What are Virtual Power Plants?
A Virtual Power Plant (VPP) is a network of many small, distributed energy systems like solar panels and batteries, centrally managed to work together as a single power source. In Australia’s evolving energy landscape—where renewables like solar and wind are increasingly common but unpredictable—VPPs help stabilize the grid by coordinating these resources and allowing battery owners to earn income by supplying power during peak demand. Curious how your home battery could become part of this energy revolution and even put money back in your pocket? Read on to discover how VPPs are transforming Australia’s electricity system for a cleaner, smarter future.
TLDR: A Virtual Power Plant (VPP) is not about having battery storage or energy generation located in one central place. Instead, it consists of numerous small power generation systems scattered across the country, all centrally controlled from a few locations.
What Are the Main Sources of Electricity in Australia?
In Australia, electricity primarily comes from coal, natural gas, hydroelectricity, and increasingly from wind and solar. Unlike many other countries, Australia does not have nuclear power generation. The downside of coal and gas is their reliance on hydrocarbons, contributing to pollution. Conversely, the disadvantage of wind and solar is their intermittent reliability. Hydroelectricity stands out as the most efficient and flexible form of energy generation, in addition to being non-polluting. Collectively, these diverse sources power essential appliances such as fridges, air conditioners, and ovens, highlighting our profound dependence on electricity.
Australia has three main electricity grids. The primary grid connects all states and the ACT, excluding WA and NT, which operate their own independent grids. The eastern grid is managed by the Australian Energy Market Operator (AEMO), though each state's grid is managed individually. The ACT falls under the jurisdiction of the NSW grid authority.
Until about ten years ago, the eastern grid was relatively straightforward to manage. Although occasional unexpected outages at power stations presented challenges, contingency plans typically addressed these effectively.
Today, two significant changes affect the grid:
Reduced daytime electricity demand.
Increased generation from renewable sources.
The decrease in daytime demand results from widespread adoption of photovoltaic (PV) solar energy, where Australia leads globally on a domestic level. Unlike coal, gas, or hydro, renewable energy can be unpredictable, comparable to an unreliable employee—capable when available but not guaranteed.
The original design of Australia's electricity grid catered to a unidirectional energy flow. However, with electricity now generated by end-users, the grid has had to adapt to accommodate multiple smaller, unpredictable energy inputs.
Australia, along with many other countries, is now navigating how to manage these variable energy inputs. The partial solution to this issue lies in energy storage. By capturing and storing renewable energy when it's abundant, we create a reliable source of power. This is often referred to as SWB—Solar, Wind, and Batteries.
What Role Do Virtual Power Plants Play?
Given this context, why are virtual power plants being promoted? VPPs bring predictability and stability to the grid by centrally managing numerous distributed PV/Battery systems via the internet. By granting control to the electricity utility, these systems collectively manage substantial energy generation—potentially 1-5 Megawatts (MW)—equivalent to a small gas or hydroelectric plant.
But what incentive exists for individuals allowing utilities to control their battery systems? The answer lies in financial benefits. Utilities might pay up to double the standard electricity rate by discharging batteries during peak demand hours, typically from 5:30 pm to 7:00 pm. This creates a win-win scenario: utilities smooth out demand, and battery owners earn additional income. On average, this occurs 4 to 5 times weekly, varying seasonally.
Battery owners retain control over discharge limits—for instance, setting a minimum battery level of 50%. This ensures the VPP management company cannot discharge batteries below that threshold. Each household can set different discharge limits, offering flexibility.
Participation in a VPP means engaging dynamically in the wholesale electricity market. If wholesale prices typically sit at 12c/kWh but spike to 35c between 5:30 pm and 7:00 pm, participants can profit by selling stored energy at higher rates. When battery levels drop, electricity can be repurchased at lower rates once prices stabilize.
The rise of VPPs directly results from increased renewable energy generation. Historically, power generation occurred at a handful of large plants; now, generation is distributed across many locations. VPPs consolidate these dispersed sources, effectively managing them as a single entity.
There's much more to explore about VPPs, electricity trading, and grid stability, which we'll discuss further in our next blog.
Thinking About Adding a Battery?
Get in touch with us today and we’ll:
Check if you’re eligible for the rebate.
Provide a free consult to find you the right solar battery solution.
Connect you with a certified installer.
Why Battery Storage?
Thinking about adding a battery to your solar system? Battery storage lets you make the most of your excess solar energy, lower your electricity bills, and keep your essential appliances running during blackouts. With prices for lithium batteries dropping dramatically in recent years, solar batteries are now more affordable and practical than ever for Australian homes.
TLDR: The three main reasons for battery storage are:
Making use of excess electricity from solar panels
Reducing monthly or quarterly electricity bills
Providing backup power for essential circuits such as lights, refrigeration, internet modem, etc.
Where did Battery Storage come from?
Electricity is everywhere. We can’t see it, but most of the things we use in life are powered by it. Transportation is also beginning to adapt to electricity. Trains have relied on electricity for years, and now cars are trending in the same direction.
If we rely on electricity for most things, it makes sense to store it so we can use it when needed. Mobile phones wouldn’t be as useful without rechargeable batteries. Similarly, the rise of portable tools like drills, impact drivers, grinders, and vacuum cleaners shows how much we depend on batteries in daily life.
Australia has been at the forefront of adopting battery storage in homes. Given the size of the country, extending the grid to homes located many kilometres from the main line has often been uneconomical. Until recently, lead-acid batteries were the predominant form of storage. However, they were bulky, required well-ventilated spaces, and often needed regular maintenance—making them impractical for suburban homes.
The rise of lithium-ion battery storage has addressed many of these challenges. In the early 1990s, when lithium-ion batteries first became commercially available, the cost was about $7,500 USD per kWh. Today in Australia, you can buy high-quality LiFePO4 cells (without a battery management system or electronics) for around $220 per kWh. Prices have dropped dramatically, making battery storage far more economical.
How do Batteries work with Solar Panels?
If you have solar panels, storing excess electricity (that would otherwise be exported to the grid during the day) for use at night can make you more energy self-sufficient.
For example, exporting surplus energy to the grid might earn you 5–8c per kWh, whereas using stored energy at night could offset electricity that costs 30–35c per kWh. This reduces your power bill significantly. Electricity retailers are also moving towards time-of-use pricing, charging more during peak hours and less during off-peak periods. On such tariffs, you might pay 50c per kWh between 5–9 pm.
What is a Kilowatt-Hour?
We’ve introduced the term “kWh,” which can be confusing for some readers. Let’s break it down: kWh stands for kilowatt-hour—1,000 watt-hours. It’s the standard unit for measuring electricity consumption. Here are a few practical examples:
Electric kettle (1,800 watts): If boiling water takes 3 minutes, it uses about 0.09 kWh. At 30c per kWh, that’s roughly 2.7c per boil.
55-inch LCD TV (100 watts): Running it for 3 hours uses 0.3 kWh, costing about 9c.
LED lights (10 lights at 13 watts each): Running them for 5 hours uses 0.65 kWh, costing about 20c.
While these examples are straightforward, appliances like fridges and air conditioners are trickier to calculate. A fridge rated at 180 watts, though powered on 24/7, may only use 1.5–1.8 kWh per day because the compressor cycles on and off. Air conditioners also vary, using less energy once the room reaches the desired temperature.
How much could a solar battery save a homeowner?
If the price difference between exporting solar and buying electricity is 25c per kWh, and you use 12 kWh of stored energy at night, you could save about $3 per day—or around $1,100 per year. Savings could be even higher on time-of-use tariffs.
A third benefit of solar batteries is backup power for essential circuits during outages. Typically, these include lights, TV, fridge, and the internet modem. For example, if you’re hosting friends for the footy finals and the grid goes down, you wouldn’t even notice the power cut. While grid reliability is high in urban areas, rural areas experience more disruptions.
Backup power becomes critical during extreme weather events, such as storms that damage powerlines. After Queensland’s Cyclone Alfred, some households were without power for days. A generator can help in such cases, but a solar battery system is seamless—and silent. However, during overcast periods, you might need to ration energy if there isn’t enough sunlight to recharge the battery.
A fourth benefit of solar batteries is participation in Virtual Power Plant (VPP) schemes—this will be the topic of next week’s blog post.
Thinking About Adding a Battery?
Get in touch with us today and we’ll:
Check if you’re eligible for the rebate.
Provide a free consult to find you the right solar battery solution.
Connect you with a certified installer.
Australian Battery Rebate Scheme: What You Need to Know
The new Australian Battery Rebate Scheme could save you $365+ per usable kWh of battery capacity installed. This government initiative helps homeowners store excess solar energy, cut electricity bills, and support Australia’s renewable energy future. Find out how the rebate works, who’s eligible, and why now is the perfect time to act.
Quick Summary (TL;DR): The federal government is offering a battery rebate to help Australians store solar energy at home. This rebate is part of the existing SRES scheme (running since 2011) and gives you about $365+ per usable kilowatt-hour (kWh) of battery capacity installed. To qualify, your battery must be installed by a certified on-grid battery installer.
Why Does This Rebate Exist?
To understand this new battery rebate, it helps to know a little about how Australia got here.
Back in 2001, the government created the Renewable Energy Target (RET). Its goal was to encourage cleaner electricity by replacing coal and gas (our main sources of power) with renewable energy like solar, wind, and hydro.
At the time, renewables made up less than 5% of Australia’s electricity. To fix this, the government introduced a clever system:
Polluting energy producers (coal, gas, etc.) had to buy certificates to offset the CO₂ they created.
Renewable energy producers (like solar farms or rooftop solar owners) earned these certificates as a reward for clean energy generation.
This system made coal and gas a little more expensive while helping to fund renewable energy projects.
By 2015, Australia set a new goal: 33,000 gigawatt-hours (GWh) of renewable energy by 2020. We smashed that target two years early and by 2023, renewables were generating 95,000 GWh a year.
Why Batteries Are the Next Step
This massive growth in rooftop solar created a new challenge:
During the middle of the day, there’s now too much solar energy being pumped into the grid.
Coal power plants can’t easily shut down and restart quickly, so electricity prices sometimes drop below zero at midday.
The solution? Store excess solar energy in batteries during the day and use it at night when demand is higher.
That’s why the government introduced this battery rebate – to make home energy storage more affordable and speed up the transition to renewables.
How the Battery Rebate Works
Here’s what you need to know:
Rebate Amount: You’ll get about $365 or more per usable kWh of battery capacity installed. (For example, a battery with 10 usable kWh could mean a rebate of $3,650.)
Who’s Eligible:
Your battery and inverter must be on the Clean Energy Council (CEC) approved list.
Check batteries: CEC Battery List
Check inverters: CEC Inverter List
The installation must be done by an SAA-approved battery installer.
Check installers: SAA Accreditation Check
The site must already have solar panels installed.
Important Rules:
You can only claim the rebate once per property (so make sure you install the right size battery upfront).
There’s a maximum rebate limit for batteries up to 50 kWh per property.
The battery system must be VPP-capable (Virtual Power Plant ready).
Off-grid homes are eligible if they’re over 1km from the grid or would cost $30,000+ to connect.
How Much Could You Save?
The rebate effectively cuts battery prices by 30–50%. For many households, this makes home batteries much more affordable than ever before.
For example:
A 10kWh usable battery that costs $12,000 before rebates could now cost closer to $8,500 after the rebate.
No wonder batteries are selling out fast!
How Long Will the Rebate Last?
The federal government has committed $2.3 billion to this scheme. But once that money runs out, the rebate may be reduced or replaced by a new program.
If you’re thinking about adding a battery to your solar system, it’s best to act sooner rather than later.
Why This Is a Big Deal
Australia already leads the world in rooftop solar, with over 30% of homes having panels. This battery rebate is the next big step in helping households use more of their own solar energy and rely less on the grid.
With cheaper batteries, you can:
Store excess solar energy for use at night.
Protect yourself against rising electricity prices.
Help Australia move faster toward 100% renewable energy.
Thinking About Adding a Battery?
Get in touch with us today and we’ll:
Check if you’re eligible for the rebate.
Provide a free consult to find you the right solar battery solution.
Connect you with a certified installer.