How to Join a Virtual Power Plant (VPP) and Decide if You Should

What happened

• A Virtual Power Plant (VPP) is a collection of household devices (like smart thermostats, EV chargers, home batteries, and solar panels) that a utility company can control.
• Utilities want to treat these devices as a VPP to command them to use less electricity during peak hours.
• In return for participation, utilities offer VPP participants discounts on energy bills and sometimes signing bonuses.
• Seth Frader-Thompson, CEO and cofounder of EnergyHub, noted that while throttling one home is small, at a scale of hundreds of thousands or millions, it has a profound impact, equivalent to firing up a power plant.
• As of 2023, there were over 500 VPP programs in the US, and an estimated 4 million households with smart thermostats were enrolled.

Why it matters for me

Participating in a VPP can lead to significant savings. Home battery and EV devices could yield hundreds or thousands of dollars in annual savings. While some programs offer bonuses, the main benefit is managing energy usage efficiently. However, flexibility is key; some households may not have the flexibility to adjust usage during peak hours due to work schedules or caregiving responsibilities.

What to remember

• Check if your utility company has a program and ensure they support your specific devices. Look for terms like “demand response” or “smart thermostat rewards.”
• Eligibility rules vary widely based on device brands, utility territory, and rate plans.
• Review the opt-out rules carefully, as participants usually have the right to override temporary changes made by the utility.
• Be aware that programs may collect data on charging status or home usage patterns; ensure you understand how this data is used.
• The best VPP program is the one that clearly shows what you can control, the compensation offered, and how easily you can say no.

Source: Original article