Short answer: no. Amber is not a virtual power plant, or VPP. Amber is an energy retailer that gives you direct access to wholesale electricity prices, with smart technology (SmartShift) that automates your home battery for you. It can look similar to a VPP from the outside, because in both cases your battery responds to the grid. But how the two models work, who's in control, and who keeps the money are very different.
It's a question a lot of Australians are asking right now. The ABC reported this week that fewer than a quarter of households installing a battery under the federal government's $7.2 billion subsidy scheme are signing up to a VPP, according to the ACCC. Experts quoted in the piece put much of that down to a deep distrust of energy companies acting as the middleman between households and the market.
Read another way, though, that figure tells a different story. Households aren't rejecting the idea of putting their batteries to work for the grid. They're rejecting the traditional VPP deal, where you hand over control and get a flat rate back. Amber's own numbers show that of the battery owners who do choose to share their energy, the large majority are doing it through Amber's wholesale model rather than a conventional VPP. So if you've been researching questions like "is Amber Electric a VPP", "should I join a virtual power plant", or "VPP vs wholesale energy plan", this one's for you.
What is a virtual power plant (VPP)?
A virtual power plant is a network of energy resources like household solar and batteries that are coordinated centrally, so together they can provide power to the grid when it's needed.
The trade-off sits in who the battery is working for. Join a VPP and you hand control of your battery to an energy company, which manages the sale of your stored energy back to the grid and typically pays you a flat rate for the privilege. The ABC's coverage put its finger on the two downsides: someone else controls the decisions about your battery, and someone else controls the profits from them. Notably, the same piece pointed to the rise of dynamic retailers giving households direct access to spot prices as the alternative some battery owners are choosing. Amber pioneered that model in Australia and has been running it since 2017, while the piece notes some newer players are still preparing to launch.
So what is Amber, if not a VPP?
Amber is an electricity retailer with a different business model. Instead of buying energy on the wholesale market, adding a markup and selling it to you, Amber passes wholesale prices straight through with no markup. That applies both when you buy energy and when your battery or solar sells energy back to the grid. Amber's only margin is a flat monthly subscription fee, so Amber doesn't earn more when your usage or your energy costs go up.
That distrust of middlemen the ACCC identified? Amber's model is built to remove the middleman's incentive entirely. There's no gap between what Amber pays and what you pay, so there's nothing to gain from controlling your battery in anyone's interest but yours.
Direct access to wholesale prices is what changes the game for battery owners. Wholesale prices swing throughout the day. They can crash to nothing when the grid is flooded with solar, and spike hard in the evening peak. A battery that can see and act on those swings is worth far more than one quietly looping through charge-by-day, discharge-by-night.
What does SmartShift do?
SmartShift is Amber's battery automation. It watches the wholesale market in real time and makes the calls for you. It charges your battery when energy is cheap or free, holds it, and sells any stored energy you're not using back to the grid when prices peak. During those peak moments, exports can earn up to $19/kWh, a long way from the roughly 4c per kilowatt hour feed-in rate common on traditional plans.
And you keep 100% of those earnings. There's no flat rate set by an operator, and no one clipping the ticket on the value your battery creates.
But don't VPP customers save more?
The ACCC found that VPP customers were, on average, better off than battery owners going it alone. Deputy commissioner Anna Brakey said battery owners using their battery for their own purposes pay around 20 to 50 per cent less than a regular customer depending on the state, while VPP participants save around 60 per cent.
That comparison measures a VPP against a battery doing nothing but self-consumption, the default mode most batteries ship in, charging from solar by day and running the house by night without ever seeing a price signal. Against that baseline, sharing your battery pays better than not sharing it. The comparison this blog is about is different: a VPP versus direct wholesale access. Both put your battery to work for the grid. Only one pays you the full market value of doing it.
Amber vs VPP: the key differences
Who controls the battery? In a VPP, the operator does, in the VPP's interest. With Amber, the battery still works for you. You can set and forget with SmartShift, or take the controls yourself if you'd rather. Monash Energy Institute's Professor Yolande Strengers made the point in the ABC piece that many households bought batteries precisely because they wanted greater independence and to take back control. A VPP asks you to give some of that up. Amber doesn't.
Who keeps the earnings? In a VPP, you're paid a flat rate while the operator captures the market value. With Amber, you earn the real wholesale price for your exports and keep 100% of it.
How does the provider make money? A traditional retailer earns on the gap between what it pays for energy and what it charges you, which means its interests and yours pull apart. Amber's margin is a flat monthly subscription that stays the same whether prices are high or low, so Amber wins when you win.
What about the grid? Coordinating Australia's home batteries genuinely matters. With more than 4 million solar homes and almost half a million home batteries, experts say charging them when solar is abundant and discharging when the system needs it makes the whole grid more efficient. A battery on wholesale prices does exactly that, responding to the same signals, without you handing over the keys.
What about the risk of wholesale prices?
The ABC piece includes a fair warning about dynamic retailers: spot prices swing both ways, so alongside the extraordinary highs there's the possibility of being caught out buying at the wrong time. For battery owners, though, that volatility is the point. A battery lets you buy when prices crash and sell when they spike, and SmartShift handles the timing automatically.
Amber vs VPP: the key differences
Who controls the battery? In a VPP, the operator does, in the VPP's interest. With Amber, the battery still works for you. You can set and forget with SmartShift, or take the controls yourself if you'd rather. Monash Energy Institute's Professor Yolande Strengers made the point in the ABC piece that many households bought batteries precisely because they wanted greater independence and to take back control. A VPP asks you to give some of that up. Amber doesn't.
Who keeps the earnings? In a VPP, you're paid a flat rate while the operator captures the market value. With Amber, you earn the real wholesale price for your exports and keep 100% of it.
How does the provider make money? A traditional retailer earns on the gap between what it pays for energy and what it charges you, which means its interests and yours pull apart. Amber's margin is a flat monthly subscription that stays the same whether prices are high or low, so Amber wins when you win.
What about the grid? Coordinating Australia's home batteries genuinely matters. With more than 4 million solar homes and almost half a million home batteries, experts say charging them when solar is abundant and discharging when the system needs it makes the whole grid more efficient. A battery on wholesale prices does exactly that, responding to the same signals, without you handing over the keys.
What about the risk of wholesale prices?
The ABC's coverage of dynamic retailers includes a fair warning: spot prices swing both ways, so alongside the extraordinary highs there's the possibility of being caught out buying at the wrong time. For battery owners, though, that volatility is the point. A battery lets you buy when prices crash and sell when they spike, and SmartShift handles the timing automatically. The swings that are a risk for a home with no storage are the earning opportunity for a home with it.
Common questions
Is Amber Electric a virtual power plant? No. Amber is an energy retailer that passes through wholesale prices with no markup and automates your battery with SmartShift.
How long has Amber been offering wholesale prices? Since 2017. Amber pioneered direct wholesale access for Australian households, years before dynamic pricing became the industry conversation it is today.
Why aren't Australians joining VPPs? The ACCC found fewer than a quarter of subsidised battery buyers sign up to one, with experts pointing to distrust of energy companies acting as the middleman. Amber's own numbers suggest households aren't against sharing their energy; of those who do, the large majority choose wholesale access through Amber, keeping control and the full market value of their exports.
Do I lose control of my battery with Amber? No. SmartShift can run things automatically, or you can take the controls yourself. Either way, the upside is yours.
How much can my battery earn with Amber? Exports earn the wholesale price, which during peak price events can be worth up to $19/kWh. You keep 100% of what you earn.
How does Amber make money if there's no markup? Through a flat monthly subscription. That's the whole margin, and it doesn't grow when your bill does.
Want to see what your battery could really do on wholesale prices? Get a quote with Amber and put it to work. For the finer detail on how it all fits together, head to help.amber.com.au
