Australian households with solar and batteries could be missing out on significant savings from Virtual Power Plants, as energy companies struggle to earn the trust of consumers.
The Why households adopt batteries and why many aren’t joining a Virtual Power Plant report from Energy Consumers Australia examines why uptake of this key technology is so low and calls for a range of recommendations including a consumer duty to establish consumer trust in energy companies.
Related article: Energy Consumers wants ‘consumer duty’ introduced
“Virtual Power Plants could be a major part of our energy future, but we are not seeing strong uptake” Energy Consumers Australia acting General Manager, Advocacy and Policy Ashley Bradshaw says.
“This won’t happen unless energy companies establish trust and give people a clear value proposition. A consumer duty that gives consumers confidence that energy providers are required to use batteries in the consumers’ best interests is just one way we can give Australians more confidence to participate in a Virtual Power Plant. Significant savings and trust are on the line.”
Virtual Power Plants coordinate solar and batteries from households to operate together like a single power station. They offer savings to households, support grid stability, reduce peak demand, and offer more flexibility. Despite strong benefits to households, uptake is alarmingly low, with ECA’s research finding that only 4% to 10% of battery owners participate in a Virtual Power Plant.
According to the report, a quarter of household battery owners who have not joined a Virtual Power Plant say they don’t trust energy companies to manage their battery and over one third say they don’t know enough about how Virtual Power Plants work.
“There’s a number of reasons why Australians have struggled to engage with Virtual Power Plants,” Bradshaw says.
Related article: Plico partners with Alinta to bring VPP offer to NSW
“The ACCC estimates that households could be saving up to $1000 a year if they participated in a Virtual Power Plant, but those savings are being left on the table if Australians aren’t aware of, don’t trust or don’t understand what Virtual Power Plants do.
“Our research makes the path forward clear—establish genuine consumer trust in energy companies. Energy Ministers must progress an economy-wide consumer duty to ensure fairer outcomes for consumers and maximise the benefits of the solar and battery revolution.”
