Fewer than one in four Australian households installing batteries under a $7.2 billion Commonwealth subsidy scheme are joining virtual power plants, even though regulators say the arrangement could lower energy costs and strengthen the grid. It's a puzzling gap between what experts say works and what people actually choose to do.
Chris Richardson's Frankston home in Melbourne's south sits at the center of this contradiction. Solar panels collect sunshine and a battery stores that power for evening use. He's handed control of his battery to an energy company managing the sale of electricity back to the grid. The result? His power bill has nearly disappeared, and his gas costs have halved. Yet Richardson initially bristled at the arrangement. "Initially when I saw that they were taking electricity out of my battery at night I was a bit 'Oh, they can't do this. This is not fair,'" he said. "But the reality was it made no difference. I was still running my house for free."
Richardson's experience reveals a striking economic reality that regulators say most households don't fully grasp. The Australian Competition and Consumer Commission found that customers on a virtual power plant were, on average, significantly better off than those going it alone. Anna Brakey, the ACCC's deputy commissioner, laid out the numbers: regular battery customers save 20 to 50 per cent compared to standard electricity rates depending on their state. Those who participate in a virtual power plant product? Around 60 per cent savings.
The Scale of Untapped Potential
Australia has built something globally unusual. More than 4 million homes have solar panels. Almost half a million now have batteries. Yolande Strengers from the Monash Energy Institute calls this distributed storage capacity "a really unique situation for Australia, for the world." The coordination challenge, though, is immense. "If we can be treating that as a coordinated resource … discharging that power when the system really needs it, and if we can also be charging those batteries when we've got abundant solar in the system, we can improve the efficiency of the overall system," Strengers said.
The stakes are concrete. Widespread coordination through virtual power plants could avoid billions of dollars in grid upgrades. It would also benefit customers who can't afford solar panels and batteries themselves, spreading the gains more equitably across the electricity system. But achieving that coordination isn't guaranteed. "For many people it's also about wanting greater independence and resilience in the energy system and wanting to take back control," Strengers said.
The Challenge of Control
This desire for autonomy is driving interest in alternative models. Simon Hackett runs Energy Autopilot, a company launching later this year that promises to cut out the middleman and give consumers direct access to the electricity market. Hackett argues that traditional virtual power plants rest on an outdated assumption: that batteries must be controlled by one or a few large players to help the grid. "There are two downsides of that," he said. "One is you don't have control over those decisions; someone else does, and you don't have control over the profits from that exercise; someone else does."
As battery costs fall and technology sophistication rises, Hackett contends households now have the ability to trade directly. "That combination turns you into a genuine power plant, that can buy and sell power just like the big boys used to," he said. "That's an enormous change, and it's an ability to do stuff for ourselves that's just never existed."
But this decentralized vision carries risks. The rise of dynamic retailers offering direct access to spot prices exposes households to market volatility they've never faced before. Prices swing high and low unpredictably. "You might make a lot more money. You might actually wind up paying a lot more money," Hackett acknowledged. Traditional energy retailers absorb that risk for customers. Direct market access shifts it entirely onto households.
Richardson remains unbothered by the trade-offs in his arrangement. He's comfortable ceding some control to capture the savings. "I love it," he said, though he's given up trying to explain the concept to skeptical friends. "[When] I tell people at work, they give me this look like I'm wanting to join up with a Tupperware club or something like that."
Why This Matters:
Australia stands at a critical juncture in how it manages household energy resources. The data shows that virtual power plants deliver measurable financial benefits—60 per cent savings versus 20 to 50 per cent for battery-only households—yet most people aren't choosing them. This gap between what works economically and what people actually do reflects a deeper tension: households want both savings and control, and they're skeptical of surrendering autonomy to large energy companies, even when the math favors it. The question of whether Australia can coordinate 4 million solar systems and half a million batteries into an efficient grid resource will shape electricity costs, grid stability, and the need for expensive infrastructure spending for years to come. If coordination fails, the benefits flow only to those who can afford batteries. If it succeeds through either traditional virtual power plants or new decentralized models, the gains could extend to renters and lower-income households currently locked out of solar economics entirely.