Australia recently clocked 400,000 installations under the Cheaper Home Batteries scheme, equating to 11.2 gigawatt-hours of storage introduced since the program was announced in July 2025.
“(This) means there is less gas and coal being used in the nighttime, which is reducing prices for everyone, not just those Australians who have put in Cheaper Home Batteries,” Federal Minister for Climate Change and Energy Chris Bowen said.
While these numbers are significant and represent the readiness of Australians to adopt renewable energy solutions, how these batteries are actively supporting the grid is another question.
This begs the question as to how these home batteries are translating into virtual power plants (VPPs). While home batteries under the Cheaper Home Batteries scheme must be VPP-compatible, it’s optional for participating consumers to join a VPP.
A VPP sees home batteries connect to a larger network of distributed energy resources, enabling them to return supplies back to the grid, with software enabling the connection and control of this system.
By joining a VPP, households can benefit financially through bill credits and higher feed-in tariffs, while also helping lower electricity prices for their neighbours. VPPs also enable consumers to better utilise their renewable energy systems.
Energy Consumers Australia executive manager – advocacy and policy Lotte Wolff said there has been “lower uptake of VPPs than governments were expecting”, with an ECA survey from October 2025 indicating 10 per cent of Australian battery owners were in a VPP.
“Some of that is motivated by a lack of clear value proposition for consumers, for the types of products that are available in the retail market alongside batteries,” they told Energy.
“It’s definitely an area we need to focus on.”
CSIRO chief energy economist Paul Graham said households with batteries not involved in a VPP scheme are just “controlling their battery to minimise their bill”.
“If you join a VPP scheme, it means you’ve said, ‘I’m going to let the grid operate my batteries so that it coordinates with other grid-level resources’,” he told Energy.
South Australia has set the example for VPP adoption in Australia, creating Australia’s largest VPP network in 2023 after launching the initiative in 2018.
This has seen the interconnection of up to 50,000 Tesla Powerwall home battery systems across the state, with a portion of these installed in public housing units overseen by the SA Housing Authority (SAHA).
The NSW Government is offering VPP incentives through upfront payments, with the larger the battery (up to 28 kilowatt-hours) the larger the payment.
A range of retailers are offering their own VPP deals, including AGL, ENGIE and Origin Energy.
The Cheaper Home Batteries scheme has created a frenzy of adoption; the next step for the Federal Government is exploring how to maximise this fleet for the good of the wider grid. This is where VPPs can play an important role.
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