California VPP Links 100,000 Residential Storage Batteries
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At 7:00 pm on July 29, 2025, history was made in California. That’s when PG&E, SCE, and SDG&E tapped 100,000 residential storage batteries installed by Tesla and Sunrun to form a first of its kind VPP — virtual power plant. In all, those batteries supplied about 535 megawatts of electricity to the grid — enough to supply the electrical needs of hundreds of thousands of homes during peak demand.
In a blog post, PG&E said, “This wasn’t a blackout. It wasn’t an emergency. It was a test. But it was the largest test of its kind ever done in California — and maybe the world.” Maybe or maybe not. Australia has some pretty big VPP installations of its own. But that is beside the point. What is important is that the test gave the lie to the “solar power is not reliable” psychobabble so popular with ultra-right wing fossil fuel supporters.
It is true that the sun sets every night. Not even the failed president can alter that fact. Solar power was severely limited before battery storage became affordable a decade ago, just as traveling by electric car was problematic before charging networks were available. But the narrative from 2015 is just lies and distortions today. The VPP test conducted by PG&E, Tesla, and Sunrun proves it.
The PG&E blog went on to say that with the demand for electricity surging and climate events becoming both more frequent and more severe, the grid is prone to peaks of extreme stress. That’s why the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC) created programs like the Emergency Load Reduction Program (ELRP) and Demand Side Grid Support (DSGS). These programs reward people and companies for reducing electricity use — or providing backup power — when the grid is stressed. But before these programs can be fully trusted, they need to be tested.
On July 29, from 7:00pm to 9:00pm, the batteries discharged power to the grid. More than half of the energy came from customers in PG&E’s Northern and Central California service area. The rest was supplied by customers of Southern California Edison and San Diego Gas & Electric. The goal of the test was to prove that the batteries are capable of responding quickly, reliably, and in sync.
This wasn’t just a tech demo, PG&E said. It was a real-world rehearsal for when those batteries will really be needed — during grid emergencies. To verify the results, Tesla and Sunrun brought in an independent third party, Brattle Group, to analyze and assess the impact of the test. “On peak days, using VPPs to serve CAISO’s net peak could reduce the need to invest in new generation capacity and/or relieve strain on the system associated with the evening load ramp,” the Brattle report said.
“One of the most powerful parts of this test was the participation of customers from underserved and rural communities and areas more prone to outages. Some are from neighborhoods where power loss due to Enhanced Power Line Safety settings is more frequent, and where backup energy is most needed,” PG&E said.
“Four years ago this capacity didn’t even exist,” Kendrick Li, PG&E’s director of clean energy programs, told Semafor. “Now it’s a really attractive option for us. It would be silly not to harness what our customers have installed. He added expanding the use of VPPs should be transparent to the owners of residential battery owners. battery owners — except for the credits they earn that show up on their utility bills.
California could easily reach over a gigawatt of VPP capacity within five years, Li said. Nationwide, a Department of Energy study during the Biden administration forecast that VPP capacity could reach up to 160 gigawatts by 2030, essentially negating the need for dozens of new fossil fuel power plants, with no emissions and at a far lower cost. In 2024, utilities in 34 states moved to initiate or expand VPP networks, according to the advocacy group VP3.
The biggest problem VPPs face is the complicated paperwork that customers sometimes need to complete for their utilities or battery providers in order to participate, Ben Brown, CEO of the VPP management firm Renew Home told Semafor. “There are more barriers in enrollment than there needs to be in a lot of markets.”
Tesla Explains Its VPP Program
On its website, Tesla explains the program to its Powerwall customers this way. “By becoming a part of the Tesla Virtual Power Plant (VPP) with PG&E, your Powerwall will be dispatched when the grid needs emergency support. Through the Emergency Load Reduction Program (ELRP), you will receive $2.00 for every additional kWh your Powerwall delivers during an event. As a member, you can adjust your Backup Reserve to set your contribution, while maintaining backup energy for outages.”
It lists the following benefits for those who choose to participate:
- Stabilize California’s grid with clean and reliable energy
- Unite the Tesla community to form the largest distributed battery in the world
- Increase your Powerwall value with program-based incentives
- Maintain your energy security with program participation best suited for you
Powerwall owners with or without solar are eligible to participate in PG&E’s ELRP if they:
- Receive electric services from PG&E or are Community Choice Aggregation (CCA) customers located within the PG&E service territory
- Have a residential service account
- Are not enrolled in a non-utility demand response program or another virtual power plant
- Have a valid Rule 21 interconnection agreement
“Once you are enrolled in the program, Tesla and PG&E will call upon the virtual power plant when the grid operator, California Independent System Operator (CAISO) declares an alert, warning or emergency in response to challenging grid conditions. Tesla and PG&E may also call events at other times to meet the program minimum of 20 hours of events. These additional events may include responses to CAISO Flex Alerts.
“When an event is scheduled, you will receive a push notification informing you of event times. You can expect your Powerwall system to prioritize charging and prepare for an event after one is scheduled. An event may be scheduled a day ahead, but circumstances may require much less notice.
“When the event begins, you will receive a push notification reminding you of the event end time as your Powerwall begins to discharge to support the grid. Your Powerwall will discharge either until the event ends, or until it reaches your selected Backup Reserve level. Powerwall will export a safe amount of power, which may be similar to onsite solar export. This may not be the full power capacity of your Powerwall. At completion of the event, Powerwall will resume normal operation.”
The Tesla Powerwall offers customeres three way to control who they participate in VPP events.
- Set your Backup Reserve — Powerwall will not dispatch to an energy level below your Backup Reserve. Setting your Backup Reserve is the best way to control how much energy you elect for participation and how much you maintain in case of an outage.
- Opt-out of a Single Event — When an event is scheduled or active, Powerwall gives you the option to opt-out of the event through the Tesla app. When you opt-out, Powerwall will stop reacting to the event and resume normal operation.
- Suspend Participation — You have a Tesla VPP participation toggle in the ‘Settings’ menu of the Tesla app. If you turn this off, your Powerwall system will not react to events when they are scheduled, and you will not be notified of the events. You are still enrolled in the program, however, and can resume your participation at any time by toggling your participation back on.
The program is dead simple. If you agree to participate, you get paid for any electricity that gets fed back into the grid. You have total control over how much or how little electricity you choose to share. If you want to opt out at any time, you are free to do so without penalty.
The Takeaway
Technology is always changing and adapting. 20 years ago, solar power was so expensive, it was little more than a curiosity. Today it is among the cheapest sources of new electricity generation. Ten years ago, storage batteries were so expensive, they were little more than a curiosity. Today they are an affordable alternative to building new power generating facilities and getting cheaper all the time.
Google has just inked a deal with Energy Dome to help power its data centers around the world. Some readers have noted that the Energy Dome system does not allow for near instantaneous frequency and voltage adjustments and that is so. Every technology has advantages and disadvantages and apparently Google has decided the Energy Dome system will meet its needs.
The world, and especially the United States, seems to be stuck in some sort of time warp in which all new ideas are suspected of being the product of a woke mind virus — or worse! This anti-innovation mindset will leave those countries far behind the rest of the world and panting to catch up. Why the US, which wants to be a world leader, should opt for being a world laggard is frankly beyond comprehension.
Carpenters used to use a hand-powered brace and bit to bore holes in wood and a saw to cut boards. Blacksmiths used to forge nails by hand. We could still do both, but why? Because of some ideological mumbo jumbo? That is hardly the mark of a world leader, is it? Readers may have some thoughts on this and we can’t wait to read them.
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