You’ve seen the ads - "Get $ off the price of your battery", "Enjoy this $ credit on your first bill". All you have to do is connect your battery to their Virtual Power Plant (VPP) - a little side hustle where retailers pool thousands of home batteries together and control when they charge and discharge for additional financial gain.
It feels like a win. For the first year, maybe it is. Then the fine print in your VPP starts earning its keep, and you realise the deal was never really built around you.
Here's how the play works, so you can spot it before you sign.
The three-step playbook
Almost every retailer has a VPP deal that uses the same three steps.
- The hook: An upfront discount on the battery, or a sign-up credit on your bill. Real money, paid early, right when you're feeling good about the whole thing. They know humans are hard-wired to take a reward given now, rather than take a better one given later.
- The lock-in: To get the best version of the offer, you agree to stay put for years. Move house or switch retailers before the term is up and an early termination fee can come knocking.
- The cap: Your earnings get limited to a set amount each year, no matter what the energy market actually does. And that's the step that does the quiet damage.
Think about when your battery is most valuable to the grid. It's during a price spike, when a few generators have gone offline, demand is high, and wholesale prices go through the roof. That's the moment your stored energy is worth big bucks. That's also the exact moment a capped deal stops working for you. You get your fixed figure. The retailer sells your energy at the spike price and keeps the difference.
The cap on what you earn has nothing to do with how the grid actually values your powerThat gap is the whole business model and why VPP plans have such a bad reputation.
Dodgy plan #1: small money for you, big money for them
Some of the most common VPP deals out there work like this. The retailer discounts or installs the battery for you, and in return you sign up for a multi-year term. Leave before it's up, because you move house or just want out, and you can be charged an early termination fee.
In return for that discount, you might get a flat credit off your bill. Say $20 a month, every month, no matter what your battery does. When a heatwave drives an evening price spike and your stored energy is suddenly worth a small fortune to the grid, you still get $20. And more than likely, your retailer banks the rest.
On top of that, these deals often cap how much energy the retailer will ever draw from your battery in a year. That's the ceiling on how hard your battery is allowed to work for you under the deal, set in advance, whatever the market is doing.
Now hold that ceiling against what your battery can actually do over a year when nobody's capping it.
Take a typical NSW home with a 13kWh battery and 6kW of solar. A battery trading on the wholesale market with the goal of maximising earnings could unlock around $1,000 of value over a year for a setup like that. Not from one freak event, but from a battery quietly working the market day after day, charging when power's cheap and exporting when prices spike.
A capped deal doesn't let your battery do that. It draws its set amount, pays you the fixed credit, and keeps whatever your energy was really worth on the day.
So the discount isn't a gift. It's a multi-year lease on your battery, with a hard limit on what that battery is allowed to earn while it's leased. You've sold the upside before you've had a chance to see it. And every price spike that lands during those years is one you watch someone else cash in.
Dodgy plan #2: drained at the worst possible time
The cap is one way these deals bite. Here's the other.
One customer's story made headlines last year, a year into his VPP deal. His battery started getting drained during peak times, right as wholesale prices were spiking. The retailer captured the value of that exported energy. He was left buying power back from the grid at the most expensive time of the day.
Then came the second hit. He says he was moved onto a demand tariff. If you haven't met one, here's how it works. A demand tariff looks at your single highest half-hour of grid use across the whole month, and uses that one spike to set a charge applied across your bill. Use a lot of grid power in one bad half-hour and you don't just pay for that half-hour. You pay for it all month.
Now stack the two together. His battery was emptied at peak time, so he was forced to import expensive grid power at peak time, which set his demand charge for the entire month. A battery he bought to bring his bills down was quietly working for someone else, and the way he was billed turned that against him twice over.
When someone else controls your battery and profits from your energy, their interests and yours aren't the same. They never were.
How Amber is different
Most VPPs lump thousands of batteries together, take control of them, and keep the value for themselves. Amber works the other way round. We don't take the wheel and we don't take a cut. We just pass through the real value of the energy market to your household, and SmartShift does the clever bit, buying and selling your energy at the best times so your bill ends up as low as possible.
The energy industry calls Amber a VPP. We think that misses the point entirely. We're the VPP alternative, a retailer that hands battery owners the full financial upside of the grid instead of keeping it.
Here are a few of the ways we’re different:
No lock-in contracts, no exit fees. Move house or decide Amber's not for you? You can leave anytime, no strings attached..
No small fixed payment that never budges. Your battery earns the real price your energy is worth on the day. When prices go through the roof, that's what you get. Not some figure a retailer picked in advance to suit themselves.
And Amber doesn't skim your earnings. You keep every dollar your battery makes. The only thing Amber charges is a flat monthly subscription, the same whether your battery earns you $50 or $500. So there's no incentive for us to drain your battery at the wrong time or quietly help ourselves to your best days. What you earn is yours to keep.
Want to see exactly how Amber stacks up against a traditional VPP? We've broken it all down here.
So when a VPP deal lands in front of you, there's really just one question worth asking. When wholesale prices spike, who keeps the money?
If the answer isn't you, watch out for the bait and switch. That upfront discount might have had a sweet taste, but a deal that pays cents on the dollar is the sour aftertaste.
Thinking about a battery, or already got one sitting on a deal you're not sure about? Check if your system works with SmartShift and see what your battery could really earn.
