Electric Vehicles (EVs) and batteries are driving the surge of Virtual Power Plants (VPPs) in the United States, projected to reach a capacity of 37.5 Gigawatts by 2025.
In the world of renewable energy, Virtual Power Plants (VPPs) are making waves, with a current capacity of 37.5 gigawatts of behind-the-meter flexible energy online. This figure represents a significant stride in the decentralisation of energy production.
However, specific details about companies that have invested more than 100 megawatts in VPPs over the past 12 months, or those that have increased their deployment by at least 30% compared to the previous year, remain elusive. The top 25 VPP offtakers, each procuring more than 100 megawatts this year, are leading the charge in this burgeoning market.
The growth of VPPs is not only reshaping the energy landscape but also fostering the emergence of a new business model: the independent distributed power producer. This model, which connects small energy systems and smart devices into a single network managed by an energy company or utility, is gaining traction thanks to its potential for scalability and efficiency.
One such example is Green Mountain Power's Lease Energy Storage program in Vermont, which has seen rapid growth and is considered a standout VPP program. However, concerns have been raised about the model's potential to limit access of private capital and aggregators from the Distributed Energy Resource (DER) market.
Wholesale market experts, including Hertz-Shargel, believe that the Federal Energy Regulatory Commission (FERC) Order 2222, designed to improve market access, was a missed opportunity and may not significantly impact the market.
The shift towards renewable energy is further encouraged by the impending end of the 30% federal solar tax credit this year, encouraging solar installation before its expiration.
In the midst of this growth, utility program caps, capacity accreditation reforms, and market barriers have prevented capacity from growing as fast as market activity, according to Wood Mackenzie. California, Texas, New York, and Massachusetts are the leading states in VPP deployments, accounting for 37% of the total.
Battery storage and Electric Vehicles (EVs) now account for 61% of VPP deployments, surpassing those that include smart thermostats. For individuals looking to tap into this market, services like EnergySage offer a free platform to find trusted, reliable solar installers offering competitive pricing. With hundreds of pre-vetted solar installers competing for business, savings of 20-30% compared to going it alone are possible.
As the VPP market continues to evolve, it is clear that it presents both opportunities and challenges. Stay tuned for more updates on this exciting development in the energy sector.
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