Aug 24, 2025
Can Virtual Power Plants Save Rooftop Solar?
Rooftop solar has had a good run over the last 20 years or so. But it looks like that run is coming to an end. Between disappearing utility company incentives, a litany of industry bankruptcies, and the likely end of all federal tax credits, rooftop solar looks to be in trouble. Could the industry's salvation lie in virtual power plants (VPPs)?
It is an interesting concept and one that many in the rooftop solar industry believe is worth looking into. VPPs have already proven their worth on a small scale. With additional investments and a more intentional approach, some believe that VPPs could not only keep rooftop solar alive but also support a grid straining to keep up with demand.
The VPP Concept
If you are not familiar with virtual power plants, the concept is pretty simple in principle. VPPs are more systems than power generation facilities. They are coordinating systems that aggregate and distribute energy. Where does the energy come from?
It is aggregated from rooftop solder panels, home batteries, industrial equipment, wind turbines, etc. So instead of a central power plant producing all the energy needed for a particular region, a VPP system aggregates excess power generated by a variety of devices and then delivers it back to the grid at peak times. Rooftop solar and wind turbines produce the lion's share of electricity in a typical VPP.
One of the key issues with rooftop solar right now is storage capacity. Excess power is generated throughout the day. But because of a lack of storage, it gets put back into the grid right away. Yet the same system doesn't generate power when the sun goes down. So the home or business connected to that system draws power from the grid.
Smart Network and Control
Sending excess electricity back into the grid at non-peak times does little to help when the regional grid is stressed to the limit. Grids need the excess electricity at peak times. Therefore, the VPP concept relies on smart networks in control to ensure that aggregated power is delivered to the grid when it is most critically needed.
Advanced software and communication technologies connect the various devices within a VPP. Energy production and storage data are constantly being shared across the system. Meanwhile, the grid is also being monitored. When the grid needs more and the VPP has it, excess energy moves from the VPP into the grid.
Already Proven to Work
VPPs are no longer theoretical. They have been used in isolated instances over the last 5-10 years. In that time, they have proven themselves. Perhaps the most impressive example is Puerto Rico, where consumers have been installing rooftop solar at a pretty rapid pace since 2017's Hurricane Maria.
Maria decimated the island's grid. Eight years later, it still isn't performing up to standard. Consumers, tired of waiting on LUMA (Puerto Rico's utility) to make things right, have turned to solar panels.
LUMA has taken notice. So much so that they recently explained in a post on their website how rooftop solar more than made up for a generation shortfall of nearly 50 MW. The utility credits rooftop solar and a robust VPP for preventing rolling blackouts across the island.
Batteries Are the Key
VPPs have the potential to make a big dent in the current energy crunch. But batteries are the key. We have the software and monitoring systems. Now we need an ample supply of storage capacity.
Could VPPs be the future of rooftop solar? They just might be. If we can make it work, why not?
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