Virtual Power Plants Pay Homeowners for Grid Power

Jeff and Jenny Wright haven’t paid an electric bill for their Houston home in more than a year. Instead, the couple earns money by selling unused power from their solar panels and Tesla battery packs back to the Texas grid — a system known as a virtual power plant (VPP) that is rapidly gaining traction across the United States. “I’m getting fairly close to retirement, so cost control for us is a big thing,” Jeff Wright told NBC News. “If enough of us get together and do this, it will help everybody in Texas and ourselves as well.”

What Are Virtual Power Plants?

A virtual power plant is a network of distributed energy resources — rooftop solar panels, home battery systems, smart thermostats, and electric vehicles — aggregated through a central control system to supply power to the electrical grid. Unlike traditional power plants that generate electricity at a single large facility, VPPs draw power from hundreds or thousands of small, distributed sources, coordinating them to act like a single, flexible power plant.

VPPs currently exist or are in development in 35 states and Washington, D.C., with the largest networks operating in California and Texas, according to pv magazine USA.

Why Now? The Grid Under Pressure

The U.S. electric grid faces its most significant demand growth in decades. Americans today pay 40% more for electricity on average than they did six years ago, and energy prices jumped 4% in April 2026 alone, partly driven by the U.S.-Israeli war with Iran. Meanwhile, the grid anticipates 40% growth over the next 15 years, fueled by AI data centers, electrification, and population growth.

“The grid hasn’t seen growth for decades, and people don’t realize that,” said Paul Dickson, president of Sunrun, America’s largest distributed energy company. “That’s getting turned on its head over the next 15 years — it’s a lot of strain on the same poles and wires.”

How VPPs Are Scaling

Sunrun currently has 107,000 customers enrolled in VPPs nationwide. In 2025, those customers contributed 18 gigawatt-hours (GWh) of power back to the grid — enough to power 15 million homes for one hour — and were paid $17 million for that energy. The company aims to grow its fleet of dispatchable battery systems to 10 GWh by the end of 2028.

Reliant, one of Texas’ primary energy providers, has 300,000 customers participating in VPP programs. “You really don’t need a bunch of fancy devices in order to be a participant,” said Bill Clayton, Reliant’s senior vice president. He called electric vehicles “the crown jewel” for VPPs, noting that EV integration “is going to be a critical phase for us.”

According to the U.S. Department of Energy, the country will need to add resources to support approximately 200 gigawatts (GW) of peak demand. The DOE projects VPPs could supply 10% to 20% (80 GW to 120 GW) of U.S. peak demand by 2030.

A report by the Rocky Mountain Institute found that VPPs could reduce peak demand in the U.S. by 60 GW by 2030 and help reduce annual power sector expenditures by $17 billion.

Speed vs. Traditional Power Plants

One of VPPs’ most compelling advantages is deployment speed. Building a conventional power plant takes 10 to 12 years; a nuclear facility could take decades. A VPP can be operational in just a few months.

“The 100,000 homes that we do every year equates to the same output as a nuclear power plant,” Dickson said. “Smaller power plants that are being built in three to five years, we do every three to four months.”

Policy Landscape: States Lead as Federal Support Shifts

The policy environment for VPPs is a mixed picture. The One Big Beautiful Bill Act, signed in July 2025, cut tax credits for residential rooftop solar and other clean energy incentives, potentially slowing the adoption of distributed energy resources that feed VPPs.

However, states are stepping up. On her first day in office in January 2026, New Jersey Governor Mikie Sherrill declared an energy affordability crisis and ordered utilities to develop VPP programs, as reported by Utility Dive. Illinois passed the Clean and Reliable Grid Act, setting new storage targets and VPP requirements.

Green Mountain Power in Vermont saved customers $3 million through its battery programs, while Arizona Public Service has 90,000 thermostats enrolled in its Cool Rewards program, equivalent to 140 megawatts of peak demand reduction.

Challenges Ahead

Despite rapid growth, VPPs face significant hurdles. VPP capacity in North America grew 13.7% to 37.5 GW in 2025, but Wood Mackenzie notes the market is “broadening faster than it is deepening.” Many programs remain in pilot phases, and the EnergyHub “Huels Test” found that even the most advanced VPPs score only about 2 out of 4 on maturity compared to gas peaker plants.

“20th century solutions will not build a 21st century grid,” said Allison Wannop, vice president of regulatory affairs at Sparkfund.

What’s Next

With the VP3 coalition targeting 160 GW of peak-coincident VPP capacity by 2030 and universal consumer access by 2035, the trajectory is clear. Sunrun and NRG Energy have partnered to build toward a 1 GW virtual power plant in Texas by 2035. As the Wrights and hundreds of thousands of other households demonstrate, the model works — the question is whether it can scale fast enough to meet the nation’s surging energy needs.

For homeowners like Jeff Wright, the calculus is simple: “We’ve got two batteries here, and what we have is not going to stabilize the entire grid, but if enough of us get together and do this, it will help everybody.”