As more households invest in solar, batteries, and smart energy technology, one term keeps popping up: Virtual Power Plant (VPP).
And for good reason. VPPs represent an important piece of Australia’s energy future, allowing thousands of individual homes and devices to help stabilise the grid, support renewables, and create new income streams for households.
And with government rebates (like the NSW battery incentive) now requiring many new batteries to be VPP-capable, more households are entering the VPP conversation for the first time.
But as more VPP offerings enter the market, it’s becoming clear that not all VPPs operate the same way. In fact, there are some significant differences in how these programs are structured and what they actually mean for the households who join them.
Amber’s approach is often compared to a VPP. In fact, Amber qualifies as a VPP for the purposes of rebate schemes like the NSW battery rebate. While Amber for Batteries has some overlaps with traditional VPPs, such as how we allow household batteries to contribute to grid stability and the energy transition, the way we operate is quite different. Our model gives customers full control, full visibility, and full access to the financial value their battery generates - without the trade-offs that often come with traditional VPP programs.
Let’s unpack what those differences are - and why they matter for your household finances.
What actually is a VPP? And why are they important?
At its core, a virtual power plant is exactly what the name suggests: a network of individual energy systems - home batteries, solar panels, electric vehicles, smart appliances - that can be coordinated to operate like a single, flexible power plant. Instead of relying on big centralised generators, we’re able to harness lots of small systems to help balance supply and demand on the grid.
In simple terms: it’s a smarter, more flexible way to run the energy system - one that helps integrate more renewables, smooth out supply and demand, and reduce pressure on the grid.
For example:
- If the grid is under strain on a hot summer afternoon, a VPP can discharge thousands of home batteries across the country to help meet that extra demand.
- If excess renewable energy is flooding the system during the middle of the day, a VPP can soak up some of that solar by charging participating batteries.
As Australia pushes towards 100% renewables, VPPs are likely to play a growing role. In fact, AEMO estimates that distributed energy resources - including VPPs - could provide up to 13% of total electricity capacity in the coming decades.
But while VPPs are increasingly important at a grid level, how they operate for individual households - and how much financial value they deliver - depends entirely on the model behind them.
How most traditional VPPs work
While the basic principle is similar, the way most VPPs operate today tends to follow a fairly standard model:
- The VPP operator controls your battery. Once you join a VPP, the operator typically has full control over when your battery charges and discharges, based on their commercial contracts with the market or the grid operator.
- You are paid a fixed or negotiated share of the revenue. The VPP sells your battery’s services into the market (for example, providing energy during peak demand), and you receive a payment based on how much your battery participated.
- Feed-in tariffs and usage prices stay the same. Your day-to-day usage and export pricing often still sits under a traditional energy plan with fixed tariffs - usually a flat feed-in tariff for your solar exports and a standard retail usage rate for your consumption.
For some households, this model works fine - particularly if you’re not looking for much involvement or flexibility, and are happy with the often fixed revenue share the operator offers.
But for others, especially those who want greater visibility, control, or the ability to maximise financial value, this model has some limitations.
How Amber’s approach is different
At Amber, we’ve built something that looks quite different from most traditional VPPs. While we help customers participate in many of the same markets that VPPs do, our model is built around direct wholesale access, automation, and putting more control and value in the hands of the customer.
We designed the system this way for a reason: because we realised that without having customer trust and buy-in, there’s no way most battery owners are going to want to get involved in supporting the energy system. It’s their asset (that they’ve paid good money for) and they didn’t do it just so an energy company could use it to boost their bottom line.
Here’s how that plays out at Amber:
Direct access to wholesale prices - no middleman skimming your revenue
With Amber, your household gets direct access to wholesale energy prices - both for your usage and your exports. That means:
- You’re not limited to a flat solar feed-in tariff. Your exports are sold at real-time market prices, which means you can take advantage of price spikes when demand surges.
- You’re not locked into fixed rates for your usage. You pay real-time wholesale prices, which often drop to very low or even negative levels during the day when there’s excess renewable energy on the grid.
This creates far more opportunity for your battery to earn income and for your household to save on bills. We also don’t sit in the middle taking a cut of your revenue!
Automation that works for you, while you stay in control
In most VPPs, once you sign up, your battery is essentially handed over to the operator to control.
At Amber, you stay in charge. You set your preferences and risk tolerance (for example, how much battery reserve you want to keep for blackout protection). Our automation software then works in the background to automatically optimise your battery based on real-time pricing - charging when it’s cheapest, discharging when prices are high.
The key difference:
- We’re not controlling your battery to maximise revenue for Amber.
- We’re optimising your battery to maximise value for you.
- We are the only battery automation provider that gives you manual control features. This gives you the ability to charge, discharge or preserve your battery - all at the press of a button.
Transparency - see what your battery’s doing (and earning)
Traditional VPPs often have complicated commercial structures: you might get paid a share of the VPP revenue, but it can be hard to know how much the operator is making behind the scenes, or whether you’re getting the full value of what your battery is providing to the grid.
At Amber, there’s no ambiguity: you see the same live wholesale prices we do. There are no hidden revenue splits, performance bonuses, or opaque calculations. Your battery earns market prices directly, and you see every cent. Our app also shows you what your battery is planning to do, based on price forecasts - so you can decide if you're happy with that, or override it to preserve power if you know something the algorithm doesn’t.
"The problem with the VPP model is that it helps the utility make money out of your battery. We don’t think that’s fair. We think customers should get the full financial value out of their own battery."
- Dan Adams, Amber co-CEO, speaking on Renew Economy’s SwitchedOn podcast
Smarter use of price volatility - not just grid events
Many VPPs primarily make money by discharging batteries during scheduled grid events or by bidding into certain market programs that operate occasionally.
Amber’s model taps into real-time wholesale price volatility on a much more frequent basis. That means:
- Your battery can charge when prices dip low or even go negative.
- Your battery can export when prices spike
- You capture value not just during major demand events, but across the normal daily price fluctuations that occur year-round.
This more frequent optimisation can add up to meaningful additional income.
Batteries aren’t just a backup anymore. They’re an active financial asset
For a long time, many people saw batteries primarily as a backup in case of blackouts, or simply a way to store solar to use after dark.
That’s still true - but what we’re seeing now is that, when combined with Amber’s model, a battery can become an active source of income and bill savings.
- 3 out of 4 Amber battery customers had at least one negative bill last year (meaning they earned more from exports than they paid for energy).
- On average, Amber battery customers earn over $1,000 per year in additional value compared to customers on fixed tariffs with traditional retailers.
Put simply: batteries are no longer just a defensive tool. They're increasingly an active financial opportunity.
How Amber puts households first
VPPs are a step forward in modernising how we manage energy, but not all VPPs serve households equally.
Amber’s approach gives customers far more visibility, flexibility, and upside:
- You see the full value of your battery’s participation.
- You stay in control of your system.
- You benefit directly from real-time market prices.
- Your battery works harder for you, not for a third-party operator.
As Australia’s energy system continues to evolve, we believe this kind of customer-led, transparent approach is key to unlocking the full potential of home batteries - for both households and the grid.
Want to find out if Amber for Batteries could be a good fit for your home?
Get in touch to chat with our team and see how we can help you get the most from your solar and battery setup.
