What Is a Virtual Power Plant (VPP) and Is It Worth Joining?
A virtual power plant lets a provider use your home battery in return for credits. How VPPs work, what they pay and what to check before joining.
A virtual power plant (VPP) is a network of home batteries that an electricity retailer or provider controls remotely with software, so that together they act like one power station. If you join, you let the provider charge or discharge your battery at certain times. In return you get credits or payments. Joining is optional, even if your battery received a federal rebate.
How does a virtual power plant work?
The Clean Energy Regulator describes a VPP as small energy resources, such as home batteries, linked and controlled by software so they act as a single power plant. Thousands of batteries working together can help the grid in ways one battery cannot:
- Responding to price spikes. When wholesale electricity prices jump, often on hot evenings, the provider discharges batteries to the grid.
- Keeping the grid stable. Batteries respond in seconds to sudden changes in supply or demand, a service called frequency control.
- Supporting the local network at busy times.
Each time the provider takes control of your battery is called an event. Events are usually short and infrequent, and most providers cap how much energy they use from your battery each year.
How do you get paid?
Payment structures vary, but most VPPs use some mix of:
- A sign-up credit when you join
- Ongoing credits for staying connected
- Event payments for the energy your battery sends to the grid during events
- Wholesale pricing. Some providers pass on the actual wholesale price for exports instead of fixed credits.
As examples, offers in South East Queensland in November 2026 included:
- AGL: a $200 welcome credit, $80 a year, and $1 per kWh used in events, capped at 250 kWh a year
- Origin Loop: a $200 sign-up credit and $1 per kWh exported during events, capped at 200 kWh a year
- Amber: pays wholesale rates for exports, with no lock-in contract
Offers change often, so check the provider's current terms before signing up. Most VPP payments are bill credits rather than cash, and you usually have to buy your electricity from that provider.
Is a virtual power plant worth joining?
It depends on your battery, your plan and how you use your battery. The ACCC's 2026 review of the home battery market found that households in a VPP typically had lower bills than solar and battery households that were not. It also warned that VPP customers bear most of the risk if the benefits do not materialise.
Things to weigh up:
Your battery's warranty
This is the most important check. Battery warranties usually end at 10 years or after a set amount of energy has passed through the battery, whichever comes first. VPP events add to that total.
- Tesla Powerwall: the Australian warranty gives unlimited cycles only for solar self-consumption, time-based control and backup. Other uses are limited to 37.8 MWh of throughput.
- Sigenergy: the warranty is 10 years or a throughput limit, whichever comes first. Every kilowatt-hour cycled counts, including VPP events.
Providers tell you to check your own warranty, and some agreements make that your responsibility. Our guide to how long solar batteries last explains how warranty limits work.
Control and backup
You hand some control of your battery to the provider. Reputable providers leave a reserve. AGL commits to keeping at least 20% in most batteries, and Origin says it will not use your battery during a blackout. Even so, a battery drained during an evening event has less left for your own use.
Your feed-in tariff
If you are still on Queensland's 44c Solar Bonus Scheme feed-in tariff, adding a battery that can export to the grid can make you lose it. The rules depend on how the battery is connected, so check before you add a battery or join a VPP. The scheme ends on 1 July 2028.
Compatibility and contracts
Not every battery works with every VPP. The ACCC found some popular batteries were compatible with only a handful of VPPs. Also check:
- whether you must switch retailer
- the contract length and any exit fee
- whether an upfront battery discount ties you in for several years
Who it suits
A VPP generally suits households with a compatible battery, a good feed-in arrangement to protect, and no need for every kilowatt-hour of backup. If backup during storms is your main reason for owning a battery, read the reserve and blackout terms closely.
Frequently asked questions
No. Under the Cheaper Home Batteries Program, an on-grid battery must be capable of joining a VPP when it is installed, but the Clean Energy Regulator states you do not have to take part. Our battery rebate page covers the program.
Not currently. New South Wales and South Australia have state incentives linked to VPPs, which partly explains their higher participation. Queensland has no equivalent.
- Check which VPPs your battery is compatible with. Your installer or the battery maker can tell you.
- Read your battery warranty for throughput limits and conditions on other uses.
- Compare offers: credits, event caps, reserve levels, contract terms and whether you must switch retailer.
- If you are on the 44c feed-in tariff, check whether joining affects it.
- Sign up with the provider. They connect to your battery over the internet, so it must stay online.
If you are still deciding whether a battery suits your home, our guide to solar batteries in Queensland is a good place to start, and home battery storage covers the batteries we install.