The vast stock of solar and batteries in Australian homes represents a massive opportunity if the current hurdles to Virtual Power Plants can be cleared, writes Plico's George Martin in a guest post on The Energy.

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 is already a world‑leader in rooftop solar and household batteries. With millions of households already generating their own energy and soon to be almost as many storing that energy, you might expect that Virtual Power Plants (VPPs) would be ubiquitous. And yet, they remain a fairly niche offering. What’s holding them back, and what real role can they play in delivering flexible demand and grid stability?

What exactly is a VPP?

A virtual power plant is essentially a means to aggregate and orchestrate consumer energy resources (CERs) — solar inverters, batteries and EV chargers — so they form a coordinated, flexible, decentralised power station, accessing the energy behind the household electricity meter. Instead of relying on one large generator ramping up or down, a VPP can mobilise thousands of small assets together.

In practice, that means:

• Exporting during peaks: When demand spikes, the VPP can dispatch energy from home batteries into the grid. This helps grid stability and produces value for the customer.
• Absorbing excess generation: On sunny, low‑demand days (think spring) the VPP can soak up any surplus solar to maintain supply-and-demand equilibrium. This also helps grid stability, produces value for the customer and they have a full battery as the Sun goes down.
• Providing grid services: Grid stability services that electricity generators provide, such as frequency control and voltage support, can also be provided by a large, coordinated set of home batteries. The benefit is clear, by leveraging assets already available to provide services, the owners of these home batteries are rewarded financially. And all users of the grid benefit as fully utilising these assets can defer or eliminate need for further grid investment.

This is what flexible demand is all about — shifting supply or consumption in real time (or near‑real time) so the system stays balanced. With enough behind‑the‑meter assets behaving as one, we can smooth peaks and troughs without solely relying on new network build.

Why aren’t VPPs mainstream yet?

Despite the tailwinds — a strong solar market, falling battery costs, supportive policy frameworks — VPPs are still not mainstream. We see three broad challenge areas: hardware integration, product offering design, and consumer trust.

1. Hardware and integration challenges

Running a VPP isn’t just putting clever software on top of devices. It requires deep orchestration of hardware, communications and real‑world operational reliability.

• Interoperability issues: Different battery manufacturers may use different protocols, communication languages or firmware behaviours. Integrating heterogeneous devices into a single aggregator platform often means building customised APIs, firmware validation and ongoing maintenance. It’s why Plico has partnered with Stockland at their Nara housing development in Western Australia to provide homogeneous solar and battery systems that connect directly to the Plico Virtual Power Plant, allowing households to generate, store, and share energy.
• Real‑time control and reliability: The aggregator must manage connectivity, data security, remote commissioning and monitoring, fault detection and remediation for thousands of installs. A missed dispatch due to a hardware communication failure reduces the value and reliability of the VPP.
• Performance standards: For market services like frequency-controlled ancillary service (FCAS), assets must respond quickly, predictably and record data in milliseconds. Not all residential systems are designed for sub‑second response, or they may be constrained by home usage or state of charge. Some VPPs limit eligibility to high‑performance inverters or battery brands to ensure reliability.
• Scalability and servicing: As participation grows, remote operations, analytics, firmware updates and customer support must scale. The cost and complexity grow quickly.

To manage these challenges, some VPP aggregators partner exclusively with certain manufacturers to reduce integration complexity; others invest heavily in universal control platforms and device‑agnostic middleware.

2. Product offering challenges

Even with the tech working, packaging it into a viable commercial offer is tricky. For people who have paid $15,000 to $25,000 for a home battery, the prospect of giving someone else control over that investment for $100 to $200 a year isn’t particularly inviting. These are the customers who will be the most difficult to persuade into joining a VPP, unless the energy industry is successful in appealing to their altruistic nature.

‘Value-stacking’ is an industry term for the ability of players in the energy market to realise different revenue streams. We need to also think of it in terms of building up value for our customers. Persuading CER buyers to join a VPP requires us, as an industry, to not just package it up as a VPP offer but think of ways of value stacking for them. And no, I don’t mean tell customers they’re getting FCAS revenue. It’s up to us to pitch a CER proposition holistically, and being in a VPP is just part of it.

Some providers address this by offering upfront discounts on hardware contingent on VPP participation, or by structuring opt‑in/opt‑out models with performance‑based rewards rather than fixed savings. Others provide clearer dashboards or guaranteed minimum payments to build confidence. The key message for us, as an industry, is that a VPP offer needs to be wrapped up in an overall CER offer, not necessarily a standalone proposition.

3. Trust and awareness challenges

For a residential audience, VPPs often feel abstract. That gap matters. Homeowners swing between areas of concern, but all are underpinned by the fear of the unknown. Householders may struggle to understand what they’re signing up to. Many homeowners ask: “Will I lose control of my battery?”, “How much will I actually earn?”, “What happens if the VPP takes control when I need the battery myself?” In addition, early industry VPP marketing may have overstated savings or benefits, which erodes trust. And many homeowners have data and privacy concerns. Granting remote access or sharing energy usage data raises understandable concerns about autonomy and security.

The way forward is transparency: clear, simple terms; communicating actual performance and rewards; and strong support, especially during onboarding. Once that trust is established, Plico has found homeowners are happy and willing to hand over the reins, as they see the tangible outcomes and make the connection between their participation, reward, and value to the community. As more homeowners share their real results with each other, and with the news media, the concept becomes more legitimate and credible.

When scaled, VPPs can provide a foundational piece of a resilient, renewable‑rich grid. Australia’s system operator and market bodies regularly highlight the role of consumer energy resources in future flexibility. When thousands of homes synchronise discharge during a peak event, the collective effect can rival a traditional peaking plant — except it’s behind the meter, lower emissions, and more distributed. That means less investment in large‑scale infrastructure, fewer network constraints, and more resilience across the grid. Overall, this will lower the cost of the energy transition for all Australians.

A VPP offers a compelling vision, turning many households’ solar and battery and smart devices into a single orchestrated machine that supports both the grid and the homeowner. But the road to scale is paved with practical integration, commercial packaging and trust building.

Once those hurdles are cleared — through better hardware compatibility, clearer contracts, compelling value — VPPs can move from niche to ubiquitous. They’re not just another product: they’re a key enabler of a smarter, cleaner, more flexible grid.

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!

Have a question about solar + battery?