Virtual Power Plants and Battery Warranties
TL:DR: Battery manufacturers take different approaches to warranties. This matters when deciding how much power to export to the grid and what minimum price makes it worthwhile.
Virtual Power Plants and Your Battery
In our previous blog, we discussed how Virtual Power Plants (VPPs) help the electricity grid by smoothing out peaks and troughs in demand. For customers, VPPs also provide an opportunity to earn extra income by selling electricity when wholesale prices are high.
But what about your battery warranty? Exporting electricity to the grid increases battery use, which can shorten the warranty period depending on how it’s structured. Let’s explore what that means for different manufacturers.
How Battery Warranties Work
Most battery warranties are based on two factors:
Time (e.g., 10 years)
Energy throughput (total amount of energy cycled through the battery)
The warranty expires when either limit is reached. Here are some examples:
Sigenergy 8kWh: 10 years, 70% of Day 1 capacity, or 23.77 MWh throughput (whichever comes first).
BYD HVM 8.28 kWh: 10 years, 60% of Day 1 capacity, or 25.62 MWh throughput (whichever comes first).
Sungrow SBR 9.2 kWh: 10 years or 4,000 cycles, with 70% capacity retention.
Other brands, such as Tesla, offer a 10-year warranty with 70% retention, but only if the system remains connected to the internet most of the time. If it isn’t, the warranty may be cut to just four years—we’ve seen this happen with another brand as well.
In short: most warranties guarantee around 70% capacity after 10 years, but the fine print (throughput limits, internet connectivity, cycle counts) matters.
The Trade-Off: Selling to the Grid vs Warranty
The Federal Battery Rebate scheme was designed to encourage homeowners to sell electricity into VPPs. But here’s the catch:
Exporting electricity adds to your battery’s energy throughput, which can shorten its warranty.
To offset this, you need to ensure the price you’re paid makes it worthwhile.
Let’s run the numbers.
A Simple Example
Using the Sigenergy 8kWh:
Total throughput: 23.77 MWh
Battery cost: $4,995
Storage cost = $0.21/kWh
If charging costs 5c/kWh, you’d need to sell electricity for more than 26c/kWh just to break even. Selling above this price is where you start to see real value.
Wholesale prices often exceed this at night, so in many cases you wouldn’t be losing out.
When It’s Worthwhile
Two main factors determine profitability:
Input cost – the price of electricity you put into the battery.
Export price – what you’re paid when selling back to the grid.
Profitability also depends on location. For example, Queensland wholesale prices are often higher than in Tasmania.
So, when are the best times? Typically:
Hot days when air conditioners are running at full tilt.
Cooler months, when heating demand spikes.
In fact, in Q2 this year there were 66 separate events where wholesale prices spiked above $5.00/kWh for 30 minutes. Selling at these times is extremely profitable.
Battery Longevity and Best Practices
Another key question: Does battery life depend on how you charge and discharge it?
Yes.
Lithium batteries can usually discharge down to 10% SoC (State of Charge) and recharge to 100%, delivering 3,000–6,000 cycles.
However, keeping the SoC within a narrower range dramatically increases lifespan. For example:
80% to 20% SoC = longer life
70% to 30% SoC = even longer
Other factors also help:
Keeping the battery cool
Avoiding high charge/discharge currents
Rule of thumb:
If you regularly sell around 25–30% of your battery’s capacity while keeping it cool, you won’t see a meaningful reduction in long-term performance compared to not exporting at all.
Research by Jeff Dahn at Dalhousie University confirms this in EV battery testing. (For the technical details, watch from 2:22 to 13:00 in his Video.)
Key Takeaways
Selling electricity via a VPP increases throughput, which can shorten your warranty.
Make sure the price you’re paid justifies the trade-off.
Manage charge/discharge levels and temperature to extend your battery’s life.
Done right, participating in a VPP should have minimal impact on your battery’s long-term performance.
Final Thought
Think of it like this: using your battery for VPPs is similar to using a new car (still under warranty) for Uber or DoorDash. It racks up kilometres faster and eats into the warranty allowance. But if you’re paid enough, and you treat the car well, the extra use won’t matter much.
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.
How Virtual Power Plants (VPP) Work
Australia’s energy grid faces a lunchtime glut and a dinner-time crunch — much like McDonald’s having too many burgers at midday and not enough in the evening. Virtual Power Plants (VPPs) offer a clever fix: by connecting home batteries to the grid, you can sell stored solar power when it’s most valuable, help balance supply and demand, and even turn a profit. In this blog, we break down how VPPs work, why they’re more useful in some states than others, and how you can take control of when and for how much you sell your electricity.
TLDR: VPP’s are growing because of the abundance of renewable energy. They are helping to stabilise the grid and smooth out the peaks and troughs.
McDonald’s Consumption v Energy Consumption
During the day, as we go about our lives, we switch on the kettle for a hot drink or the heater to stay warm. The electricity is just there — ready, instant, and unquestioned.
Imagine if ordering a burger on the McDonald’s app meant it appeared in your hands instantly. That’s how the grid works: it has to deliver exactly what’s needed, at the precise moment it’s needed.
Now, let’s stretch that McDonald’s analogy a bit further. Imagine their burger supply chain worked differently. You’d still buy burgers from your local McDonald’s, but none would be cooked there. Instead, every Big Mac in the country would be prepared in one giant factory out in the countryside. As soon as they were ready, they’d be transported instantly to restaurants nationwide.
In this analogy, the giant factory is the power station, the transport network is the poles and wires, and the local McDonald’s restaurants are the substations in your area.
In this system, the factory adjusts its output based on demand — fewer burgers at 2 a.m., more during lunchtime rush. But there are two big constraints:
They can’t stop production entirely (except for scheduled maintenance).
They can’t speed up or slow down production instantly. The factory prefers smooth, steady output, but customers are unpredictable and eat in bursts, not in a constant flow.
For decades, this model worked just fine. But now imagine people start realising they can make their own burgers at home — and not only that, they often have extras to sell, especially at lunchtime. Suddenly, McDonald’s is competing with thousands of home kitchens. The problem? The big factory can’t just shut down for a few hours; it’s still churning out burgers.
That’s exactly what’s happening in Australia’s electricity market. At midday, when solar panels are producing more energy than people can use, there’s an oversupply. In Queensland, for example, wholesale electricity prices often drop below zero in the middle of the day. That means you can literally be paid to use electricity — the energy equivalent of McDonald’s paying you to take a Big Mac off their hands at 12:30 p.m., about 80% of the time.
Energy Demand
The electricity network has the opposite problem between 5:30 p.m. and 7:00 p.m. Everyone wants to eat then, and the grid faces a new challenge: the transport network is struggling to keep up with demand. There are only so many trucks to deliver the food, and they are going flat out. So, what’s the solution? Lower demand at this time by encouraging people to not only keep producing their own food but also sell some of it at night to help the grid. This is where Virtual Power Plants (VPPs) come in.
How Virtual Power Plants Help Energy Demand
By connecting your battery system to the grid and selling electricity at night, you help smooth out the grid while also making some extra money.
It should be noted, however, that there are some variables to this approach:
Not all batteries connected to the grid will be able to supply power when needed.
Different batteries will have different amounts of stored energy available.
Battery resources will not be deployed evenly across the country.
On that last point, a VPP-connected battery system will not be as useful in Tasmania as it is in Queensland. The wholesale market shows that electricity prices in Queensland are often negative from 11:00 a.m. to 2:00 p.m., but can rise to as much as 50c/kWh between 5:30 p.m. and 7:00 p.m. This variation is far less in Tasmania, where most electricity comes from hydro — essentially giving the state a very large battery system already.
Controlling your Solar Batteries in a Virtual Power Plant
So, while the system isn’t perfect, it will help. The question is: who benefits more — the grid, or the person connecting their battery to the VPP and getting paid? Because electricity prices are market-driven, grid operators decide when they need electricity and how much they’re willing to pay for it. The pricing is dynamic, and battery owners can set the price at which they are willing to sell.
It’s a bit like selling items on Facebook Marketplace: you set a price, receive various offers, and eventually someone might offer full price — and you sell. You also decide how much stock (energy) you want to sell at any given time.
With a VPP, you control both the amount of electricity you sell and the price. Mobile apps make it simple to set up and manage. We now have a convergence of technologies that makes the process straightforward — and the good news is that people are already doing this. There are active forums where participants share experiences and advice on balancing electricity sales with keeping enough stored for personal use.
Another point worth noting is that you don’t have to wait for your solar system to recharge your battery. You could sell electricity at night during peak times and then buy it back at 11:00 p.m. when prices drop. There are several videos online explaining how this works — here’s one that discusses using Amber Electric, a VPP provider.
Next week, we’ll discuss whether participating in a VPP affects your battery warranty.
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.