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Virtual power plant adoption has been slower than many in the industry once expected or hoped. Most distributed energy resources located in homes are small and not easily accessed and orchestrated, and convincing customers to use even those few kilowatts as grid resources can be a lift. But at least when it comes to distributed storage, interest among both utilities and state policymakers is finally growing. And the sector has both load growth and national concern over energy prices to thank.
As the value of distributed capacity grows, the industry is focused on lowering the barrier to entry for homeowners, testing out programs that prioritize getting batteries into homes up front, and growing the underlying megawatts available for VPP programs. That means new utility programs, updates to existing programs, and emerging third-party aggregations; models differ based on who owns the battery, who pays the up-front cost, and who captures its grid and tax-credit value.
Last week, New Jersey utility Public Service Electric & Gas Company unveiled a new program, dubbed GridSmart, where it will help with financing new batteries, but customers will ultimately own their systems. Homeowners receive a $5,000 incentive toward purchase and installation of a home battery, and can pay the remaining balance through 0% on-bill financing. In exchange, those batteries will be integrated into PSE&G’s residential VPP portfolio and leveraged to reduce grid demand during peak periods.
