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How does a Virtual Power Plant work?

Virtual Power Plants (VPP) are the next evolution of solar energy. They are a way for you to take your solar to the next level, and save money while you do.

What is a Virtual Power Plant?

Virtual Power Plants (VPP), also referred to as battery aggregation or energy sharing, are the next step for solar energy. They are a way for households to derive more benefits from their solar panel PV and battery systems and drive down their energy costs even further.

A VPP connects batteries in an energy sharing network.

How does a Virtual Power Plant work?

Energy generated from renewables varies from day to day. On a cloudy day, for example, solar energy generation dips and demand increases meaning energy supply can vary. Our demand for energy also varies as we come and go from our homes, or during extreme weather when we use more heating or cooling appliances for example.

VPPs help to balance that supply and demand of energy. They connect households and their batteries through networks, to help manage energy flow and reduce reliance on the grid in times of higher demand.

The following video explains a bit more about how VPPs work.

What does energy sharing mean for my household?

Sharing energy has benefits for individuals, communities, and the environment. To take part in a VPP program, you need to have solar panels and a solar battery installed. The Virtual Power Plant pilot program by Solar Victoria offered solar battery rebates to help Victorians join approved VPP programs.

Each of the Solar Victoria's approved VPP programs offer different incentives – like discounts on hardware, reduced energy bills or regular compensation for taking part. Some are available state-wide, while others are tailored to a specific area.

Each program works differently, however by taking part in an approved VPP program, households will get compensation for sharing their excess energy and can access better energy deals.

Once established, you don’t have to do anything to share energy with the VPP network, however you can track the energy through apps, devices or web-based portals, depending on the program you join.

Joining a VPP is a smart investment. Customers can get a rebate on battery installation, make money providing power to the VPP network, and lower electricity bills – all while making a significant contribution to the advancement of renewable energy in Australia.

Find out more about virtual power plants and energy sharing, the financial and environmental benefits.

Reviewed 12 January 2023

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