Quick Answer
At Battery IQ, we explain VPPs like this: a Virtual Power Plant coordinates thousands of home batteries to act as one power station. You can earn $80-$600/year from traditional VPPs, or up to $1,600/year with Amber Electric's wholesale model. The federal rebate requires your battery be VPP-capable, but joining a VPP is optional.
What Is a Virtual Power Plant?
A Virtual Power Plant (VPP) is a network of distributed energy resources - like home batteries, solar panels, and smart appliances - that are coordinated to operate as a single power plant. Instead of one massive coal or gas plant, a VPP aggregates thousands of small energy assets across homes and businesses.
Think of it Like This
Your home battery is like a single musician. A VPP is the orchestra conductor that coordinates thousands of musicians (batteries) to play together when the grid needs support.
In Australia, VPPs are becoming increasingly important as we transition to renewable energy. They help balance the grid during peak demand periods when traditional power plants struggle to keep up.
How Do VPPs Work?
When you join a VPP program, your battery can be remotely controlled by the VPP operator during specific events:
- Grid stress event detected - The grid operator (AEMO) identifies high demand or low supply
- VPP operator notified - Your VPP provider receives a signal to dispatch energy
- Your battery responds - Your battery automatically discharges to support the grid
- You get paid - You receive payment for the energy and grid services provided
What You Control
Most VPP programs let you set preferences:
- Minimum battery reserve (e.g., always keep 20% for backup)
- Opt-out of specific events
- Override during outages
What Is the Difference Between VPP-Capable and VPP Required?
Key Point for Federal Rebate
Your battery must be VPP-capable to qualify for the federal rebate. You are NOT required to actually join a VPP program.
What "VPP-Capable" Means
A VPP-capable battery has the technical ability to:
- Receive remote control signals via internet connection
- Respond to dispatch commands automatically
- Report energy flows to a central system
What "VPP Required" Would Mean
If VPP participation were required (it's not), you would have to:
- Sign up to a specific VPP program
- Allow your battery to be controlled during events
- Maintain active VPP enrollment
The federal rebate only requires capability - the option to participate. Whether you actually join a VPP is entirely your choice.
What Are the VPP Requirements for the Federal Battery Rebate?
The Cheaper Home Batteries Program requires VPP-capability for good reason: it future-proofs Australia's grid.
Why the Government Included This
As Australia adds more renewable energy, we need flexible demand response. By ensuring all rebated batteries are VPP-capable, the government creates the potential for coordinated grid support - even if most homeowners never opt in.
How to Verify VPP-Capability
Most modern batteries from reputable manufacturers are VPP-capable. Your installer should confirm this, but look for:
- Internet connectivity (WiFi or Ethernet)
- Manufacturer VPP partnerships (Tesla, Sungrow, BYD, etc.)
- Clean Energy Council approved product listing
Which Australian VPP Programs Are Available?
Here are the major VPP programs available in Australia:
Tesla Energy Plan
Available for Powerwall owners. Offers one of the most generous feed-in rates plus VPP credits.
States: SA, VIC, NSW, QLD, ACT
AGL Virtual Power Plant
One of Australia's largest VPPs. Works with multiple battery brands including Tesla, LG, and Sungrow.
States: SA, VIC, NSW, QLD
Origin Energy Spike
Pays for energy discharged during grid events. Compatible with various battery systems.
States: SA, VIC, NSW, QLD
Simply Energy VPP
Offers credits for participating in demand response events.
States: SA, VIC
Reposit Power
Technology platform that works with multiple retailers. Known for "GridCredits" system.
States: All NEM states
4 Ways to Earn With Your Battery
VPPs are just one way to earn money from your battery. At Battery IQ, we help you understand all four types of battery arbitrage - storing energy when it's cheap and using or selling it when it's valuable.
Type 1: Solar Self-Consumption
EasiestYour battery charges from solar (free), then powers your home in the evening when you'd buy from the grid.
Control: 100% | Effort: Set and forget | Savings: $800-$1,500/year
Type 2: Off-Peak Grid Charging
ModerateCharge from grid during off-peak (15-20c/kWh or free on some plans), discharge during peak (35-55c/kWh). With free off-peak plans, power your whole home through winter at no cost.
Control: 100% | Effort: Setup once | Savings: $400-$2,000+/year (depends on usage & electrification)
Note: Grid-only batteries (no solar) are not eligible for the federal rebate. Most battery owners combine this strategy with Type 1 (solar self-consumption).
Type 3: Wholesale Export Arbitrage
AdvancedWith wholesale pricing (Amber Electric), export when prices spike ($1-6+/kWh during extreme events). You actively trade energy for profit.
Control: 100% | Effort: Active monitoring | Earnings: $500-$1,600+/year
Type 4: VPP Programs
Hands-OffEnroll in a VPP and the operator dispatches your battery during grid events. You receive fixed credits without managing anything.
Control: Limited | Effort: None | Earnings: $200-$600/year
You Can Combine Strategies
Most battery owners use Type 1 (solar) as their base, add Type 2 (off-peak) for winter, and choose between Type 3 (wholesale) or Type 4 (VPP) for exports. At Battery IQ, we help you navigate these options - and if your preferences change, we can help you switch strategies.
For a detailed comparison including requirements and trade-offs, see our complete arbitrage strategies breakdown →
Is Amber Electric a VPP Alternative?
Not everyone wants a third party controlling their battery. If you prefer to stay in the driver's seat while still earning from wholesale price movements, Amber Electric offers an alternative approach.
How Amber Differs from VPPs
With a VPP, the operator controls when your battery discharges. With Amber, you keep full control. You buy and sell electricity at wholesale prices, and their SmartShift feature automates your battery to charge when prices are low (or negative) and discharge when prices spike.
Higher Earnings Potential, Less Predictability
Amber customers with batteries can earn significantly more than traditional VPP participants - but with greater volatility:
Real Customer Example
Anthony, an Amber customer in South Australia with a 9kW solar system and 19kWh battery:
- Average monthly earnings: $100 - $200
- Annual earnings: $1,200 - $1,600
- Best single day: $375 during a price spike
- After 2.5 years: $10,000 better off than expected
"We don't get a bill anymore - we get cheques"
Who Amber Is (and Isn't) For
Amber Is Right For You If:
- ✓ You want maximum earnings potential
- ✓ You're comfortable with variable bills
- ✓ You have a battery and can shift usage
- ✓ You want to keep control of your battery
- ✓ You're engaged and like understanding energy markets
Amber Probably Isn't For You If:
- ✗ You want predictable, stable bills
- ✗ You don't have a battery (yet)
- ✗ You prefer "set and forget" simplicity
- ✗ Price volatility would stress you out
- ✗ You can't shift usage away from peak times
How SmartShift Works
Amber's SmartShift technology connects to compatible batteries and automatically:
- Charges your battery when wholesale prices are low or negative (you get paid to use power)
- Holds stored energy when prices are moderate
- Discharges to the grid when prices spike (you sell at peak rates)
Unlike a VPP, you can override SmartShift at any time. It's automation that works for you, not a third party.
The Bottom Line
Traditional VPPs offer predictable (if modest) returns with hands-off simplicity. Amber offers higher earning potential but requires comfort with price volatility. Neither is "better" - it depends on what kind of energy customer you want to be.
How Much Can You Earn from a VPP in Australia?
VPP earnings vary significantly based on your location, battery size, and market conditions:
Typical Annual VPP Earnings
South Australia
$200 - $600/year
Victoria
$100 - $400/year
NSW
$100 - $350/year
Queensland
$80 - $300/year
Based on 10kWh battery, typical usage patterns. Actual earnings vary.
South Australia typically offers the highest VPP returns due to its volatile wholesale market and high renewable penetration.
Should You Join a VPP? Pros and Cons
Pros
- ✓ Additional income from your battery
- ✓ Support the grid and renewable transition
- ✓ Often includes better feed-in tariffs
- ✓ Can opt out of events if needed
- ✓ No cost to join most programs
Cons
- ✗ Battery may discharge when you want backup
- ✗ Some control handed to VPP operator
- ✗ Earnings can be unpredictable
- ✗ May be locked into specific retailer
- ✗ Internet connectivity required
Frequently Asked Questions
Do I have to join a VPP to get the federal battery rebate?
No. Your battery must be VPP-capable (able to participate), but you don't have to actually join a VPP program. The capability is what matters for rebate eligibility.
What happens to my battery during a VPP event?
During a VPP event, your battery automatically discharges stored energy to the grid. Most programs let you set a minimum reserve (e.g., keep 20% for backup) so you're never completely drained.
Can I leave a VPP program if I don't like it?
Yes. Most VPP programs don't have long-term contracts. You can typically exit with 30 days notice, though check specific program terms.
How often do VPP events occur?
It varies by season and location. Summer peaks might trigger events several times per week. In milder months, you might go weeks without an event. SA sees more events than other states.
Which batteries are VPP-capable?
Most modern batteries from major manufacturers are VPP-capable, including Tesla Powerwall, BYD, Sungrow, Enphase, Sigenergy, LG, and others. Your installer can confirm compatibility with specific VPP programs.
Content reviewed by Battery IQ Energy Analysts | Sources: AEMO, Clean Energy Council, Tesla, AGL, Origin Energy, Amber Electric | Last updated: 9 January 2026