WHAT IS THE NSW VPP REBATE?

The VPP rebate in NSW is designed to help reduce network demand during peak periods. Being under the Peak Demand Reduction Scheme (PDRS), the Government are incentivising household battery owners to contribute to a network of other participants to help supplement load during peak periods.

Joining a Virtual Power Plant (VPP) enables your energy provider to access small amounts of energy in your battery and export them during high-demand periods, which earns you rewards. These rewards differ from retailer-to-retailer, and they also vary in how the rebate/incentive is provided to customers.

The VPP subsidy can be combined with the Cheaper Home Batteries program - Australia’s federal battery subsidy which is also designed to help homeowners and businesses invest in solar battery storage.

WHAT EXACTLY IS A VIRTUAL POWER PLANT?

A Virtual Power Plant is a network of households and businesses that all work together to supplement the grid with battery exports during peak periods. Energy retailers can access small amounts of energy in participants’ batteries to be exported to the grid in return for rewards like bill credit.

The idea is that with everyone contributing to higher energy demand periods, it helps reduce grid stress without having to ramp up power stations that struggle to keep up.

Think of a hot summer’s day for example - during the day, solar can keep up with demand by supplementing the grid with valuable solar energy. But what happens when the sun is down? What we start to see is continued demand during the evenings as households keep their air-conditioners running. Instead of looking at it from an individual perspective and how households can use their own individual microgrids, VPP networks use algorithms to export a network of connected batteries in unison. More about Virtual Power Plant networks here.

HOW TO BE ELIGIBLE FOR THE NSW VPP INCENTIVE?

To be eligible for the NSW VPP Rebate, you must:

• have a battery capacity between 2-50kWh (rebate calculations depend on up to 28kWh)
• be an Australian resident
• have a VPP-compatible battery installed
• have a minimum of 6 years warranty remaining
• have not already claimed the VPP rebate on the same NMI
• be grid-connected
• be installed by a SAA-accredited installer

It’s also important to note that to claim the NSW government VPP rebate, households and businesses no longer need to have solar installed. Explore the battery subsidy requirements here.

HOW MUCH IS THE VPP INCENTIVE WORTH?

The Virtual Power Plant rebate amount is determined by the capacity of the installed battery. Because it has a per/kWh calculation, the total capacity will vary from a 13.5kWh Tesla Powerwall to a 40kWh GoodWe ESA battery.

When the right battery is connected to an eligible VPP network, certificates are generated based on how much the battery could reduce the peak demand. Those certificates are then sold, and their value is passed on back to the customer as an incentive payment. We also see this system in both the federal solar and battery rebates with STCs.

According to MAC Trade Services, a Tesla Powerwall 3 VPP rebate through Amber earns you around $470. Using a 20kWh Sungrow SBH200, you can claim around $652 in VPP rebate rewards. According to MAC’s website, here are the VPP calculation results for Tesla Powerwall.

HOW DO I CLAIM THE VPP REBATE?

Luckily, claiming the VPP rebate is a pretty easy process. Once your battery has been installed, you are ready to start your claim.

Compare quotes from VPP retailers: Using tools like WATTever, solar battery owners can research Virtual Power Plant providers and compare benefits, pricing, and plans from various retailers.

Sign up with a VPP Retailer: Once you find the preferred option, you can sign up via their sign-up methods. The energy retailer will send you their terms & conditions, a nomination form, as well as an application form – where most VPP providers use MAC Trade Services.

For a VPP application, they require the following:

WHAT SOLAR BATTERIES ARE VPP-COMPATIBLE?

Every battery we install is VPP-compatible. Solar battery storage that is VPP-compatible includes Tesla Powerwall, Sungrow, and GoodWe batteries, offering a range of storage capacities and brands for households and businesses.

As an installer of home energy storage, we highly recommend Amber as it helps unlock the most potential for households using SmartShift. Amber is compatible with Tesla Powerwall 3, Sungrow, and Fronius, with future integrations to include GoodWe.

It’s important to know that these are referring to DC-coupled battery systems (with the exception of Tesla Powerwall 3). For AC-coupled systems, Amber will need to be compatible with your solar inverter and consumption meter.

HOW DO VIRTUAL POWER PLANTS ACTUALLY WORK?

A Virtual Power Plant (VPP) is not like your traditional electricity power plant. Unlike a coal-fired power plant, a VPP is a network of interconnected solar and battery systems that all sit in normal households, working together to help stabilise the grid.

When demand across the grid spike - commonly during events like a hot summer afternoon and every air conditioner is pumping, the network is at high demand and needs additional power asap. Instead of spending lots more to increase power output at the power plant, the network uses the connected solar and battery systems to feed into the grid to help suppliment it in that short duration.

VPP participants won't really notice much on the consumer end of things, as the VPP network only draws a limited amount (depending on who you are with).

In exchange for the exported energy that is drawn from a VPP-connected battery, the household gains rewards or credit on their energy bill.