VPP

How it works (simple version)

1. Assets connect via software (cloud-based control platform)

2. The platform monitors energy supply, demand, and grid conditions

3. When needed, it can:

   • Discharge batteries

   • Reduce or shift electricity use

   • Export power to the grid

4. To the utility or grid operator, it looks like one controllable power plant
   
   

Why VPPs matter

For the grid

• Improves reliability during peak demand or outages

• Reduces the need for expensive fossil fuel “peaker” plants

• Helps balance renewable energy variability
  
  

For participants (homes, businesses, communities)

• Earn money or bill credits

• Lower energy costs

• Increase resilience (backup power)
  
  

For the environment

• Enables more clean energy

• Cuts emissions

• Uses existing assets instead of building new plants

Example

On a hot summer afternoon:

• Thousands of homes in a VPP slightly reduce AC use

• Batteries discharge for 1–2 hours

• EV charging pauses temporarily
  
  

Result: The grid avoids a blackout, and participants get paid.

Use this guide to determine which states have active or near-term VPP programs. Use the links to explore incentives and enroll when open. Sunlight’s battery-only loan product is an ideal way to remove upfront barriers and maximize participation in grid modernization efforts.

California – Demand Side Grid Support (DSGS)

• Link: https://www.energy.ca.gov/programs-and-topics/programs/demand-side-grid-support-program

• Incentive: ~$60–80 per kW/year performance payments

• Effective: May 1 to October 31 annually; latest guidelines effective April 2025

• Eligibility: Must have 1 kW/2 hr stationary battery minimum

Hawaii – Bring-Your-Own-Device Plus (BYOD Plus)

• Link: https://www.hawaiianelectric.com/products-and-services/customer-incentive-programs/bring-your-own-device-plus

• Incentive: $400/kW + $400/kW LMI upfront; full retail export credit

• Effective: Enrolled May 15, 2025, for a 5-year term

• Eligibility: Storage-only systems, LMI bonuses available

Maryland – H.B. 1256 (DRIVE Act)

• Link: https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/hb1256?ys=2024RS

• Incentive: To be defined in utility-filed pilot tariffs

• Effective: Law effective Oct 1, 2024; utilities must file by July 1, 2025

• Eligibility: Battery-only systems will qualify when pilot begins

New Jersey – PSEG VPP Pilot & Energy Storage Incentive

• Link: https://www.dsireinsight.com/blog/2024/4/26/making-virtual-power-plants-a-reality

• Incentive: $8,000–$16,000 per 8 kW system; overage eligible for on-bill repayment

• Effective: Active since Dec 2023; ongoing

Georgia – Solar + Battery Storage Pilot

• Link: https://www.georgiapower.com (search 2025 IRP)

• Incentive:

  • Customer-directed: $15/kW upfront + $1.50/kWh for dispatch

  • Company-directed: $750/kW or $1,000/kW (LMI)

• Effective: Target launch mid-2025 following IRP approval

Colorado – Xcel DERMS & Renewable Battery Connect

• Link: https://www.utilitydive.com/news/enphase-vpp-colorado-xcel-energy-battery-connect/739834

• Incentive:

  • Aggregator VPP: $134/kW generation, $21/kW distribution, $69/kW transmission

  • Renewable Battery Connect: $350/kW upfront + $100/kW/year for 5 years

• Effective: Spring 2025 for Battery Connect; VPP pilot Jan 2025–2030

Texas – ERCOT ADER, GVEC, Bandera Electric

• Links:

  • GVEC: https://www.mysanantonio.com/business/article/tesla-ercot-gvec-20202146.php

  • Bandera: https://www.expressnews.com/business/article/bandera-electric-backup-batteries-texas-grid-base-20213327.php

• Incentive:

  • GVEC: Rebates + annual peak savings; Tesla battery integration

  • Bandera: $36.99/month subscription; grid support + backup power

• Effective: Active since 2023; new expansion in 2025

Vermont – Green Mountain Power (GMP) VPP

• Link: https://greenmountainpower.com/rebates-programs/home-energy-storage/bring-your-own-device/

• Incentive:

  • $850/kW (3 hr); $950/kW (4 hr) + $100/kW solar retrofit

  • $13.50/month for frequency regulation + optional $55/month lease

• Effective: Active since 2015; expanded Aug 2023

New Hampshire – Liberty Utilities VPP Pilot

• Link: https://new-hampshire.libertyutilities.com/bath/residential/smart-energy-use/electric/battery-storage.html

• Incentive:

  • Option 1: $25/$50 per month based on battery count

  • Option 2: $4,866 purchase w/ net metering

• Effective: Began 2019; full but existing customers still active

Utah, Wyoming, Idaho – Rocky Mountain Power VPP

• Link: Utility websites and CleanTech summaries

• Incentive: Utility-managed VPPs with storage compensation

• Effective: Pilots since 2023; ongoing expansion

Massachusetts – Electric Sector Modernization Plans (ESMP)

• Link: https://nccleantech.ncsu.edu/2024/04/26/what-are-states-doing-to-make-virtual-power-plants-a-reality/

• Incentive: To be finalized via ESMP utility filings (National Grid, Eversource, Cape Light)

• Effective: Plans filed Jan 2024; DPU approvals pending

Illinois – DER/VPP Market Reform

• Link: Same CleanTech policy brief (above)

• Incentive: Pilots and tariffs under development

• Effective: Legislative and utility planning underway