You’ve probably heard the term “VPP” thrown around - especially if you’ve got solar and a battery, or you’re thinking about getting one. But what actually is a virtual power plant? And what does it mean for your home, your bills, and the future of our energy system?
Let’s break it down - what a VPP is, how it works, and why it could change the way we use energy at home.
So, what is a virtual power plant?
A virtual power plant (VPP) is a network of solar batteries and other distributed energy resources (like electric vehicles) that are linked together and controlled via smart software. When combined, these systems behave like a traditional power plant - supplying energy back to the grid when it’s needed most.
But instead of a giant coal station on the outskirts of town, a VPP is made up of thousands of homes, each sharing a little bit of stored energy at just the right time.
In other words: your solar battery becomes part of something much bigger, and you get rewarded for it.
Why do we need VPPs?
Australia leads the world in rooftop solar, with more than 3.6 million homes soaking up the sun. That’s great news for the planet - but it’s also creating new challenges for the grid.
Most solar energy is generated in the middle of the day, when demand is low. That means the grid can get flooded with excess energy it doesn’t need - pushing prices down, causing instability, and sometimes even triggering emergency shutoffs.
Then, just a few hours later, demand spikes as people get home, turn on appliances, and solar generation drops off. That’s when we need energy the most, and when prices usually surge.
Enter: VPPs. They help balance the grid by:
- Soaking up excess solar during the day
- Discharging energy when demand and prices rise
- Reducing reliance on fossil fuel peaker plants
- Making the most of renewables, instead of wasting them
How does a VPP work?
In simple terms, a VPP connects your home battery (and sometimes your EV) to a wider network of energy users and the grid. When demand on the grid spikes, or when prices surge, the VPP can coordinate participating batteries to export energy back to the grid at the right moment.
But the way this actually plays out depends on who’s running the show, and not all VPPs are created equal.
Here’s how most VPPs tend to work:
- You opt in through your energy provider, network operator, or battery installer
- Your battery is connected to a central control system via software
- When grid support is needed, your battery is remotely instructed to export
- You receive a credit or fixed incentive (sometimes on top of your feed-in tariff)
Sounds good, right? It can be. But it also depends on how much control you have, how you're paid, and how transparent the VPP is about when and why your battery is being used.
Some questions to ask:
- Will I know when my battery is going to export energy?
- Am I being paid a flat rate, or market-linked prices?
- Can I opt out or pause participation?
- Will the VPP override my backup reserve settings?
- Am I locked in to the program for a set number of years?
Some VPPs operate with long-term contracts, fixed-price payments, or export schedules that may not prioritise your household needs. Others are more flexible but less rewarding financially. And not all of them give you visibility into what's happening behind the scenes.
The core idea is powerful - pooling together distributed energy to support the grid. But how that’s executed can vary wildly. So before you sign up, it’s worth digging into the fine print and making sure the VPP aligns with your goals: whether that’s savings, grid impact, backup protection, or all of the above.
How Amber’s VPP is different
At Amber, we do things a little differently.
We don’t run a VPP in the traditional sense, where your battery is just a cog in someone else’s machine. Instead, we give you the tools and automation that allow your home battery to participate in the energy market directly, while you still stay in control and earn the appropriate energy savings in return.
Through Amber for Batteries (using our SmartShift technology), your battery:
- Charges when prices are low or negative
- Discharges when prices spike and the grid needs support
- Earns you the highest possible value for your exports, thanks to wholesale feed-in rates that can reach $19/kWh (or $21/kWh in SA)
- Always prioritises your home’s energy needs first
No lock-in contracts. No one-size-fits-all control. Just smart automation based on live wholesale prices - so your battery can do the hard work for you and earn its keep.
Think of it as your own personal power plant, with the smarts to play like a big one.
Despite the key differences, Amber for Batteries qualifies as a VPP under current government battery rebate schemes - helping eligible customers meet VPP requirements and unlock additional savings.
If you’re an Amber customer, we can help make the rebate process simple. Once your battery is connected to Amber, we’ll send you the information you need to submit your rebate claim via Mac Trade Services.
What are the benefits of joining a VPP?
Whether you go with a traditional VPP or a more dynamic approach like Amber’s, the benefits are clear:
- Better financial returns from your battery or EV
- Lower energy bills, especially during price spikes
- Support for the grid, helping reduce blackouts and emissions
- Greater value from your solar, especially if you’re getting lower feed-in tariffs
Plus, you’re playing an active role in the transition to a more renewable, decentralised energy system, and that’s something to feel good about.
Is a VPP right for you?
If you have solar and a battery, or you’re planning to install one, a VPP or battery automation setup could help you unlock more value. It’s especially worth considering if:
- You want to offset rising electricity costs
- You’re seeing lower solar feed-in rates
- You like the idea of being part of something bigger
- You want to maximise your battery’s return without lifting a finger
Just make sure you know what you’re signing up for. Check whether the VPP:
- Offers transparent pricing and control
- Respects your battery’s backup reserve
- Lets you opt out or pause when needed
Or, if you’re with Amber, you already have access to a smarter, more flexible version - built to help you earn more, automatically.
Power is shifting - literally
VPPs are changing the way we use and share energy in Australia. And while the name might sound futuristic, they’re already here, and growing fast.
Whether you’re joining a traditional VPP or using Amber’s real-time automation, the future of energy is in your hands. Literally.
Because the next wave of energy isn’t just coming from the grid. It’s being powered and shared by homes with solar, batteries and EVs.
Ready to get more from your battery?
Amber for Batteries helps you automate, earn more, and meet VPP requirements for eligible rebates.
Get in touch today to find out if your setup is eligible.
