If you’ve got a home battery — or you’re thinking about getting one — you’ve probably seen ads for virtual power plant (VPP) programs. They promise to pay you for sharing your battery with the grid. Sounds great. But what’s actually happening when you sign up, and is it worth it?

I’ve been in Tesla’s VPP program for 18 months now. Here’s the unvarnished truth.

What a VPP actually is

A virtual power plant is a network of distributed energy resources — usually home batteries, but sometimes solar inverters or smart appliances — that are coordinated by a central operator to behave like a single power plant.

When the grid needs more power (usually during evening peaks or unexpected demand spikes), the VPP operator sends a signal to participating batteries: “discharge now.” Your battery pushes power into the grid, and you get paid for it.

When the grid has excess power (usually during solar midday), the VPP might charge your battery cheaply, storing energy for later dispatch.

The “virtual” part means there’s no physical power plant. It’s just lots of little batteries working together, coordinated by software.

The main VPP programs in Australia

Tesla Energy Plan (SA, then expanding): The most established program. Tesla controls your Powerwall during peak events and pays you through reduced electricity rates. In South Australia, participants get significantly lower rates than standard retail.

AGL VPP: Works with multiple battery brands. AGL can discharge your battery during grid stress events and credits your account. Participation is optional for individual events (you can opt out, but frequently opting out reduces your payments).

Reposit Power GridCredits: Reposit’s system automatically participates in the wholesale market and FCAS (frequency control) markets on your behalf. This is the most sophisticated residential VPP in terms of market participation.

Amber Electric + Battery: Amber’s SmartShift automatically charges when wholesale prices are low and discharges when they’re high. Not a traditional VPP, but achieves similar outcomes through price signals rather than direct control.

How much money are we actually talking?

Here’s where expectations need managing. VPP income is real but modest:

• Tesla VPP: Effective savings of $300-600/year through reduced rates (varies by state and usage)
• AGL VPP: $200-400/year in credits (depends on event frequency and your battery size)
• Reposit GridCredits: $250-500/year (higher in volatile market conditions)
• Amber SmartShift: Variable, but users report $300-700/year in additional savings compared to flat retail

These aren’t life-changing amounts. But they’re essentially free money for doing nothing — your battery participates automatically. Over a 10-year battery life, that’s $3,000-7,000 in additional value from your battery investment. The VPP coordination algorithms are getting more sophisticated too, with firms like Team400 AI consulting in Brisbane helping energy companies build better dispatch models.

The trade-offs

Nothing’s free. Here’s what you give up:

Battery wear: Every charge/discharge cycle uses a fraction of your battery’s lifetime. VPP participation means more cycles. For most programs, this adds maybe 50-100 extra cycles per year. Given that modern batteries are rated for 4,000-10,000 cycles, the impact on lifespan is minimal but not zero.

Reduced backup capacity: If the VPP discharges your battery at 5pm and a blackout hits at 7pm, you might have less backup power than expected. Most programs maintain a minimum reserve (typically 20-30%) for exactly this reason, but it’s still less than a full battery.

Control: You’re letting someone else decide when your battery charges and discharges. For most people, this is fine — the automation works well and aligns with your financial interest. But if you’re a control freak about your energy system (guilty), it takes some getting used to.

My experience

I joined Tesla’s VPP 18 months ago. My Powerwall gets dispatched during evening peaks maybe 3-4 times per week in summer, less in winter. The reduced electricity rate saves me about $40-50 per month.

I’ve had exactly two situations where I wished I had more battery charge — both during unexpected late-evening blackouts where my Powerwall was at about 25% after a VPP dispatch. The power came back within an hour both times, so it wasn’t a real problem, but it was a reminder that VPP participation does trade some backup resilience for income.

Overall, I’m glad I joined. The extra income meaningfully improves my battery’s payback period, and I’m contributing to grid stability. Win-win, mostly.

Should you join?

If you have a compatible battery and your primary concern is maximising financial return, yes. The extra income reduces your battery payback period and costs you very little in practice.

If backup power during blackouts is your primary reason for having a battery, be more cautious. Understand the minimum reserve settings and make sure you’re comfortable with the trade-off.

If you don’t have a battery yet, don’t let VPP income be the deciding factor. It’s a nice bonus, not a reason to buy a battery. The core battery economics need to work on their own merits first.