Virtual Power Plant Setup Cost: Panels & Battery
Australia leads the world in the use of solar. At the same time, there is too much pressure on the electricity grid during peak hours. Solar power providers have the plan to boost the electricity grid during peak hours through the use of virtual power plants.
Depending on where you live and how you organize your VPP, you will purchase solar batteries for a VPP from $2,000 to $18,000. You will pay $3,500 to $10,000 for solar panels depending on the capacity of the solar system you want for your home.
Many factors determine how much you pay for a VPP setup. There are also eligibility requirements that may lock you out of the setup.
| Description | Low cost | High cost |
|---|---|---|
| Solar batteries for a VPP | $2,000 | $18,000 |
| Solar panels cost | $3,500 | $10,000+ |
Factors that determine how much you pay for a VPP setup
Location
Where you live determines how much you will pay for a VPP setup. Some regions have a subsidy for solar batteries for VPPs while others do not. Additionally, the subsidy for solar panels varies depending on your location.
Brand of battery and solar panels required
There are many brands of solar panels and batteries in the Australian market. Different battery brands cost differently.
Some VPP programs require that members use only a specific brand of solar batteries and panels. For example, SA partnered with Tesla to set up a VPP. Households within the SA VPP program must use the Tesla Powerwall batteries.
Members of the SA-Tesla VPP program can lease their batteries or purchase them for a subsidized amount.
Other programs may or may not have a specific brand of batteries and solar panels. It could result in a cheaper way to join a VPP.
Size of the solar system
The larger the solar system you purchase for your home, the more you will pay. A 10kw solar system costs more than a 6Kw system. The larger your solar system, the more solar panels you need to buy. Hence, a large investment in the initial phase of your solar power use.
Additionally, the larger your solar system the more batteries you may need which is an additional cost.
Battery storage capacity
The larger your battery, the more it costs. Some VPP programs dictate the capacity of batteries for those who would like to join the program.
VPP subsidy
Depending on your location and the VPP programs available, you are likely to get a subsidized price for batteries and solar panels.
Where the programs do not provide a subsidy, the feed-in tariff rate or the credit on your electricity bill is higher. Thus, you can enjoy the benefits of the VPP program.
What is a virtual power plant
A virtual power plant is a network of home and business-installed solar battery systems working in coordination. The VPP controller can tap into the connected solar batteries remotely to export part of the stored electricity into the electricity grid during peak hours. The owners of the batteries then get a credit that offsets their electricity bills.
When you join a VPP program, you will stipulate how much of the stored energy in your batteries can be exported to the grid.
Benefits of a virtual power plant
- Reduced electricity bills. When you use both solar and electricity from the grid, you will still receive an electricity bill. With the credit received from the VPP program, you will have a lower amount to pay for your electricity.
- Reduces the occurrence of blackouts in your region. During peak times, the grid may get overwhelmed. VPP programs bring in additional power which ensures that the grid stays active during peak hours.
- Creates a grid that can absorb more renewable energy. Making electricity more eco-friendly.
- You can get a subsidy on the purchase of solar batteries when joining a VPP program. Solar batteries are expensive. The large discount to join a VPP enables many people to own them.
Cons of a virtual power plant
- You lose the energy independence that comes from owning a complete solar system. When you join a VPP, you do not have control over all the electricity stored in your batteries. Hence, you may still have to rely on grid electricity and pay electricity bills.
- You may have to buy additional solar batteries that are eligible for the VPP program if the one you currently have is not.
- VPP programs may lead to the overuse of your solar batteries. It may lower its efficiency and lifespan. Thus, you may have to replace your battery before its useful lifespan which reduces the savings made when you purchase a solar system.
Eligibility criteria for a VPP program
- Location. You must live within a given region in which the VPP works. The remote network connects to solar batteries in a given region.
- Specific battery brand. Some VPPs are controlled by the battery brand or in partnership with the state or an electricity retailer. Thus, you must purchase a specific solar battery to join.
- A contract that agrees on the feed-in tariff and how much power can be absorbed from your battery.
- Size of your solar system. Some VPP programs may need you to have at least a 5Kw solar system to join.
Hire a pro to setup a virtual power plant for you
To be eligible for the VPP program, you must purchase your solar battery from a Clean Energy Council accredited solar installer. Here is how you can find a reliable installer fast.
Gosolarquotes.com is a free tool that connects homeowners to accredited solar panel installers.
- At the top of the tool, enter your zip code.
- Then, fill out the subsequent form to provide more information on your house size and electricity consumption.
- You will then receive three quotes from professional installers with no obligation to hire them. Compare the quotes and choose one of the installers to install the solar system for you.
