3 min read

What is a Virtual Power Plant (VPP)?

Picture of Plico Team Plico Team : Updated on June 5, 2025

VPP

A virtual power plant is a decentralised energy supply comprised of many individual power sources. These power sources are typically renewable energy generators, with residential solar systems being the most prevalent. A virtual power plant can distribute energy to the electricity grid to prevent demand from overtaking supply, an issue that leads to blackouts.

Australia has one of the highest uptakes of solar panels in the world. And it makes sense - our country is bathed in sun! But traditional solar systems are most useful during the day, when the sun is blazing. During evenings and low-sun days, those homes are not generating electricity, and typically rely on the grid. So network operators are looking for ways to store renewable energy and stabilise the overall power supply.

An uninterrupted energy supply is achieved when there’s a balance between the output of electricity generators and the demands of consumers (homes and businesses).

This is the power of a virtual power plant.

What is a Virtual Power Plant?

A virtual power plant (VPP) is a network of solar systems and batteries, connected together using technology and software. This enables them to share energy and put energy into the central grid. A VPP represents a single large power source, made of lots of smaller individual ones. It’s usually managed by a central operator, who is able to coordinate renewable energy supply and deliver it to the grid if required.

When you are part of a VPP, the operator can draw on the energy stored in your battery and in doing so, pay you for your input. Different VPPs have different arrangements for their members.

VPP can also include other places that store energy, such as electric vehicles, which are typically storing (rather than using) energy for a large part of the day. With increasing uptake of electric vehicles, this form of energy storage is likely to increase.

What are the benefits of a VPP?

When you join a VPP, you get paid for the electricity stored in your battery when its needed most. This is on top of your normal solar feed-in tariff (allocated to you when your excess energy is exported to the grid, when your battery is full).

Being part of a VPP also means you’re supporting your local grid - and your community - during periods of high demand and potential blackouts. By sharing your stored electricity, you help to stabilise the overall network and make renewable energy more reliable for everyone.

In this way, you contribute to the growth of a reliable renewable energy network and increase demand for solar technologies. More solar is good for people, and great for the planet. In the long-term, if we want to phase out power plants powered by fossil fuels, we need a reliable and stable source of energy that provides electricity when it’s needed. VPPs provide a solution.

Additionally, your VPP operator will optimise your solar system for you.

Are there any drawbacks to VPPs?

The VPP operator will draw energy from your battery when it’s needed most, to prevent emergencies in the grid network that cause blackouts. Typically they will not use all the energy in your battery, and they won't use it often.

The type of solar battery you have will determine which VPPs you can join. Some VPP providers may also require installation of software to work with a specific battery system, and/ or an energy management device. Some providers are “bring your own battery” which also means there’s no discount on your battery and the type of battery you have might not be eligible to join.

How can I get involved?

Plico was one of Australia’s first fully privately-funded VPPs and now has the largest network of batteries in WA.

Plico's VPP is included in your clean energy package, which includes a battery and inverter installation, in addition to your solar panels (with no upfront cost on standard installations). Our plans also include 10 years of warranty, ongoing support and replacement parts.

We are excited to be at the forefront of the movement towards accessible, affordable and sustainable renewable energy. Our VPP is helping stabilise the overall energy network and supporting customers and businesses in the move away from reliance on fossil fuels and into a future that values renewable energy. Australia has an abundance of sun - let’s make the most of it!

Plico members are part of a growing movement towards reliable renewable energy. If you’d like to learn more about installing a solar + battery solution and being part of Plico’s VPP, talk to one of our friendly team members or call 1300 175 426.

Have a question about solar + battery?

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