How does a virtual power plant work? Instead of one big generator, a utility or aggregator links thousands of small home batteries and calls on them together when the grid is strained. A real example just played out in Puerto Rico, where, according to Electrek, Sunrun’s network was tapped for 18 straight days in October.
What is a virtual power plant, and how does a virtual power plant work?
A virtual power plant, or VPP, is software that coordinates many distributed energy devices, usually home batteries, so they act like one power station. Each battery stays in a customer’s home. When the grid needs help, the aggregator signals the batteries to send stored power out, and the combined output is delivered as a single resource. That description is a general explanation, and the details vary by program.
The Sunrun virtual power plant in Puerto Rico
Electrek reports that Sunrun’s Puerto Rico VPP now has nearly 70,000 batteries and frequently delivers 45 megawatts for four hours at a time. Participation more than doubled to over 60,000 customers. The batteries have been dispatched more than 60 times since April, including daily deployments beginning October 13 during unusually hot weather.
Sunrun says it is the largest aggregator in Puerto Rico’s Customer Battery Energy Sharing (CBES) program. Its network grew from around 4,000 customers in 2024 to more than 30,000 in 2025, according to the same article. The brief behind this post says the grid operator, LUMA, made the calls to avoid rolling blackouts; I could not confirm that attribution in the part of the article I could read, so treat it as the brief’s claim.
Why Puerto Rico needs it
Electrek notes that Puerto Ricans pay some of the highest electricity prices in the US, with residential power averaging 26.36 cents per kilowatt-hour in August, against a US average of 18.16 cents, per the US Energy Information Administration. Reliability remains a problem despite those prices. Batteries already installed in homes are a faster way to add capacity than building a new plant, which is the logic behind the program.
How a home battery virtual power plant program works for you
Terms differ by program, and the Electrek excerpt I read does not spell out customer payments. In general, a home battery virtual power plant program asks you to allow the aggregator to discharge part of your battery during events. In exchange you may receive a bill credit or payment, though I cannot say what any given program pays. Questions worth asking before you enrol:
- How much of the battery can be used per event, and for how many hours?
- Can you set a minimum backup reserve for outages?
- How often can events be called, and are there seasonal limits?
- What do you get paid, and how is that calculated?
- Can you leave the program, and what happens to your warranty?
The trade-off: backup power versus grid support
Events happen on the hottest days, which is also when outages are most likely. The Puerto Rico case shows 18 days in a row, so a battery used daily for the grid may start the evening with less stored energy. A sensible habit is to keep an emergency reserve during active events. Check whether your program lets you set one, and whether it holds during a declared event. My view: a reserve you cannot guarantee is a weaker backup, so read the terms.
What this means for EV owners
A VPP is built around stationary batteries, not cars, but the idea overlaps with home charging. If you charge an EV at home, your charging time and your battery’s availability both draw on the same circuit and tariff. Some utilities reward charging at off-peak hours. Programs that use EVs themselves require bidirectional equipment, and this article does not cover any such program. Before adding a battery and a Level 2 charger, have an electrician check your panel capacity so the two do not compete.
Analysis: a model to watch
This is my opinion. Puerto Rico is an unusual case, with high prices and a fragile grid, so the results may not transfer neatly to the mainland US. Still, 70,000 batteries delivering 45 MW is a useful proof that scattered home storage can handle a sustained heat wave, at least in one place.
Sources
Photo: Mike Mozart / Wikimedia Commons, CC BY 2.0 (Sunrun Solar truck, not a battery install). Source page.