With over 1,000 battery installations every day since the federal rebate program went live, there is a huge opportunity to scale up VPP-connectivity - but only if we get things right, writes Solar Citizens National Campaigner Charlie Rodrick.
First published in The Fifth Estate as: Virtual reality check: VPPs hold the key to Australia’s clean energy future – but only if we get them right
Australia is at a turning point in its consumer energy trajectory - boasting over four million solar homes, thousands of batteries now being installed every week, and the exciting potential of vehicle-to-grid technology just beginning to be realised.
By aggregating the shared energy potential of these assets and leveraging AI smarts to control loads and outputs in response to the needs of the grid, Virtual Power Plants (VPPs) have enormous potential to completely reshape how we generate, use, and share electricity - now and into the future.
In fact the Australian Energy Market Operator models that by 2030, 60% of consumer storage capacity will be ‘coordinated’ - requiring a huge uptick in VPP uptake as well as rapid progress towards Australia’s target of one million batteries.
AEMO ISP 2024 Integrated System Plan: Report Charts Data - Comparison of required installed coordinated vs passive
consumer storage capacity under the lowest cost pathway to Net Zero by 2050 (Step Change scenario)
The Current Opportunity
To be eligible for a ~30% rebate under the Albanese Government’s landmark Cheaper Home Batteries Program, consumer storage assets are required to be ‘VPP-ready’ - although households are not required to join one.
On the 1st July, NSW Government ended their battery incentive but increased their VPP incentive, offering between $400 to $1,500 to households who sign up to a registered VPP provider.
The WA Residential Battery Scheme offers Western Australians a rebate and no-interest loan as part of that can be stacked with the federal rebate to unlock even greater savings - but only if they connect the battery to a VPP.
South Australia's Virtual Power Plant is the country’s largest VPP. All households - including Housing SA and community housing tenants - can sign up to join through either AGL or Energy Locals. Under this government program, select households can also benefit from a Tesla PowerWall being installed at their property at no cost.
With over 1,000 battery installations every day since the federal rebate program went live, there is a huge opportunity to scale up VPP-connectivity in NSW, WA and across the nation - but only if we get things right.
Coordinated consumer energy resources (CER) promise direct savings to consumers, reduced energy costs and faster emissions reduction. But without proper regulation there is no guarantee that the full cost saving benefit to households will be realised, and consumer trust is already proving to be fragile. The Smart Energy Council has echoed these concerns, saying that “VPPs risk becoming stranded policy ideas - technically brilliant, socially brittle.”
How can VPP’s be designed to be Consumer-Centric?
Amber Electric is one of the few providers with a truly consumer-centred approach. Their model allows households to retain full control over their batteries and access higher earnings by selling their excess power at wholesale market rates. Customers can opt in or out at any time with no lock-in contracts and are guaranteed full transparency over how their energy is being used throughout the network.
VPP provider Energy Locals is currently working with Deakin University to trial a Virtual Energy Network that enables consumers without solar or a battery to sign up [4]. This revolutionary new product could be a gamechanger for renters and apartment residents who are locked out of the benefits of CER.
These examples set a precedent for consumer-centric design, because they allow battery owners to:
- Understand exactly how and when their assets are controlled.
- Retain the right to override decisions made by the VPP provider.
- See a clear, fair return on their investment.
VPPs that do not meet this criteria raise serious concerns about consent, transparency, and consumer benefit.
What Needs to Happen?
Dr Gabrielle Kuiper, energy policy advisor and expert, has urged regulators to step up in response to concerns over the VPP market:
“The Australian Energy Regulator should already be providing clear, accessible information on VPP products - integrating them into the Energy Made Easy comparator tool. These products have been around for years, and the AER has a legislative duty to support consumer choice.”
“The Australian Energy Market Commission (AEMC) must also require consistent disclosure of VPP contract terms and the profit split. We need a transparent, minimum revenue share for household energy users - I suggest 50% as a starting point.”
Solar Citizens is calling for urgent action to establish these standards and protections. The Australian Energy Regulator (AER) has already recommended a package of reforms to modernise the National Energy Customer Framework [6] to better cover emerging services like VPPs. The federal government’s Consumer Energy Resources (CER) Roadmap includes steps to make these protections enforceable and consistent, which are yet to be rolled out.
These reforms can’t come soon enough. If governments don’t act quickly, we risk replicating the same centralised, profit-driven energy system that VPPs were supposed to disrupt. Instead of empowering consumers, they could entrench the market dominance of major retailers.
Done right, VPPs can help democratise our energy system. They can turn homes into active participants in the grid, bring down bills, and share the benefits of clean energy with renters, apartment dwellers, and social housing tenants. But to get there, we need transparency, fairness, and enforceable consumer rights - so VPPs actually work for the people powering them, not the profits of big energy retailers.
Further reading:
- Solar Citizens - Home Batteries Frequently Asked Questions
- RenewEconomy: Why Virtual Power Plants Are the Future of Electricity Retailing, July 2025
- IEEFA paper: What is the State of Virtual Power Plants in Australia? Gabrielle Kuiper, March 2022
- The Guardian Australia Australia’s surge in household battery installations is ‘off the charts’ as government subsidy program powers up | 24 July 2025
- ABC Landmark trial to enable energy trading between solar homes and those without 6June2025
First published in The Fifth Estate as: Virtual reality check: VPPs hold the key to Australia’s clean energy future – but only if we get them right