What are Virtual Power Plants (VPPs) in Australia?⚡[2025]
Posted 26 Nov
Posted 26 Nov
Throughout Australia, we are seeing an energy revolution in the way households and businesses produce, store, and consume electricity using sustainable energy.
We're developing into a world where individual homes and businesses are happily producing their own power, but not-so happily overloading the grid when the sun is shining. This results in instability and chaos in the grid with an over-abundance of solar energy during the daytime, but none at nighttime when the sun is down.
Virtual Power Plants can help in our grid stability, here's why.
A Virtual Power Plant (VPP) is a decentralised network of homes and businesses which individually contribute to generating and storing energy. Distributed Energy Resources (DER) like solar and battery systems are used to help supplement the grid and balance demand with production.
Virtual Power Plants were designed to enable 24/7 access to sustainable energy during grid outages or sun unavailability.
Properties with solar and battery are considered a Microgrid, which can participate in a Virtual Power Plant program for incentives and rewards.
| NSW VPP Networks | AGL | Energy Australia Battery Ease | Amber Smartshift | Origin Loop VPP | ENGIE VPP Advantage |
|---|---|---|---|---|---|
| Approved Batteries |
• Tesla Powerwall 2 & 3 • LG RESU 16H & 10H • Sungrow SBR 096,128,160,192,224,256 • SolarEdge Energy Bank & Home Battery |
Approved battery and inverter systems include: Alpha ESS, Ambrion, Eveready, GivEnergy, Goodwe, Growatt, Hive, LG Energy Solution, Redback, Sigenergy, Solaredge, Sungrow, Sunpower and Tesla. |
• Tesla Powerwall 2 & 3 • LG Chem • AlphaESS • Hive • REA Power • BYD HVM & HVS • Sungrow batteries (with compatible inverters*) • Redback • Sigenergy • Neovolt |
• Sungrow SBH and SBR • GoodWe Lynx • LG RESU • Solax T-BAT • AlphaESS SMILE & Storion • Tesla Powerwall |
• Tesla Powerwall 2 • Tesla Powerwall 3 • Empower Elektrobank • Sungrow SBR and SBH • AlphaESS SMILE • Sigenergy SigenStor |
| Eligibility Requirements |
Supply address must be able to export more than 5kW. Smart meter and reliable internet (excluding 3G/4G). |
Must be an Energy Australia customer. Smart meter and reliable internet (excluding 3G/4G). |
Amber subscription ($22/month). Smart meter and reliable internet (excluding 3G/4G). |
Battery Maximiser: 5–20kW solar system, 9.5kWh+ battery, 5kW inverter. BYO Offer: >5kW solar, >5kWh battery. Monthly Credit/Upfront Discount: Must be installed by Origin. |
5–10kW inverter solar system. Smart meter and reliable internet (excluding 3G/4G). |
| VPP Program Offers |
$100 sign-up or $0.4932/day credit. $1000 rebate to system or prepaid card. |
$15/month bill credit (up to $180/year). | Access wholesale market – earn up to $19/kWh. | $200 sign-up bonus + $1/kWh export during Loop events. | $200 sign-up credit + ~$20 monthly credits. |
| Feed-in and Consumption Tariff | Standard AGL plan (no specific VPP FiT). | 12c/kWh for first 15kWh exported. | Up to $19/kWh exports. | Standard Origin plan FiTs. | 12c/kWh for first 8kWh/day, then 5.5c/kWh (as of 1 July 2024). |
| Duration |
BYO program: 12 months. PDRS batteries: 36-month contract. |
No term specified. | No lock-in contracts. |
PDRS rebates: 3-year contract. Maximiser & BYO: No lock-in. Monthly Credit & Origin Install: 5 years. |
No lock-in contracts. |
| Minimum Capacity Reserve | Leaves 20% battery capacity. | Will not exceed 200kWh/year. | No more than 2 cycles/24hrs. User defines reserve. | 20% reserve capacity. Max 200kWh/year exports. | 20% reserve (Tesla) or inverter-defined. Max 405kWh/year exports. |
| Cancellation |
$0–$800 exit fee if rebate taken. No fee for BYO offer. |
No exit fees. | No exit fees. | Early exit may incur fee equal to rebate value remaining. | No exit fees. |
| Additional Info | Program not accepting new customers. | *Compatible inverter list available. | |||
| NSW Rebate Options | Peak Demand Reduction Scheme | Peak Demand Reduction Scheme | Peak Demand Reduction Scheme | Peak Demand Reduction Scheme | Peak Demand Reduction Scheme |
By joining a Virtual Power Plant network, you would be contributing to a larger effort to stabilise the grid and rely on a more
sustainable means of energy.
Buying a battery can be a large investment, so in order to accelerate returns, joining a virtual power plant, as well as VPP-related rebates can help pay your investment off.
By joining a virtual power plant, you gain access to rewards from the network provider by exporting your energy to the grid. These are usually in the form of credit towards your next electricity bill.
When you're a part of the virtual power plant network, you're contributing to helping the community's electricity requirements by helping balance grid demand and supply.
Explore the Peak Demand Reduction Scheme which is an Australian battery subsidy for NSW residents. See if you're eligible to save on your first battery today with the PDRS scheme and start maximising your energy independence.
With Amber for Batteries, you can charge, discharge, and fully automate your home battery at the touch of a button. Plus, with our wholesale model, you’ll even earn the same rate for your exports as the big coal and gas generators — helping support Australia’s transition to renewables.
Whilst solar is a great option to offset daytime consumption, the collective exports from rooftop solar drives the electricity grid to instability during the middle of the day during off-peak hours, which becomes unavailable when we most need it during peak hours. More about On vs. Off Peak hours here.
What Australia requires is this great amount of daytime energy to be stored and then supplied at night during peak hours like dinner time.
So in short, you'll probably need a battery in addition to your solar if you want to join a Virtual Power Plant network.
Virtual Power Plants are boosting adoption of solar and battery systems in Australia. With the rapid uptake of solar and battery storage across Australia, this network of self-sufficiency is becoming a bigger reality.
As more homes and businesses become their own microgrids, they can participate in virtual power plants, they help stabilise the grid.
With the PDRS battery subsidy, NSW solar owners can not only get a discount off their first battery, but can also claim a rebate of joining a VPP network.
A combination of getting rewarded for investing in a solar and battery system, as well benefiting from the energy it exports, VPPs are encouraging the adoption of solar and battery storage in Australia.
Battery storage degradation depends on the Virtual Power Plant network, and its charge and discharge requirements.
VPP operators like Energy Australia and Origin specify that they don't take any more than 200kWh within any 12-month period.
If your chosen network has higher usage, this can degrade your battery faster than usual with higher rates of charging and discharging cycles.
The idea of Virtual Power Plant participation usually involves short bursts of energy exports into the grid at moments of instability. The frequency of this will vary network to network.
It is recommended that customers research VPP program terms and conditions to ensure they know how much their battery will be used to export to the grid. Feel free to refer to the table above.
Whilst joining a Virtual Power Plant has its upsides, there are some caveats, depending on what VPP network you choose.
Ensure you conduct your research into the requirements and terms and conditions that the VPP network offers as elements like FiTs and control parameters.
Depending on what VPP you join, they will reserve a certain amount of energy for your consumption. This amount may vary based on specified requirements.
Because you're joining a network, the algorithm will reduce your control over battery levels. This could be an issue if you wanted to prepare for a possible grid outage.
With more participants joining a Virtual Power Plant network, each individual has to contribute less in order to sustain grid stability.
As Australia transitions to a renewable future, Virtual Power Plants are already enabling Australians in investing in solar and battery systems, with services like Amber offering direct rewards to customers.
By collectively powering the grid during imbalances, it benefits not only the participants, but also households and businesses without solar and battery as you're contributing to a reduced load.
Depending on elements like your system setup, energy goals, budget, and application requirements, joining a Virtual Power Plant can be a great choice.
We highly recommend carefully reading terms and conditions to understand what you're signing.
As more solar and battery systems are being adopted throughout Australia, virtual power plants will continue to offer incentivised solutions for properties all over NSW.
Here are some frequently asked questions for Virtual Power Plant (VPP) networks in Australia.
Explore Australia's Federal Government solar battery rebate subsidy like eligibility, approved batteries, requirements, and more about the upcoming incentive.
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