Consumer Energy Report Card: Why households adopt batteries and why many aren’t joining a Virtual Power Plant (VPP)
Virtual Power Plants (VPPs) are expected to play a central role in lowering electricity system costs for all consumers by providing valuable system services and enabling greater coordination of consumer energy resources. But despite a household battery storage boom, VPP uptake has been limited, prompting some industry stakeholders to question whether VPPs can be scaled successfully or whether alternative approaches are needed.
Key findings
This report draws on Energy Consumers Australia’s June 2026 Consumer Energy Report Card survey to explore the factors that are currently holding consumers back from participating in virtual power plants (VPPs).
We find that:
- Households purchase batteries primarily to reduce electricity bills, with increasing energy independence, and securing backup power during outages as the next most important motivations
- Significant barriers to VPP participation include limited awareness, concerns about losing control of household batteries, low trust in providers, and limited opportunities
- Low consumer literacy and low engagement can constrain VPP uptake and increase the risk of consumer harm for those who do participate, highlighting the need for stronger consumer protections
- Current pricing arrangements at the retail and network level incentivise batteries to be used for self-consumption. These pricing arrangements are a barrier to VPP adoption and limit the broader system benefits that coordinated battery operation can provide
For households with a battery, the top 3 things holding them back from joining a virtual power plant are:
don't know enough about how Virtual Power Plants (VPPs) work
are concerned about losing control of their battery, or how their energy is used
don't know what the benefits of joining a Virtual Power Plant (VPP) are
while 26% don’t trust energy companies or providers to manage their battery.
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Recommendations
If presented with the choice, most battery users will prioritise maximising their cost savings as opposed to maximising self-sufficiency. This suggests that with the right business models, pricing structures and protections, consumers will consider and choose to participate in VPPs.
From our findings, we recommend that:
- Energy Ministers adopt a consumer duty to ensure VPP customers, are protected from harm and receive fair outcomes.
- The Australian Energy Market Commission (AEMC) implements pricing reforms to require distribution networks to provide cost-reflective network tariffs for retailers and aggregators.
- State governments work with networks to target installing distributed batteries where they are needed most.
- The Australian Energy Market Operator (AEMO) monitors how VPPs are being operated in practice, to ensure system benefits are delivered.
- Governments – potentially through the Australian Energy Regulator (AER) – ensure households receive a fair share of the value generated through VPP participation
