Let's be honest: your thermostat doesn't look like a power plant. Neither does your electric vehicle, home battery, or HVAC system. But utility and energy companies increasingly want to treat them like one - because, apparently, a power plant is just a vibe now.
A virtual power plant, or VPP, is a collection of household devices (smart thermostats, EV chargers, home batteries, solar panels) that a utility can command to draw less electricity during peak hours. That might mean adjusting your thermostat or delaying EV charging when demand spikes. In exchange, you get a discount on your energy bill and, sometimes, a signing bonus. Seth Frader-Thompson, CEO and cofounder of EnergyHub, a software company that helps utilities run VPP programs, says a smart thermostat program may offer an initial bonus of roughly $50 to $150, plus about $25 to $50 per year. Home battery and EV devices could yield hundreds or thousands of dollars in annual savings.
The amount of power throttled in any one home is small, but it adds up. "When you put it together at the scale of hundreds of thousands, or millions, it has a pretty profound impact," Frader-Thompson says, equivalent to "firing up a power plant." As of 2023, there were already more than 500 VPP programs in the US alone, and the number has grown since - especially with big players like Google investing in this tech to power their data centers. An estimated 4 million households with smart thermostats were enrolled in a VPP program as of last year.
But the approach is still new, and some programs may have kinks, says Severin Borenstein, faculty director of UC Berkeley’s Energy Institute at Haas and member of the board of governors of the California Independent System Operator. If a program isn't implemented well, a utility may incorrectly predict when VPP participants plan to use more electricity and pay them for not using energy they weren't going to use anyway - potentially increasing bills for nonparticipants. Still, Borenstein says, "if we do it well, I think it can really be a benefit," one that could help utilities avoid expensive grid upgrades or emergency conservation measures.
Most consumer VPPs today are less dramatic than the name suggests and don't actively send energy from your EV or home battery to the grid. But battery-to-grid programs are on the rise and could offer even larger savings in the future.
So how do you actually sign up, and is it worth it? Here's the breakdown.
**1. Check if your utility has a program - and if it supports your devices.**
The types and brands of devices supported vary. Your utility's website is the obvious place to look, but don't expect to see the phrase "virtual power plant." Search for your utility's name plus terms like "demand response," "peak rewards," "connected solutions," "battery storage," "smart thermostat rewards," "managed charging," or "bring your own device." But don't stop there, says Frader-Thompson: "The way most people actually learn about this and sign up is through the manufacturer of the device they have." That means checking your smart thermostat app, EV app, or battery app for offers.
Once you find a program, enrollment might be as simple as clicking through an app, filling out a utility form, or confirming your account via a third-party page. EV drivers may enroll "with a click of a button" through their automaker app, says Joseph Vellone, CEO of the EV-focused VPP company ChargeScape.
Eligibility can get annoyingly specific. A smart thermostat program may require an approved Wi-Fi thermostat; an EV program may depend on your automaker, charger, utility territory, or rate plan; a battery program may depend on brand, inverter, installer, and communication capabilities. Programs aren't evenly distributed either - most are in California, Texas, New England, and increasingly parts of the mid-Atlantic region.
**2. Ask yourself how much flexibility you can afford.**
Before signing up, decide if you're willing to let a company adjust a device in your home - even if it's only a few times a week. For some, it's easy: If your EV sits plugged in all night but only needs two hours to charge, shifting charging might be invisible. A home battery program could be lucrative if you understand how often the battery will be used, how much backup power you can keep, and whether extra cycling affects your equipment.
But other households "do not have the flexibility to engage in one of these programs," says Sanya Carley, a professor at the University of Pennsylvania and faculty director of the Climate Center for Energy Policy. Night-shift workers, caregivers, those with health needs, or people already aggressively limiting energy use may have less room to let a utility adjust heating, cooling, or charging during peak hours.
**3. Review the opt-out rules and read the fine print.**
VPP programs generally let you override temporary changes - that's what makes them workable. Can you skip a day when you have guests? Can you tell your car to charge immediately before a road trip? Can you keep a battery reserve for outages? Utilities are typically motivated to make opt-out simple.
Also, investigate where your data might go. EV and battery programs may collect data on charging status and schedule; smart thermostat data may reveal patterns about when people are home, sleeping, or using appliances. The Electronic Frontier Foundation warns this data could be used to infer private routines - and it might move through the utility to device manufacturers, software platforms, or third parties. ChargeScape and EnergyHub say data is limited and functional. EV data is focused on "the physics and the energy of the asset itself," says Vellone. Frader-Thompson adds, "It doesn't really matter what any one customer is doing. It matters what the average customer is doing."
**4. Decide if the offer is worth it.**
Compensation varies widely and may come as a signup bonus, gift card, monthly bill credit, discounted thermostat, free or cheaper EV charging, annual performance payment, or "export credits" for energy sent back to the grid. The most expensive devices - EVs and home batteries - often yield the greatest savings, which adds a barrier to entry for those who can't afford them. A smart thermostat program is a low-stakes start.
You might also sign up for altruistic reasons: supporting grid health or avoiding a new power plant in your community. "There are not that many things that you can do that directly contribute to decarbonizing the electric supply, or to improving affordability, or to improving reliability, and this is just a clearly effective way to do that," Frader-Thompson says. "And you get paid for it."
In short, the best VPP program isn't necessarily the one that pays the most. It's the one that clearly tells you what it controls, how much you'll get, how easily you can say no - and how well it supports community energy goals. Your home probably won't feel like a power plant. But if your thermostat, car, or battery can bend a little when the grid needs it, your home can act like a small piece of one.