Australia has become a world leader in solar photovoltaics (PV). We now have almost 38 GW of total solar generation capacity – that’s more than 13 times the capacity of Australia’s largest coal plant, Eraring Power Station. 

Of the 38GW, the majority is installed on the rooftops of homes and businesses instead of large, grid‑scale solar projects. 

And it’s not just solar reshaping the grid. Battery installations have surged since the introduction of the Cheaper Home Batteries Program, with around 4.7 GW of storage capacity installed as of early 2026. 

With more households generating (and storing) their own energy, the electricity market is changing fast. Virtual Power Plants (VPPs) offered an early way to harness the collective power of home energy assets, but they’re not the right fit for everyone. There’s been a push for more VPP uptake in recent years, but not every household can add solar and battery storage. 

As the push for consumers to sign up to a VPP continues, we’re looking at the options for households to participate in the energy transition. Let’s start with what a VPP is, how they work, and what to weigh up before you join one. 

What is a Virtual Power Plant? 

You’ll find multiple definitions for a VPP. Generally, the term describes a decentralised network of solar and battery assets, coordinated by a central operator. 

Think: thousands of households, each with their own solar and battery, all participating in the energy market through a central operator – the VPP provider. 

Some VPPs can also include other energy resources like EVs, or controllable household loads such as hot water systems linked to smart controls. 

How does a typical Virtual Power Plant work? And what are the risks? 

In a VPP, the operator can remotely control the combined fleet of assets. That usually means they can: 

• Discharge stored energy to the grid when it’s needed (often during peak demand, when wholesale prices are high), and 

• Charge batteries when there’s surplus energy, helping keep the grid stable (for example, when rooftop solar is flooding the system). 

VPP operators can control your assets as is agreed when signing up to the VPP 

And sometimes, that control can come at your expense. In plain terms, a VPP could: 

• charge your battery when electricity is expensive for you (when it suits the VPP operator), or 

• discharge your battery to capture value and only some of that value is shared with you.
   

In some cases, it’s also possible a VPP discharges your battery during high-price periods, leaving it empty during a blackout, meaning you may not be able to use your battery as backup power when you need it most. 

Here’s the key point: if you already have a battery and your household is on a flexible tariff linked to wholesale pricing, you don’t necessarily need a VPP to benefit financially. If you can charge when prices are low and use/export when prices are high, a wholesale-linked retail contract can deliver strong returns – and you’re still helping the grid.
 

How do I join a Virtual Power Plant? 

Joining a VPP means giving some control of your solar and/or battery to a third party – often an energy retailer, sometimes an independent ‘aggregator’. 

If you’re keen, start by contacting your preferred VPP provider. They’ll check your eligibility and provide a contract outlining incentives and conditions. 

It’s worth comparing more than one provider before you sign – terms can vary a lot. 

Also worth knowing: a VPP isn’t the only way, or even the best way, to maximise returns from solar and batteries. Many households are now looking for options that keep control with the customer. 

Do I need to join a Virtual Power Plant for the Cheaper Home Batteries Program? 

Labor’s Cheaper Home Batteries Program announced in April 2025 that eligible battery systems must be ‘VPP ready’. 

It’s since been clarified that your battery needs to be capable of connecting to a VPP, but you don’t have to join one if you’d rather opt out. 

Keep in mind, to meet eligibility criteria, the battery unit itself requires VPP capability. 

Why join a Virtual Power Plant: the benefits 

There can be benefits, especially if you’re trying to recover the upfront cost of solar and battery installation sooner. 

Some VPPs offer an upfront battery discount if you join, which can make a battery more affordable for households who might otherwise miss out. 

But watch the trade‑offs. Some operators may win back the discount by locking you into higher electricity rates later. Always read the terms and compare. 

Depending on the provider, you may also earn rewards for exporting to the grid at certain times, but the value you actually receive depends heavily on how the VPP operator uses your asset. 

And importantly: many of these benefits are not exclusive to VPPs. Today, there are other ways to maximise returns without handing over control. 

What are the disadvantages of Virtual Power Plants? 

Even if a VPP offers incentives, you may be able to find a better overall deal on a tariff that rewards smart usage and well‑timed exports, while keeping you in full control. 

Other downsides to consider: 

• Some customers have reported batteries being drained during peak periods, then having to buy back energy from the grid at higher prices. Retailers have denied these claims, but it’s not always transparent how much energy must be reserved for your own use. 

• The fine print varies widely, and your actual returns can look very different from one operator to another. 

• Frequent or poorly managed charging/discharging can also reduce battery life. If a VPP pushes the battery to very low levels or increases cycling beyond recommended limits, it could increase battery degradation.
   

If your goal is to take back control of your electricity bills, a VPP may not always be the right fit. For energy‑savvy households, it’s worth exploring other options too. 

Does Flow Power operate a Virtual Power Plant? 

In some ways, ‘VPP’ is just new terminology for a tried and tested energy strategy: responding to real-time price signals and using or exporting energy as the market needs. It’s a strategy we’ve helped customers use for decades. 

That’s why Flow Power doesn’t operate a Virtual Power Plant. Instead, we put you in control. We reward smarter usage linked wholesale electricity market prices, plus boosted feed-in tariffs that encourage you to export to the grid when it is needed most. 

And it’s not just households that can benefit. Like Flow Home, we help businesses dial down or shift large operations into lower demand periods. Our commercial and industrial customers represent a big slice of the market, with capacity equivalent to a medium-sized gas peaking plant! 

When loads that large shift at the right time, it has a similar stabilising effect on the grid to a VPP but doesn’t take control away from the customer. And importantly, it can offer even more potential to save. 

So, whether you’re a household or a business, a Flow Power contract can help you support the grid, use more renewable energy when it is abundant, and keep full control of your own battery. 

Is it worth joining a Virtual Power Plant? 

Joining a Virtual Power Plant could be worthwhile, but don’t forget to check the fine print, and compare offers to alternatives like being with a retailer that passes on the benefit of wholesale pricing. 

If you want the opportunity to save, while keeping the power in your hands? It’s time to make the switch to a smarter electricity contract. 

Sign up to Flow Home today.