For a few decades, homeowners with solar panels on their roofs have been taking advantage of net metering, which is where excess energy from their panels is fed into the grid in return for an energy credit, reducing their power bills.
The rise of battery systems that store excess generation for later use has led to the development of virtual power plants or VPPs. A VPP requires a storage system and software that tells the battery to send energy to the power grid when the grid needs more power, like on a hot summer day. A critical mass of home batteries scattered across a region are networked together to form a virtual power plant that utilities can call upon. Compensation for the utility tapping into a homeowner’s battery is either paid to the homeowner by the local utility itself or by a VPP program, of which there are now more than 500 in the US and thousands in Europe.
Over the past 15 years, battery energy density increased by a factor of 7 and the cost per kilowatt-hour of energy dropped by a factor of 10. This dramatic change in the economics of the technology has shifted batteries from being only a way to store energy to being an active grid asset.
Last year, the amount of US home battery capacity involved with virtual power plants grew by 153%. California’s VPP program has shown that a fleet of home batteries can be relied on much like a traditional power plant. During one two-hour test, roughly 100,000 home batteries delivered about 539 megawatts of energy, which is more than the output of a large gas peaker plant.
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References:
A Home Battery Revolution Is Reshaping the Power Grid
