Plico's Chief Technology Officer writes about unlocking the power of solar and batteries in Australian homes through Virtual Power Plants (VPPs) and the hurdles to overcome to bring VPPs into the mainstream. 

The full story available is here: https://theenergy.co/article/hardware-offers-and-trust-vpps

Hardware, offers and trust: how VPPs could deliver for Australia

Australia leads the world in the uptake of rooftop solar and is rapidly expanding its use of home batteries. With so many households producing their own electricity and more adding batteries to store it, you’d think Virtual Power Plants (VPPs) would be widespread by now. Instead, they’re still operating on the fringe. So what’s slowing their momentum, and how can they genuinely support flexible demand and strengthen our energy grid?

What is a VPP?

A Virtual Power Plant brings together and actively manages consumer energy resources (CERs) such as rooftop solar, home batteries and EV chargers to operate like a single, adaptable power station drawing on energy behind the meter. Rather than depending on a traditional central generator to ramp output up or down, a VPP coordinates thousands of small devices to respond collectively.

In practice, this can look like:

• Sending power out during peak-demand periods:
  When the grid is under strain, the VPP can release stored energy from participating home batteries. This supports system stability and delivers financial benefits to households.
• Absorbing surplus solar when demand drops:
  During sunny days with low consumption, like sunny spring days, the VPP can draw in excess rooftop generation to help maintain balance. Customers gain value and start the evening with a charged battery.
• Delivering essential grid support services:
  Functions usually provided by large generators, such as frequency regulation and voltage control, can also be delivered by a well-coordinated fleet of home batteries. Using existing assets in this way rewards participating households and can delay or avoid expensive network upgrades.

At its core, this is the promise of flexible demand — adjusting consumption or supply almost instantly to keep the electricity system in harmony. With enough behind-the-meter resources moving together, we can smooth the grid’s highs and lows without relying solely on new infrastructure.

Why are VPPs not mainstream?

Despite VPPs being acknowledged as critical to the future of energy in Australia, they are not yet mainstream. George identified three broad challenge areas: hardware integration, product offering design, and consumer trust.

1. Technical barriers

Operating a VPP goes far beyond smart software — it requires tight coordination across physical equipment, communications systems and reliable field performance.

• Compatibility gaps: Home batteries and inverters come from many manufacturers, each with unique protocols and firmware quirks. Getting them to work together often means custom integrations, constant testing and ongoing upkeep. This is why projects like Stockland's Nara development in WA use Plico solar and battery systems that plug seamlessly into the Plico VPP.

• Reliable real-time operation: Aggregators must maintain secure, always-on connectivity with thousands of devices, handling commissioning, monitoring, fault detection and remote fixes. Any communication failure during a dispatch weakens the VPP’s value.
• Meeting performance requirements: Some grid services (like FCAS) demand lightning-fast, predictable responses and high-resolution data. Not every household battery can respond in milliseconds, especially when limited by state of charge or the home’s own energy needs. As a result, some VPPs only accept specific high-performance brands.
• Scaling operations: As more homes join, the load on remote operations, analytics systems, firmware management and customer support increases sharply.

To overcome these issues, some VPP providers streamline operations by partnering with a small set of compatible manufacturers, while others build broad, device-agnostic control platforms to work across diverse hardware.

2. What's in it for customers?

Even if the technology works seamlessly, turning a VPP into something customers actually want to sign up for is another hurdle. Households who’ve already invested $15,000–$25,000 in a battery are often reluctant to hand over partial control of it for only a modest annual return. These customers typically need a stronger emotional or practical reason to participate — simple VPP payments rarely move the needle.

The industry often talks about “value-stacking”, meaning extracting multiple revenue streams from CERs. But we also need to flip that thinking: how do we stack value for the customer? A VPP shouldn’t be pitched as a standalone add-on. It needs to form part of a broader, integrated CER package that delivers tangible advantages beyond occasional grid services. And no — telling households they’ll earn FCAS income is not the answer.

To overcome this, some companies offer discounted hardware tied to VPP enrolment, while others build flexibility through opt-in/opt-out arrangements or reward customers based on actual performance. Clearer insights, simpler dashboards and guaranteed minimum payments can also help build trust.

Ultimately, the offering must present a holistic, customer-first energy solution — with VPP participation as one component, not the whole story.

3. Barriers to awareness and trust

For many households, the idea of a VPP feels vague or hard to grasp — and that uncertainty fuels hesitation. Homeowners often aren’t sure what participation really means. Common questions include: Will I still control my battery? What will I actually earn? What if the VPP needs my battery at the same time I do? Past industry over-promising hasn’t helped either, and concerns about data access and digital privacy remain strong. Allowing remote control of home energy equipment is a big psychological leap for most people.

The solution lies in openness and clarity. Simple explanations, honest performance data, and strong onboarding support go a long way to building confidence. Plico has consistently seen that once people understand how it works — and experience the rewards firsthand — they’re comfortable sharing control. Word-of-mouth and real customer stories then reinforce legitimacy and help normalise the concept. Plico developed a Truth about the Plico VPP article to help potential customers understand the VPP and address common misconceptions. 

At scale, VPPs have the potential to become a core element of a stable, renewables-heavy electricity system. Australia’s energy authorities frequently acknowledge how important consumer energy resources will be for flexibility. When thousands of distributed batteries act together during a demand spike, they can match the impact of a conventional peaking plant — but with lower emissions, greater geographic spread and no need for new megaprojects. This reduces pressure on the network, strengthens resilience and ultimately cuts the overall cost of the clean energy transition for everyone.

A VPP paints a powerful picture: thousands of home solar systems, batteries and smart devices working together as one coordinated energy resource that benefits both households and the wider grid. But achieving this vision at scale requires overcoming real-world barriers like trust and technical integration. 

When these challenges are resolved, VPPs can shift from a specialist option to a mainstream feature of Australia’s energy landscape. They’re more than a bolt-on service; they’re a foundational tool for building a cleaner, more adaptive and resilient electricity system.

Find out more about Plico's Virtual Power Plant or reach out to our switched-on team on 1300 175 426 to find out how you can benefit from our solar + battery + VPP offering!

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