New rooftop solar systems are worth a lot less than they used to be in California, following the state’s dramatic changes in net-metering policy. Even batteries added to those solar systems to store power when the sun is shining and feed energy back after the sun goes down — a primary goal of the state’s new rooftop solar rules — are worth less after recent decisions from state regulators.
But residents still have one clear pathway to making solar and battery installations pay off. They can join a “virtual power plant.”
Virtual power plants, or VPPs, use software to combine the power of hundreds or thousands of small-scale solar and battery systems to mimic traditional power plants. VPPs have been expanding in California over the past few years, thanks to a funding boost from a series of state laws and regulator decisions enacted to forestall summer evening power shortages like those that forced small-scale rolling blackouts in August 2020 and nearly caused more in September 2022.
From a power-grid perspective, the vision is to have VPPs help replace the fossil gas “peaker” plants currently used to meet surging electricity demand on hot summer evenings. Solar advocates also see VPP programs as a way to boost sales of home solar systems in the state, which have slowed to a crawl due to regulators’ decision to sharply cut compensation from net metering.
About 100,000 solar-charged batteries are already installed at California homes and businesses, adding up to nearly 1.7 gigawatts of capacity — but only a fraction of that is being tapped for VPPs today.