Home System concept How Solar Installers Can Capitalize on the VPP Gold Rush

How Solar Installers Can Capitalize on the VPP Gold Rush

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Virtual power plants are all the rage right now on both US coasts. A utility will aggregate a group of residential batteries, draw on that stored energy when the grid needs it most, and compensate storage customers for that access. But is VPP something solar and storage installers can sell to customers?

Yes – if installers are involved with the correct brands of batteries in the correct utility territories.

While VPPs in the North East have been established for a few years, many programs in the West are just entering pilot phases. Due to their experience, VPPs in the North East have moved from single battery brand programs to BYOD (bring your own device) setups. Some of the newer VPPs in California only work with specific battery brands, but may soon switch to the BYOD model after more data is collected.

For example, a VPP pilot program through Southern California Edison (SCE) now only works with Generac PWRcell batteries, while VPP ConnectedSolutions working with three utilities in the Northeast accepts seven brands of inverters and their associated batteries. : Enphase, Generac, Outback/sonnen, Sol-Ark, SolarEdge (including LG batteries), SunPower and Tesla.

For Tesla Powerwall dealerships in SCE territory, there is currently no VPP enrollment opportunity. But for New York Powerwall resellers in National Grid territory, it can be beneficial to incorporate VPP compensation into initial sales conversations.

A Tesla Powerwall installation in Hawaii completed by RevoluSun.

This is exactly what RevoluSun does with its solar + storage customers in Hawaii. Hawaiian Electric contracted aggregator Swell Energy to establish a 100 MWh VPP on the islands of Oahu, Maui and Hawaii using only Tesla Powerwalls. Fortunately, RevoluSun is a huge Tesla dealership across the state, installing more than 1,000 solar systems paired with Powerwalls each year. Based on VPP usage, customers are credited to their utility bills, which RevoluSun offers during the first sales conversations.

“From a business perspective, we are taking into account this potential new revenue,” said Josh Powell, CEO of RevoluSun. “People are paying $500 a month for electricity [in Hawaii], and they can save half tomorrow if they switch to solar power with batteries. You add an extra VPP, and you may have just taken another $50 or $100 out of the equation. It’s a really powerful incentive in that direction.

Battery suppliers involved in VPPs are also encouraging their installers to use VPP listing as a sales tactic. Generac has alerted its dealers to the SCE VPP and set up a website to facilitate customer registration, said Bud Vos, president of Generac Grid Services.

“The VPP concept and the ability to create [additional compensation] of a utility will improve the return on investment for the customer,” he said. “You have a client who puts thousands of dollars worth of stuff on his house. If we can improve that ROI quite dramatically, in some cases by as much as 50% depending on the region of the country, that’s very compelling. »

The first step to using VPPs as a business advantage is to understand the chain of command from customers to the utility. First there is the residential customer using a specific battery behind the counter. The storage system interacts with a software platform used by a aggregator to join multiple farms in a VPP. This VPP is presented to the utility. The installation company sits somewhere in the middle and has nothing to do but suggest customers sign up to participate in the virtual power plant through the battery company, aggregator, or public service.

Sun Power

SunPower’s SunVault Energy Storage System was a late addition to the ConnectedSolutions program’s list of approved batteries. Nate Coleman, chief product officer at SunPower, said the company needs to ensure its software control platform can interface with the utility’s management platform, which will need to be verified for each VPP. . SunPower initially set its sights on the ConnectedSolutions program in the Northeast due to its significant geographic reach and established administration, but the company is already exploring other regions of the country for VPP enrollment.

“We’ve seen that California, Hawaii, and the Northeast are the top regions for these types of programs; however, there are high-quality programs across the United States, and new VPP programs continue to emerge as utilities recognize the benefits,” Coleman said.

While many in the VPP game are excited about the potential growth areas, the pool of functional VPPs is small in 2022. If the stars align for installation companies, the potential compensation for participating in a VPP could grow solar and storage customers at the finish line. Companies like SunPower are encouraging their dealers to use these new incentives to entice more customers to switch to solar + storage.

“With nearly half of homeowners experiencing an outage in the past year, solar providers and utilities need greater collaboration to build grid resilience,” Coleman said. “Even though utilities are early in their adoption of VPPs, it’s an effective way to reduce the stress of our aging energy infrastructure while putting more money in customers’ pockets.”

With more customers choosing to install batteries with their solar systems – 6% of solar systems installed in 2020 were battery-coupled, while SEIA projects that number will increase to 25% by 2025 – utilities can benefit from the growing abundance of stored energy.

“It’s unequivocally the future of consumer power,” RevoluSun’s Powell said of virtual power plants. “If you don’t install batteries, you need to figure it out.”

The work that RevoluSun has already done over the past five years to accelerate battery installations has facilitated sales with virtual power plants.

“We feel we can deliver on the promises we made to customers: your energy asset is worth investing in and you can get the most out of it later. We talked about things like that with a little asterisk, hoping that was where the market is going,” Powell said. “My recommendation is: Get on the bus. It’s going faster than you think.