Solar installations on rooftops are facing challenges, but virtual power plants present a potential solution for the future

In the rapidly evolving landscape of renewable energy, a new trend is emerging: Virtual Power Plants (VPPs). These digital power stations, composed of individual solar panels and batteries, are revolutionizing the energy sector across the United States.

The benefits of VPPs have been evident this summer, as demonstrated by Shannon Anderson, a policy director at Solar United Neighbors. Tesla Energy is another player in this field, providing live updates on how much its Powerwall batteries are contributing to the system at large.

However, the rooftop solar industry is currently facing a crisis. Utilities have been cutting incentives, and major residential solar installers and financiers have gone bankrupt. Yet, the industry can survive and potentially thrive by focusing on becoming VPPs.

This shift is not just a response to the industry's challenges. Solar panels and lithium-ion batteries remain the cheapest and most easily deployable technologies to serve the U.S. power grid. Companies like Sunrun, the country's largest residential solar installer, are embracing this change. Mary Powell, who led Green Mountain Power's push into VPPs, became Sunrun's CEO in 2021, signalling Sunrun's growing interest in becoming a solar-powered utility.

Green Mountain Power, based in Vermont, has been using solar-charged batteries as grid resources at a large scale. Similarly, Puerto Rico's grid operator LUMA Energy has relied on the Customer Battery Energy Sharing program to prevent grid collapses. In places like Puerto Rico and New England, these VPPs have demonstrated their worth in preventing blackouts and lowering costs for consumers.

The U.S. power grid has not expanded quickly enough, increasing the risk of outages and subjecting Americans to rising utility rates. Gas-fired power plants cannot be built fast enough to make up for the demand in the energy sector. In contrast, VPPs can be deployed quickly and efficiently, reducing stress on the grid during critical periods, such as last month's heatwave in New England, where distributed solar and batteries played a significant role.

Sweeping legislation passed by Republicans in Congress will soon cut off federal tax credits for the solar sector, potentially slowing the growth of VPPs. However, the resilience of these virtual power plants has already been tested and proven. With hundreds of thousands of battery-equipped, solar-clad homes already storing renewable energy and returning it to the grid during peak demand, the future of VPPs looks promising.

Acadia Center estimated that rooftop solar helped avoid about $20 million in costs by driving down energy consumption and suppressing power prices. Utilities such as National Grid and Eversource have also launched ConnectedSolutions programs, cutting demand by hundreds of megawatts during summer heatwaves.

The VPPs led by Mary Powell before her time at Green Mountain Power are based on distributed energy resources such as rooftop solar panels, battery storage, and demand response technologies. As these VPPs continue to grow and evolve, they promise to revolutionize the energy sector, making it more efficient, sustainable, and resilient.

In conclusion, the rise of Virtual Power Plants represents a significant shift in the renewable energy industry. By leveraging the power of individual homes and businesses, these digital power stations are proving to be a reliable and cost-effective solution to the challenges facing the U.S. power grid. As the industry continues to adapt and grow, the potential benefits of VPPs are boundless.

Solar installations on rooftops are facing challenges, but virtual power plants present a potential solution for the future