Tesla Is Creating a 'Virtual Power Plant' in California

Tesla and California utility Pacific Gas and Electric Company launched a new program that pays eligible Powerwall home battery owners to send excess energy to the state's power grid in times of need.

To participate, opt into Tesla's Virtual Power Plant (VPP) and adjust your backup reserve (while maintaining enough energy for outages) to automatically dispatch when the grid needs emergency support. Tesla ran a similar pilot last year, but the program was voluntary with no payouts.

As well as the personal feeling of satisfaction for helping to stabilize California's grid, you'll receive $2 for every additional kilowatt-hour delivered during designated "events," such as any time grid operator CAISO issues an energy alert, warning, or emergency. Contributors will receive push notifications before and during an event with details of its expected start and finish times. Once an event is over, each Powerwall will automatically resume normal operation.

Virtual Power Plant participants must, of course, own a Powerwall (with or without solar), and are only eligible if they are an existing PG&E customer not enrolled in any conflicting programs (another VPP, demand response program, Community Choice Aggregator, etc.), with a valid Rule 21 interconnection agreement. Folks can sign up in the Tesla app and, if approved, are enrolled automatically.

Compensation depends on a number of factors, including energy capacity (i.e. the number of Powerwalls and your backup reserve settings), battery levels, and whether it can export all available energy.

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A fully-charged Powerwall with 20% backup reserve that typically serves 3kWh of energy during event hours, for example, could deliver an additional 7.8kWh to the grid, earning its owner $15.60. Someone with two Powerwalls, a backup reserve of 40%, and a typical 5 kWh load, meanwhile, would deliver 11.2kWh, which is worth $22.40.

At the end of each season—typically near the conclusion of a calendar year—PG&E will calculate individual contributions and incentive payments, expected from Tesla before the end of March 2023.

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