Energy Tips, Solar & Renewables
Can Joining a VPP Save You Money on Your Electricity Bills?
Learn how VPPs work, what they offer, and whether the savings make sense for your household.
- What Answers You’ll Get On This Page
Important Points
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When linked with other home systems, your solar and battery work together like a virtual power station to support the grid.
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Providers often reward households with bill credits, rebates, or cheaper rates for sharing stored energy.
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How much you earn depends on your battery size, usage habits, and the terms of your provider’s program.
Not long ago, Virtual Power Plants (VPPs) sounded like something for the future. Today, they’re available to everyday households through retailers like AGL, Origin, and Energy Australia, as well as other innovative providers. Thanks to government rebates and incentives, it’s now easier and more worthwhile for solar households to get involved.
What is a Virtual Power Plant (VPP)?
Your home solar and battery system isn’t just an energy source for you, it’s one player in a much bigger orchestra powering our grid.
That’s the general idea behind a Virtual Power Plant. Thousands of rooftops equipped with solar panels and batteries are linked together to replicate a large-scale power plant, stepping in to help the grid when there are either supply drops or high demand.
VPPs offer an innovative solution; aggregating storage across many homes to smooth out fluctuations and keep the power on when renewables alone can’t handle high demand.
Across Australia, there are currently around 138,793 battery and solar systems installed in homes and businesses¹.
Expert Tip
Did you know? 38,200 customers are actively participating in Virtual Power Plants in 2025².
When compared against the roughly 10 million residential and small business customers across New South Wales, Victoria, Queensland, and South Australia, it’s clear that VPPs still make up a relatively small portion of the market.
That said, momentum is building. The ACCC has reported that VPP participation has grown at nearly 22 per cent every six months over the past two and a half years, highlighting a steady upward trend.
A further boost has come from the Federal Government’s Cheaper Home Batteries Program, which launched on 1 July. This initiative provides subsidies on eligible batteries, but with the requirement that they must be VPP-ready.
In fact, the Australian Energy Market Commission noted that around 20,000 batteries were installed and registered in just the first month of the program³.
1How Can a VPP Save You Money?
Generally speaking, joining a Virtual Power Plant means your home battery isn’t just sitting idle until you need it. Instead, it’s working smarter, storing energy when it’s cheap or free from your solar system, and sometimes sharing that energy back to the grid.
For program participants, this could translate into bill credits or rebates offered by your provider in exchange for letting them draw on your stored energy during peak times. The exact savings depend on your provider’s program, but many VPP programs pay you back in a way that helps offset high costs.
For example, the ACCC estimates that those participating in VPPs can save even more, ranging from an additional $56 in Victoria to $197 in New South Wales⁴, though the number varies based on battery size, usage habits, and how often the VPP taps into your system. It’s not a windfall, but it’s a meaningful way to get a bit more value out of your solar and battery investment.
What Factors Can Impact Your Savings
Your actual returns will vary widely based on several factors, such as:
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Battery size: Bigger batteries store more, so they can offer more potential earnings.
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Household energy habits: If your battery is frequently in use, there’s less capacity for VPP contributions.
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VPP activity: How often the network draws power from your battery matters; more activity can mean more credits.
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Plan/provider terms: Some contracts favour bill credits, others offer fixed payments or rebates.
Set realistic expectations; your earnings might differ from your neighbour’s.
3Who Can Join a Virtual Power Plant (VPP) in Australia?
To be eligible for VPP incentives and participation, households must meet specific technical and program requirements. Here’s what you need to know:
1. Grid-Connected and VPP-Capable Battery System
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Your solar battery (including the inverter) must be technically capable of participating in a VPP at installation to qualify for Small-scale Technology Certificates (STCs) under Australia’s federal Small-scale Renewable Energy Scheme (SRES). This includes the ability to communicate remotely and respond to grid signals.
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Off-grid systems located more than 1 kilometre from the grid are exempt from needing VPP capability, but if VPP-capable batteries are installed off-grid, they may still receive support.
2. Battery Capacity and Accreditation
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Under the Cheaper Home Batteries Program, eligible systems must have a combined usable capacity of at least 5 kWh and not exceed 100 kWh.
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Your battery and inverter must be Clean Energy Council (CEC) accredited and listed on the relevant approved product lists at the time of certification.
3. Installation Requirements
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The battery must be installed by an accredited installer and comply with all electrical and safety regulations.
4. Network Connection and Export Approval
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Your system must be connected to the electricity grid and have export approval from your Distribution Network Service Provider (DNSP)
5. Communication Infrastructure
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To participate in a VPP, your system must have a stable internet connection for real-time communication with aggregators or network operators.
How Do I Join a VPP Program Near Me?
While the details can vary between providers, many Virtual Power Plant programs follow a similar process. Here’s how it usually works.
Step 1: Choose a VPP provider/program
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Compare the VPP options available in your area. Programs can differ widely, some are offered directly by battery manufacturers (for example, Tesla’s program for its own models), others by independent providers, and many through major energy retailers. Each provider has its own conditions, so it’s worth reviewing which option best fits your setup and goals.
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Providers will check your eligibility for the incentive.
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You may need to change your electricity retailer (not all retailers are compatible with VPPs).
Step 2: Sign the contract and nomination form
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Your chosen provider will supply a contract and a nomination form.
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You must sign the nomination form before any incentive can be paid.
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The contract sets out the payment terms, the amount of battery capacity the VPP can use, and when your battery may be dispatched to support the grid.
Step 3: Onboarding and receive your incentive
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After the paperwork, you’ll have a cooling-off period to review, amend, or cancel your agreement
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When the cooling-off period ends, your provider may send an online form to confirm your enrollment. Complete it to confirm your details.
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Once confirmed, you’ll receive your incentive (as per the provider’s process).
Your installer or provider will check that:
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You have a smart meter and a reliable internet connection to enable real-time VPP communication.
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Your battery or inverter works with VPP software (sometimes requiring a firmware update).
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You’ve received export approval from your electricity distributor (DNSP) to feed energy back into the grid.
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Your system is registered with a valid National Metering Identifier (NMI), the unique meter number used for billing, rebates, and VPP participation.
Things to Think About Before You Join
Of course, VPPs aren’t perfect. There are a few considerations to keep in mind:
Battery Availability
Sometimes your battery may discharge to support the grid when you weren’t planning on it. This could leave you with less stored energy for your own evening use.
Wear and Tear
More cycling of your battery might raise questions about its lifespan. That said, most VPPs carefully manage battery health to minimise impact.
Limited Access
Not all providers offer VPP programs, and availability can depend on your location. It’s worth checking what’s open to you before opting in.
Joining a VPP is about balance: the rewards are there, but so are the trade-offs.
So, Should You Join a VPP?
4Here’s the straightforward answer: Yes, joining a VPP can save you money, but the amount depends on your battery, program type, and location. For some households, it could be a few hundred dollars per year. For others, it’s the satisfaction of knowing their battery is helping the grid while making better use of solar power.
Author
Benjamin TomBenjamin is a utility specialist passionate about creating informative content about the energy, internet, and solar markets. With extensive experience in the telecommunications industry, Benjamin drives our unique blog posts, articles, and reviews. He is focused on breaking down the technical jargon so our readers can better understand the telco market and industry. Whether he is comparing the latest internet deals or creating unique guides, Benjamin takes great pride in creating helpful, easy-to-read content.
Sources:
¹ Clean Energy Regulator, “Battery and Solar Installations Data,” 2025.
² ACCC, “Virtual Power Plants Participation Report,” 2025.
³ Australian Energy Market Commission, “Cheaper Home Batteries Program Installations,” 2025.
⁴ACCC via Australian Energy Council, Competition a Key to VPP Development, 2024.
