Mistrust preventing households from signing up as virtual power plants

Battery-powered households shun virtual power plants selling stored solar to grid Thu 6 Aug 2026 at 4:41am In short: Thousands of households with rooftop solar and a battery are not sharing its energy. Experts say it's because of a deep distrust consumers have with energy companies that act as the middle man between the energy market and households. Regulators are concerned that it could lead to a less efficient electricity grid and result in higher costs for households. Chris Richardson's Frankston home in Melbourne's south has what he likes to call its own power plant. Solar panels collect sunshine and a battery stores much of that power so it can be used later in the day. "I think, first off, I was driven by the idea that we have to save the planet by putting solar panels on," Mr Richardson said. "But the reality is most people are putting solar panels and batteries on to save money." It's a bet that's paid off, allowing him to almost eliminate his power bill and halve his gas costs. He's done it by joining a so-called virtual power plant, or VPP, a network of energy resources like household solar and batteries that can provide power to the grid when needed. Mr Richardson hands control of his battery to an energy company which then manages the sale of electricity from his battery back to the grid. "Initially when I saw that they were taking electricity out of my battery at night I was a bit 'oh, they can't do this. This is not fair'," he said. "But the reality was it made no difference. I was still running my house for free." Battery users not flocking to VPPs For all his enthusiasm Mr Richardson is something of an exception. Australia's competition watchdog has found most people getting a battery under the Commonwealth's $7.2 billion subsidy scheme are spurning VPPs. The Australian Competition and Consumer Commission (ACCC) noted fewer than a quarter of customers installing batteries were signing up to such schemes. This was despite the fact that customers on a VPP were, on average, better off than those who were going it alone, the ACCC found. Anna Brakey, the ACCC's deputy commissioner, said consumers with batteries might be wary of virtual power plants but it often paid off to "cede control". "Depending on which state you're in you're paying 20 to 50 per cent less [than a regular customer] if you have a battery that you're using for your own purposes," Ms Brakey said. "If you have a battery and participate in a virtual power plant product, those savings are higher at around 60 per cent." Solar, battery uptake a 'unique' strength Yolande Strengers from the Monash Energy Institute said the question of whether Australia can properly coordinate household solar and batteries was not a trivial one. More than 4 million homes have solar panels, while almost half a million now have a battery as well. "We have all of this storage capacity sitting in homes, which is a really unique situation for Australia, for the world, to have all this renewable capacity," Professor Strengers said. "If we can be treating that as a coordinated resource … discharging that power when the system really needs it, and if we can also be charging those batteries when we've got abundant solar in the system, we can improve the efficiency of the overall system." Professor Strengers said coordination could help avoid the need for billions of dollars in upgrades to the grid, as well as benefiting customers who could not get solar panels and batteries themselves. But widespread acceptance of VPPs is no sure thing, she argued, given the reasons households may have turned to batteries to begin with. "For many people it's also about wanting greater independence and resilience in the energy system and wanting to take back control," Professor Strenger said. Some selling their power directly Simon Hackett runs a company called Energy Autopilot, which he says will aim to cut out the middleman and give consumers direct access to the electricity market when it launches later this year. He argued VPPs are based on the outdated idea that batteries must be controlled by one or a few big players to help the grid. "There's two downsides of that," Mr Hackett said. "One is you don't have control over those decisions, someone else does, and you don't have control over the profits from that exercise, someone else does." Mr Hackett said the size and sophistication of batteries was growing as their costs fell. This meant customers had every incentive to sell their excess power back to the grid at times of high demand and high prices. He said households now had the ability to tap the wholesale market directly and the technology to handle their trading. "That combination turns you into a genuine power plant, that can buy and sell power just like the big boys used to,"he said. "That's an enormous change, and it's an ability to do stuff for ourselves that's just never existed." The rise of so-called dynamic retailers, which give households direct access to spot prices, is appealing to some, but experts have warned they are not without their risks. Price volatility in the spot market means extraordinary highs, but some customers could be caught out as prices swing low. "You might make a lot more money. You might actually wind up paying a lot more money," Mr Hackett said. "Of course, you can sign up with any other energy retailer that's out there that does it the good old-fashioned way. "What's going on there is they are accepting that risk instead of you." At home in Melbourne, Chris Richardson is comfortable with his decision to be part of a virtual power plant. He acknowledges that he did not have complete control over his battery but insists he's still coming out ahead. "I love it," Mr Richardson said, but he's given up trying to explain it to friends and colleagues. "[When] I tell people at work they give me this look like I'm wanting to join up with a Tupperware club or something like that."