If you’ve recently purchased a solar battery or are considering one, you’ve likely heard about Virtual Power Plants (VPPs). It sounds like a good deal. But before you say yes, stop and take a closer look.
At PSC Energy, we step cautiously around recommending VPPs to our customers. VPPs are not simple. Some work well and pay you a fair return. Others come with hidden rules that could cost you money or control of your battery. We’re here to offer a transparent perspective on VPPs.
In this article, you’ll learn about the following:
- What is a Virtual Power Plant and How Does It Work?
- What Are the Benefits of Joining a VPP?
- The Problems with VPPs You Need to Know About
- How to Protect Yourself from a Bad VPP
- A Look at Amber: An Alternative to VPPs
- Virtual Power Plant Incentive for NSW Explained
- Checklist: What to Ask Before You Join a VPP
- VPP Frequently Asked Questions
By the end, you will know what questions to ask, what red flags to look for, and how to decide if a VPP makes sense for you.
What is a Virtual Power Plant and How Does It Work?
A Virtual Power Plant, or VPP, is a network of solar batteries and solar systems. A company connects these systems together using a cloud-based software.
Their goal is to manage the network of batteries as a single, large energy source. Energy retailers and distributors like this because it helps support and balance the grid, reducing the likelihood of blackouts.
When you sign up for a VPP, you need to understand that your energy company can control how your battery charges or discharges.
For example, they might use your battery to send energy to the grid during peak demand. They might charge your battery during low-demand periods.
In return for handing over occasional control of your battery, you usually receive a payment.
- Some VPPs give sign-up bonuses.
- Others offer regular payments or higher feed-in tariffs for exports to the grid.
- Some promise lower energy bills.
- Some offer nothing unless your battery is used a certain way.
Not all VPPs work the same way. Some give you more control than others. Some will take over battery management almost completely. Others give you the final say or only act during rare events. You need to understand the exact rules before signing up.
If you’re interested in learning a bit more about VPPs, you might want to check out the following article titled, What is a Virtual Power Plant (VPP)?
What Are the Benefits of Joining a VPP?
Joining a VPP can help you get more value from your battery. It can also support the wider energy grid. But the real benefit depends on the offer and your expectations.
Can You Earn Extra Money by Signing Up for a VPP?
Many people join a VPP to earn extra income and shorten their system’s payback period.
- You might get paid for each kilowatt-hour (kWh) of energy your battery sends to the grid.
- Some VPPs offer a fixed monthly or quarterly payment.
- Others offer one-time sign-up bonuses.
The total amount is usually not huge. Many homeowners earn between $200 and $400 per year, sometimes more, sometimes less.
The payment depends on how often the VPP uses your battery and what they pay per kWh.
Do You Get Better Energy Prices with a VPP?
Some VPPs give you a higher feed-in tariff or offer discounts on your electricity bill. Others may provide discounts during off-peak times or during certain events.
Can You Use Your Battery More Efficiently with a VPP?
If your battery often sits full, a VPP can help put that stored power to use. Instead of wasting solar energy that your home doesn’t need, the VPP can send it to the grid when others do need it.
Can a VPP Help You Support the Grid?
When a lot of people join VPPs, it helps the grid remain stable. It also helps reduce the need for gas plants or coal power during peak times.
The Problems with VPPs You Need to Know About
VPPs can offer valuable benefits, but many come with significant drawbacks. If you are not careful, you could lose control of your battery, get locked into a bad energy plan, or pay more than you earn.
Here are the most common problems to watch for.
Can You Choose Your VPP?
VPPs are not available everywhere. In some parts of Australia, you may have no choice at all in who you can sign up with.
Even in states with more choices, like New South Wales, Queensland, Victoria, and South Australia, the options and benefits often depend on where you live. If you are outside a major city, you may not be able to join any VPP at all.
Can I Use Any Battery with a VPP?
Some VPPs only work with specific brands or models of batteries. Even if they support your battery, they may still reject your system.
This can happen if your battery is too small or if your solar system doesn’t meet their requirements. This means you could install a battery expecting to join a VPP and then find out you are not eligible.
Will You Lose Control of Your Battery?
When you join a VPP, you often give up complete control of your battery for a period of time. The VPP can charge or discharge your battery when it suits their needs, not yours.
Most VPPs will keep a backup reserve, so you’re not left with a flat battery during a blackout. But the amount of that reserve varies. Many we’ve seen often leave 20% of full battery capacity for outages.
This means that if a blackout occurs after your VPP has drained your battery, you may not have enough power left to run your home. If having backup power is your main reason for owning a battery, this is a significant issue.
Do You Need To Sign Up for a VPP with My Energy Retailer?
When you join a VPP, you also have to use a specific electricity retailer. You may lose the ability to shop around for better rates.
If a new retailer offers a better plan, you can’t switch unless you also leave the VPP. Some VPPs have long contracts or charge exit fees, which makes leaving costly.
Are There Any Terms or Conditions for a VPP?
Many of the biggest problems in VPPs hide in the fine print. Some conditions are hard to spot unless you already understand how batteries and billing systems work. If you do not read the full terms or ask the right questions, it is easy to miss the details.
Will a VPP Wear Out My Battery?
When a VPP uses your battery more often, it increases wear and tear. This could shorten your battery’s lifespan. But this issue is not as bad as it sounds. Batteries are made to be used. If you never discharge your battery, you are not getting full value from it.
Most batteries are designed to last many years, even with regular use. The warranted period is around ten years. And by the time you need a new one, prices will likely be much lower than they are today.
How Much Will You Receive from a VPP?
Most people don’t become wealthy by joining a VPP. The average annual payment is around $200 to $400. Some people make more. It depends on how your VPP works, how often they use your battery, and what they pay for it.
Some VPPs use complicated payment systems. They might offer sign-up bonuses, regular payments, rewards for not using grid power, or higher feed-in tariffs. Some even offer discounts on battery purchases, but these discounts may come off inflated prices.
Because of all these different payment types, it is hard to compare VPPs side by side. Some look generous at first, but may not be the best deal after you factor in hidden fees or battery use.
If you’re interested in learning a bit more about feed-in tariffs, you might want to check out the following article titled, Understanding Feed-In Tariffs and Their Limitations.
How to Protect Yourself from a Bad VPP
Joining a VPP is not a simple decision. The wrong one can cost you money or limit the usefulness of your battery. But there are steps you can take to protect yourself. These steps will help you understand the risks and make better choices.
Read the Terms and Conditions Carefully
Most of the problems with VPPs hide in the fine print. Before you sign up, read every section of the terms and conditions. Look for details about how payments work, when your battery will be used, and how much control the VPP has over your system.
Take notes while you read. If something is unclear, don’t guess; instead, clarify it. Ask for an explanation. Some VPPs use vague language that sounds positive but doesn’t give clear promises. If you can’t tell what they’re offering, that’s a red flag.
Ask Direct Questions
Talk to a VPP representative and ask them how their system will work with your battery. Ask these key questions:
- Will I stay in control of my battery?
- Can you charge my battery using grid electricity?
- Will I be paid every time you discharge energy?
- What happens if there’s a blackout?
- What happens if I want to leave the VPP?
They are required to give you accurate answers. If they promise something during the call or email, take note of it.
Look for Real Reviews
Try to find reviews from people already using the VPP you are considering. Reviews from people with similar battery setups can be especially helpful.
If many people report losing money or being unable to control their battery, take it as a warning. If several users report the same issue, that problem is likely real.
Choose VPPs With Flexibility
Avoid VPPs that lock you into long-term contracts or charge fees for early termination. Some VPPs allow you to leave at any time without penalty. These are safer because you can walk away if the service stops being useful.
Also, be careful with offers that seem too good to be true. Some offer substantial sign-up bonuses but have strict rules that make the system difficult to use in the long run.
If you’re interested in learning how you can turn your solar battery into a source of passive income, you might want to check out the following article titled, Variable Feed-in Rates and VPPs in NSW.
A Look at Amber: An Alternative to VPPs
Amber is a different kind of energy provider. It is not a traditional VPP, but it can offer some of the same benefits without taking control of your battery.
If you want to keep control while still earning from your battery, Amber might be a better fit.
How Amber Works
Amber gives you direct access to wholesale electricity prices. These prices change every 30 minutes. When the price is low or negative, you can charge your battery. When the price is high, you can choose to export energy to the grid for a profit. You make those decisions yourself or through automation tools you set up.
Amber does not control your battery. You keep complete control and can decide how and when to use your stored energy. This means you never have to worry about your battery being drained before a blackout or being charged with grid electricity at the wrong time.
What Makes Amber Different
Amber is not a VPP in the usual sense. It provides access to the retail energy market, enabling your battery to function as a micro energy retailer.
It doesn’t drain your battery. It does not group you with other users to act like a power plant. But because the NSW government counts Amber as a VPP for incentive purposes, you can still get VPP-related rebates if you use it.
With Amber, you don’t receive a flat payment or sign-up bonus. Instead, you earn by selling power when prices are high.
This makes your earnings less predictable but possibly higher during peak events. Sometimes, energy payments can reach $19 per kWh.
You also avoid hidden fees or control problems because you stay in charge.
Who Is Amber Good For?
Amber may suit you if:
- You want complete control over your battery.
- You are comfortable using apps or automation to manage energy use.
- You want to respond to real market prices instead of a fixed VPP plan.
- You want a flexible setup that avoids contracts and exit fees.
Amber might not be the best choice if you want fixed payments, don’t want to monitor prices, or prefer a set-and-forget system.
However, if you prefer having control and don’t mind a more hands-on approach, it can be a smart way to use your battery on your own terms.
If you’re interested in learning a bit more about Amber, you might want to check out the following article titled, Amber Energy Australia Explained: A Smart Way to Save (and Earn) with Solar Panels and Battery.
Virtual Power Plant Incentive for NSW Explained
Starting 1 July 2025, the NSW Government is increasing its Virtual Power Plant (VPP) incentive.
If you connect a battery to an approved VPP, you can receive a payment based on the size of your battery. Before July, the maximum payment was $800 for a 27 kWh battery. From 1 July, the maximum will rise to $1,500 for that same battery.
This is not a flat-rate rebate, though it behaves like one. The payment depends on your battery’s usable storage capacity. For example:
- Up to $550 for a 10 kWh battery
- Up to $1,500 for a 27 kWh battery
To qualify for the NSW VPP incentive, you must meet three conditions:
- You have solar panels already installed.
- Your battery has between 2 and 28 kWh of usable storage.
- You sign up with a VPP provider approved under the NSW scheme.
You must also be connected to the electricity grid. Off-grid systems are not eligible because VPPs rely on grid access.
Can You Combine It with the Federal Rebate?
Yes. You can combine the VPP incentive with the federal battery rebate from the Australian Government’s Cheaper Home Batteries Program. That program reduces the upfront cost of buying a new battery by about a third. Once your battery is installed, you can still apply for the NSW incentive by connecting to an eligible VPP.
Other Important Rules
- You can only claim this rebate once per home.
- If you claimed the rebate between November 1, 2024, and June 30, 2025, you cannot claim the higher payment starting in July. However, your VPP provider might offer a different incentive to keep you connected.
If you are unsure whether your battery or VPP provider qualifies, ask your installer before signing any contracts.
If you’re interested in learning a bit more about the VPP portion of the battery rebate, you might want to check out the following article titled, NSW Battery VPP Rebate Explained: What You Need to Know.
Checklist: What to Ask Before You Join a VPP
Questions to Ask
- How much control will I keep over my battery?
- Will the VPP charge my battery using grid electricity?
- What will I get paid, and how is it calculated?
- Are there any exit fees or lock-in contracts?
- How much backup power will be kept in my battery for blackouts?
- How many times per year will the VPP use my battery?
- What happens if I want to switch electricity retailers?
- Is the offer eligible for any state or federal rebates?
- Is my battery model fully compatible with your system?
- Can I review or adjust settings later if my needs change?
Red Flags to Watch For
- Vague or confusing payment terms
- No clear limit on grid charging
- Long contracts with high exit fees
- Lack of detail on battery reserve levels
- Promises that sound too good without proof
- No option to stay in control of your battery
- Retailer lock-in without better rates or benefits
- Pressure to sign up quickly without full documentation
If you’re interested in learning a bit more about expanding your energy system, you might want to check out the following article titled, Expanding Your Solar Panel System with Batteries and Add-Ons.
Final Verdict on VPPs
Virtual Power Plants can offer value, but they are not always a good deal. Some VPPs pay you a little money in return for giving up control. Others tie you to one retailer or charge your battery from the grid at your expense. If you do not read the fine print, you may end up worse off.
That does not mean all VPPs are bad. Some work well and pay fairly. They allow you to maintain some control and avoid significant risks. If you understand the rules and know what to look for, you may find one that suits your system and goals.
No matter what you choose, do your homework. Read the terms. Ask questions. Compare offers. The best VPP is the one that gives clear value, keeps your system useful, and never leaves you with regret. At PSC Energy, we provide guidance and a transparent perspective so that you won’t be left in the dark with a VPP.
If you’re interested in learning a bit more about how to save with solar, you might want to check out the following article titled, Self-Consumption: How to Increase Solar Energy Use.
VPP Frequently Asked Questions
What is a Virtual Power Plant (VPP)?
A VPP is a group of solar and battery systems controlled by an energy retailer using cloud-based software. It uses your battery to send power to the grid or store it based on market needs.
Are VPPs worth it in Australia?
Some VPPs are worth it, but many are not. You need to compare payments, contract terms, and the level of control you give up. Most people save around $200 to $400 per year, but the amount varies depending on the offer.
What are the main problems with VPPs?
The biggest problems include losing control of your energy bill, low payments, hidden fees, and being locked into one energy retailer.
What is the best VPP in Australia?
There is no single best VPP. The best option depends on your location, battery type, and energy use. Look for VPPs with fair terms, good reviews, and no long contracts.
Are there any VPPs in NSW?
Yes. NSW has several VPPs available, but they vary by region and battery type. Always check if your system is supported and read the terms before signing up.
Is Amber a good alternative to a VPP?
Yes. Amber gives you access to real-time market prices without taking control of your battery. You stay in charge and can earn money by exporting energy during peak times.
Can I still use my battery during a blackout if I join a VPP?
It depends on the VPP. Some leave a backup reserve in your battery. Others might drain your battery before a blackout hits, leaving you with no power.
Do I have to stay with one energy retailer if I join a VPP?
Yes. Most VPPs lock you into their partner energy retailer. If you want to switch, you may need to leave the VPP and lose your benefits.
How much money can I make from a VPP?
Most people earn about $200 to $400 per year. The exact amount depends on how often your battery is used and how the VPP pays you.
What should I look for in a good VPP?
Look for clear terms, fair payments, battery control options, and flexible exit rules. Avoid long contracts and hidden fees.
