Why virtual power plants

The grid is at a crossroads

Extreme weather, aging infrastructure, and rising electrification are pushing our grid to its limits.

We need faster, smarter, more resilient solutions to meet today’s demand.

Why Virtual Power Plants

The grid is at a crossroads

Extreme weather, aging infrastructure, and rising electrification are pushing our grid to its limits.

We need faster, smarter, more resilient solutions to meet today’s demand.

Energy demand is on the rise

By 2030, the U.S. will need to add an additional 200 GW of capacity.1

why-vpps-energy-demand-is-on-the -rise-renew-home Purple line graph on black background showing why and how VPPs can influence the upward trend since 2024 to reach 200 GW.
why-vpps-energy-demand-is-on-the -rise-renew-home Purple line graph on black background showing why and how VPPs can influence the upward trend since 2024 to reach 200 GW.

But what if we manage this demand in a way that could reduce the need for new supply?

That’s where virtual power plants come in

Virtual power plants (VPPs) could provide 160 GW of the 200 GW the U.S. needs by 2030.1

And, Renew Home has set a goal to deliver 50 GW of the needed capacity by 2030.

Purple and black circular graphic showing why VPPs like Renew Home play a major role in contributing to the 2030 goal of 160 GW

By 20301

Renew Home’s purple, leaf logomark

50 GW

from Renew Home

160 GW

from VPPs

What’s a residential virtual power plant?

White blueprint on black background of a neighborhood with renewable energy illustrating why VPPs can help
White bolt icon with green border

At a glance

Imagine a coordinated network of energy resources distributed across millions of participating homes.

White house icon with green border

Whole-home

Think smart thermostats, HVAC systems, water heaters — all collectively making small changes in the background to save and shift energy.

Green plus icon

It adds up

When you add it all up, it can create savings for customers and provide capacity for the grid. But while traditional power plants generate new supply, a virtual power plant (VPP) can reduce demand. 

Square grid icon with green borders

Working together

VPPs can work alongside traditional power plants and renewables and aid in supporting a more resilient grid.

A real, untapped resource

Capacity potential by category

Residential VPPs at scale could unlock massive energy savings and load reduction. See the technical potential if every existing device were connected in the U.S.

Smart Thermostats and the Future of VPPs. (Renew Home, August 2024)

Drawing of a home on white background representing how and why VPPs are essential
Drawing of a home on white background representing how and why VPPs are essential by highlighting the HVAC unit in purple
Drawing of a home on white background representing how and why VPPs are essential by highlighting the batteries in purple
Drawing of a home on white background representing how and why VPPs are essential by highlighting the EV in purple
Drawing of a home on white background representing how and why VPPs are essential by highlighting the water heater in purple
Purple HVAC unit drawing illustrating why VPPs could unlock massive savings and reductions

HVACs

70 GW

potential capacity during peak periods2

White drawing of batteries illustrating why VPPs could unlock massive savings and reductions Purple drawing of batteries illustrating why VPPs could unlock massive savings and reductions

Batteries

21 GW

potential capacity during peak periods3

White drawing drawing of an EV illustrating why VPPs could unlock massive savings and reductions Purple drawing drawing of an EV illustrating why VPPs could unlock massive savings and reductions

EVs

8 GW

potential capacity during peak periods4

White water heater drawing illustrating why VPPs could unlock massive savings and reductionsPurple water heater drawing illustrating why VPPs could unlock massive savings and reductions

Water heaters

16 GW

potential capacity during peak periods5

What’s required for VPPs to work

A customer-first approach unlocks a next-gen grid asset

The grid has urgent needs, and VPPs can be a critical resource. But for solutions to actually work, they must put customers at the center.

Put customer savings and benefits first

The approach must be in line with customer preferences. Customers care about savings and control, and want to understand how device features and energy use programs can help them get there.

Make participation easy

While customers want to save, they want their devices to do the work. Turning on (and off) automated device features to shift and reduce energy use should be simple.

Personalize for every home

Every customer and their comfort needs are unique. To create a reliable and predictable resource, VPPs should personalize energy shifts for each home.

A platform that meets customers where they are

Grid solutions from VPPs are needed now. A viable solution should start with the largest load shift potential in the home today—HVAC and heat pumps—while building for the whole home as the adoption of EVs, storage, and other devices increases.

See how our solution does it differently.

Renew Home VPP

Dig in deeper

The power of personalization

Traditional demand response (DR) programs face scaling challenges, but a more customer-centered, personalized VPP approach can unlock a rapidly scalable grid resource.

Download

Two preview pages of Renew Home’s The Power of Personalization position paper layered over one another
Images of two sample pages of Renew Home’s position paper called Smart thermostats and the future of VPPs

Smart thermostats and the future of VPPs

Smart thermostats have played a vital role in grid stability, supporting demand response programs. If integrated into virtual power plants, these homes could unlock massive flexible load capacity.

Download

Benefits that stack up

Give your customers what they want, and the grid what it needs

VPPs can deliver grid reliability, emissions reductions and customer savings – creating a win-win-win for utilities, regulators and the communities they serve.

  1. US Department of Energy, ‘Pathways to Commercial Liftoff: Virtual Power Plants 2025 Update’ report
  2. Smart Thermostats and the Future of VPPs. (Renew Home, August 2024); With more than 82 million central HVAC systems in the U.S. – this calculation is based on air conditioner fleet data from EIA RECS 2020. Coupled with typical measured load shift results from existing DR programs. Shiftable load is assumed to vary with cooling energy use which results in an average 0.88 kW shift per home with smart thermostat, 0.84 kW per home overall.
  3. Smart Thermostats and the Future of VPPs. (Renew Home, August 2024); Based on BNEF's ‘Scaling the Residential Energy Storage Market’, 2023 data, a 0.4W/Wh conversion from LBNL's "Tracking the Sun," 2023, and an assumed 70% attach rate for grid services 
  1. Smart Thermostats and the Future of VPPs. (Renew Home, August 2024); Based on state of California Energy Commission, 2021 report ‘EV Load Shape Presentation’; NREL 33M EVs by 2030, at CEC 10kWh daily charging.
  2. Smart Thermostats and the Future of VPPs. (Renew Home, August 2024); Based on NEEA report ‘CTA-2045 Water Heater Demonstration Report’ and PG&E’s report, ‘WatterSaver Beta test: Use of Water Heater Thermal Storage to Manage TOU Peak Periods’, with total potential load shift based on 0.35 kW per electric resistance water heater and 0.17 kW per heat pump water heater.