The intent and goal of the Cheaper Home Batteries Program (CHBP) of the Federal government is to reduce grid dependence, energy bills and carbon emissions of the Australian households and businesses.
To participate in the CHBP, your solar battery must be Virtual Power Plant (VPP) compatible. The VPP functionality strengthens the intent and goal of the CHBP program.
As long as your solar battery supports VPP functionality, and you sign up for your energy provider’s VPP program, the energy provider will give you a number of benefits, including bill credits, rewards for exporting energy through your solar battery ($1/kWh reward by Origin Energy). You will also receive a fixed amount when you sign up. For example, Origin Energy offers $200 on their VPP program sign-up.
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To understand why electricity retailers offer such benefits, we need to know what a Virtual Power Plant (VPP) is and how it works.
What is a Virtual Power Plant?
In a computer network, different network devices such as computers, printers and servers are interconnected to share resources and information. Similar to a computer network, a Virtual Power Plant is a network of distributed energy resources — solar panels, batteries, wind turbines, and electric vehicles — that are interconnected to act as an integrated power resource or VPP.
The distributed energy resources are controlled by a centralised control system (run by your electricity retailer), which uses complex algorithms and secure and encrypted communication to optimize and manage the distributed energy resources in real time by collecting real-time data such as:
- Availability
- Health of energy resources
- Energy production (in Solar panels and EVs)
- Level of charge in solar batteries, etc.
Upsides of a VPP
As mentioned above, participating in a VPP subscription program of an electricity retailer offers several advantages, such as:
- Better grid stability
- Lower energy bills
- Integration of renewable energy resources into the national grid
- Energy security
Downsides of a VPP
- Despite secure and encrypted communication between the network energy resources, cybersecurity concern persists.
- Owners have lesser control over their energy assets (battery, solar panels or EVs etc.)
- Battery life may be reduced due to frequent charging and discharging (during the events of peak energy demand).
- Cost involved in purchasing and installing a device that enables connecting the energy asset to a VPP.
Despite its disadvantages, a technology like VPP is heaven-sent for Australia’s complex energy grid, which has a substantial share of renewable energy (particularly rooftop solar) in its energy mix.
Increasing uptake of VPP will make the grid responsive to rapid energy demand, help in supporting voltage and frequency stability of the national grid and avoid blackouts and price surge during peak demand periods.
Comparison of VPP programs of electricity retailers in Australia.
While VPP is a surefire way to lower your energy bills, you shouldn’t sign up for it until you’ve read and understood its important terms and conditions.
Consider the following pointers before signing up for a VPP subscription:
- Battery and inverter compatibility
- Smart meter and internet connectivity requirements
- Solar PV system requirements
- Bill credits (calculation of bill credits and how they are calculated) and estimated bill savings.
- Sign up rewards/incentives
- Zero bill guarantee (if any) and its terms and conditions
- Minimum battery reserve and control over energy exports.
- VPP program contract terms
- Data privacy and security
- Implications of participating in the VPP program on battery life and manufacturer warranty.
- VPP subscription termination conditions and cancellation fee.
Comparison of VPP programs of various electricity retailers
| Retailer name | VPP program name | Benefits offered |
| AGL | Bring Your Own (BYO) Battery | $200 welcome credit, $1/kWh per VPP event, and $80 in bill credits per year |
| Amber Electric | Amber for Batteries | Access to wholesale energy prices, smart battery optimisation, lower bills |
| ENGIE (Simply Energy) | ENGIE VPP | $200 as a sign-up reward and about $20 in monthly bill credits for users in NSW, QLD and SA. VPP program subscribers in Victoria will receive a $100 sign-up credit and approximately $15 in monthly bill credits. |
| GloBird Energy | ZEROHERO | Bill credits by exporting energy during peak demand hours. |
| Origin | Origin Loop VPP | $200 sign-up, $1/kWh reward for battery exports during VPP/peak demand periods. |
| Powershop | Charge Force | Up to $40 per month credit on bill. Credits are calculated at a max rate of $6.95/kWh and a minimum fixed rate of 27.7c/kW. |
| ShineHub | ShineHub VPP | $0.55/kWh for energy export to the grid during VPP events. |
| SolarHub | Solar Partner Plus Plan | 17c/kWh feed in tariff (first 10kWh/day energy exported for 12 months), $4,950 discount on purchase price of a Tesla Powerwall 2, and max bill credit $50/year. |
| Tesla Energy Plan/Energy Locals | Tesla Energy Plan | $220 “grid support credits” / year |
| Synergy | Synergy Battery Rewards | 70 cents per kWh during VPP events. |
Availing VPP subscription for solar batteries under CHBP
Only those homeowners and businesses are eligible for battery rebates under CHBP who have a VPP-compatible battery and an inverter. However, participation in a VPP program is voluntary, and there are no regulations or guidelines relating to the VPP program framework in the Cheaper Home Batteries Program.
After the battery installation by a Solar Accreditation Australia (SAA) accredited installer, get quotes from several VPP providers and apply for the subscription.
You need to compare the quotes (bill credits and upfront bonus, price you’ll receive for energy exported to the grid), check their eligibility conditions, evaluate them, and pick the best one.
Some electricity retailers don’t offer VPP compatibility, and you may need to switch to a different retailer.