alleviate pressure on the grid or using your solar battery to power your home and send any remaining electricity back to the grid.

Your retailer will also typically have an app or website-based portal that allows you to track and manage your energy use.

Most Virtual Power Plants won’t have lock-in contracts; if you are connected to a VPP, you can still switch electricity retailers, but you’ll likely need to switch what VPP you are on as well. However, not all retailers may offer a VPP connection. If you’re interested in joining a VPP or staying connected when you switch, you may want to consider what VPPs are available to you.

When switching, you should also compare electricity prices and solar feed-in tariffs as they’ll vary between retailers.

In order to join a VPP program, you must meet several eligibility requirements, such as:

• Not already being a part of a VPP, or are able to switch
• Have already installed, or plan to install, a solar system with solar panels and a solar battery compatible with a VPP
• Have a smart meter
• Have a reliable internet connection
• Live in an eligible location (e.g. a deregulated area within the National Electricity Market [NEM] in NSW, VIC, QLD, TAS, ACT and SA)
• Not have anyone in the household who relies on life support.

Be aware that the type of energy storage needed to join a VPP may vary depending on which VPP you want to join, meaning you may not be able to switch between some VPPs if your battery storage is not compatible with both.

Retailers may offer some incentives to participate in a VPP, but it’ll vary depending on your location, eligibility and which retailer you choose. Some possible VPP offers may include:

• Getting a credit on your bill for sending excess energy to the electricity grid
• Getting a discount on your electricity bills
• Getting discounts or rebates on the cost of installing a solar battery.¹

If you’re interested in joining a VPP, you may want to check what incentives are offered before switching retailers. Some state governments may also offer their own incentives. For example, joining a Virtual Power Plant in NSW may make you eligible for their incentive of up to $400, depending on the size of your battery.²

VPP providers may offer financial benefits such as a reduction in your energy bill or credits applied to your bills for providing excess electricity to the grid, though the amount you save may depend on which VPP you join and the amount of electricity you’re supplying to the grid. But these aren’t the only benefits to joining a VPP.

A VPP is also a great way to create a cleaner environment by using renewable energy sourced from the sun. Not only are you reducing your own emissions, but by joining a VPP, you’re helping your community lower their reliance on non-renewable energy sources such as coal and gas. This also helps create a smoother, more stable electricity grid that lowers the risk of potential power outages or blackouts from the grid being overwhelmed (e.g. on hot days where everyone turns on their air conditioners or other cooling appliances).