Virtual Power Plant (VPP) pilot program

A virtual power plant (VPP) is a network of individual distributed energy resources, such as solar PV and batteries that are located in different places. Through aggregation in a VPP, these systems may then be able to participate in trading in the electricity market and providing network services and grid support.

A VPP is a better, cleaner way to share energy – and gives eligible Victorian households the power to create, distribute and manage power together. When enough households have batteries, they can form a network using smart technology - to bring a new, significant resource online that makes the most of each household solar system and battery. VPPs accelerate the role of renewable energy in our daily lives as Victorians work together to deliver benefits to the environment in their own communities.

The extra solar power is stored in the battery. When demand for electricity is high this extra power can be fed into the VPP network, taking the stress off at peak times to create a more reliable network. So, you and your community can benefit from fewer disruptions, more stable services and, ultimately, cheaper power.

You can save money, reduce your carbon footprint and be connected to a community that helps guarantee a stable energy supply for you and your household.

VPPs met several eligibility requirements to take part in this program. Requirements included that they operate in Victoria, had a commercially available program, provided consumer price certainty for a minimum of twelve months and be able to demonstrate benefits for participating households. They also agreed to Solar Victoria’s consumer protections, which include price certainty and consumer assistance, and installing systems on Solar Victoria’s approved product list.

The 12-month VPP pilot program was open to customer applications until 31 December 2022, before entering its research phase. Customers who joined an approved VPP program before 31 December 2022 received a higher battery rebate amount of $4,174.

The Solar Victoria VPP Pilot Program continues through to 31 December 2024 to evaluate and review the benefits and outcomes of the programs. This VPP Pilot Program has been designed to ensure customers will not be disadvantaged if they decide the program is not for them.

Batteries installed through this program are required to be on Solar Victoria’s approved battery list comprising energy storage solutions that are VPP capable. This means they have technical capabilities aligned with the Australian Energy Market Operators National Electricity Market VPP Demonstration Program Minimum Capability Specifications. These systems have been assessed for capabilities including performance, safety, internet accessibility, security, remote registration, monitoring and control, which enables batteries to provide network support services and participate in virtual power plants.

Each of the VPP providers in the pilot offered different contracts. Depending on the VPP provider a customer is with, they may get paid for the power stored in their battery or they may receive a discount on their electricity bills. Each program outlines compensation, as well as how often and how much energy will be shared across the year, so customers know how this worked at the time of joining the program. This information is an important part of choosing the right program.

This depends on the VPP. Some VPPs are geographically based while some operate Victoria wide.

Each VPP provider was required to have a clear dispute resolution process. Customers are recomended to first contact their VPP provider to resolve any issues. However if an issue cannot be resolved, Solar Victoria’s customer service team can advise customers and make recommendations on next steps.

You can read more about ways to educate yourself and other useful information on Solar Victoria’s Consumer Protection page.

As defined by the Australian Energy Market Operator (AEMO), battery systems that are ‘VPP ready’ meet a set of technology requirements that include:

• being able to respond to remote requests to charge/discharge the battery (e.g. requests to charge battery at peak solar photovoltaic [PV] export time);
• being able to communicate state of charge, voltage and measure power flow at battery terminals (e.g. communicate to the AEMO on battery charge level to assist forecasting); and
• being able to assist network security and reliability (e.g. advanced ride through settings to support system security in the event of unscheduled outages).

Customers retain their batteries which can then function regularly with solar panels as an energy storage system.

The five approved VPP programs have varying minimum contract lengths and exit fees, VPP customers should contact their provider for details of exit fees and contract lengths.

Not all batteries can operate in a power outage. If your system has the capability, the battery capacity required depends on a number of factors, including capabilities of your system, the size of the solar system, electricity usage (daily and seasonally), and the energy requirements of any appliances that run during a power outage. Learn more about using solar batteries for back-up power.

Read our Buyer’s guide for more information about how solar battery systems work, and how to plan a system.

We recommend that you also do your own independent research as you might change your energy usage over time, for example if you purchase an electric vehicle, so you will need to also take this into account.

FAQs: Solar batteries

VPP Pilot Program closed to new applications on 31 December, 2022. If you currently have a battery we encourage you to get in touch with a VPP provider to see if your battery is eligible for their program. However if you already have a battery and do choose to join a VPP program you may not receive the same benefits and protections that were offered under the VPP Pilot.