Instead of relying on large-scale generators, the Tesla Virtual Power Plant uses … Contact online >>
Instead of relying on large-scale generators, the Tesla Virtual Power Plant uses
Tesla Energy is steadily becoming a more prolific part of the company''s operations. In the third quarter of 2024 alone, Tesla revealed that its energy division was able to achieve a record gross margin of 30.5%. Tesla also noted that as of Q3, over 750,000 Powerwalls have been installed globally. From this number, 100,000 are enrolled in Virtual Power Plants (VPPs).
"As of Q3, over 100,000 Powerwalls were enrolled in Virtual Power Plant programs, delivering additional financial value to owners while providing much-needed support to the grid during periods of stress," Tesla wrote in its Q3 2024 Update Letter.
The milestone was announced by Tesla Energy in a post on its official X account. In an article on the social media platform, Tesla Energy noted that there are dozens of Tesla VPPs currently operating around the globe. These Virtual Power Plants support local electric grids, and they also balance supply and demand when energy usage spikes in their respective areas.
The contributions of Tesla''s VPPs have been substantial. In California alone, Tesla noted that its Virtual Power Plants delivered over 125 MW of energy during the state''s heat wave peak. VPPs are not only beneficial for the community as well, as they also provide Powerwall owners with a way to lower their utility bills and avoid power outages.
Some VPP initiatives also offer monetary compensation for participants. This became quite evident in September 2022 when Tesla owner Mark Gillund of Sacramento, CA told Teslarati that his solar and Powerwall setup, which were enrolled in the California VPP, earned $510 for sending 255 kWh of energy over a week of VPP events.
As per the Tesla owner, the $510 that his system earned covered the monthly payment of his home’s solar and Powerwall setup.
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Tesla Powerwall owners in the California virtual power plant report making up to $500 in the first year of the new program despite launching only in the summer.
It looks like it could be a real way to lower the cost of owning home energy storage.
A virtual power plant (VPP) consists of distributed energy storage systems – like Tesla Powerwalls – used in concert to provide grid services and avoid the use of polluting and expensive peaker power plants.
In 2021, Tesla launched a VPP pilot program in California, where Powerwall owners would join voluntarily without compensation to let the VPP pull power from their battery packs when the grid needed it. It helped Tesla prove the usefulness of such a system.
Following the pilot program, Tesla and PG&E (the electric utility covering Northern California) launched the first official virtual power plant through the Tesla app with compensation in June.
This new version of the Virtual Power Plant actually compensates Powerwall owners $2 per kWh that they contribute to the grid during emergency load reduction events. Homeowners are expected to get between $10 and $60 per event.
Shortly after, Tesla''s California VPP expanded to Southern California Edison (SCE) to now cover most of the state, and the VPP had its first event, and it was extremely successful.
Tesla has now sent the payments for 2022 to Powerwall owners participating in the VPP, and they are reporting up to $575 in revenue (via reader Mahkus who has been documenting his use on )
This appears to be on the higher side of the payment range as this homeowner has three Powerwalls.
Tesla failed to add our new Powerwalls to the VPP until I pestered them, so we didn''t join until the last two weeks of August, and we still got nearly $200/Powerwall in Massachusetts. The program with Eversource is only active in the summer, as they only hit peak loads then. I''m looking forward to seeing what I get next summer with the full summer.
He said that the compensation was for delivering 297 kWh to the grid through 10 events over 26 hours with the VPP. Most other homeowners are reporting payments between $300 and $400.
That''s not bad, especially considering that it was for about half the year. As the VPP expands and becomes more efficient, it''s possible that we could see most owners earning between $500 to $1,000 a year.
It could significantly contribute to reducing the cost of ownership of the Tesla Powerwall or other home energy storage devices, which are becoming increasingly popular to combine with solar power as well as backup power.
Fred is the Editor in Chief and Main Writer at Electrek.
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"Join the Tesla Virtual Power Plant now, to earn up to $350 per Powerwall in your first full year of participation. Turn your excess stored energy into cash by sending it to the grid when demand is high—increasing the value of your power wall in the process," Tesla told LADWP customers through emails.
Tesla noted that its earnings per Powerwall were based on VPP participants from May to October 2024. Tesla estimates that payment for VPP contributions in October 2024 will be over $40 per PW. The company will base the rest of a LADWP customer''s potential earnings on participation in 2025.
A few LADWP customers have already shown interest in joining Tesla''s Virtual Power Plant program on social media. Some existing customers in California and Texas praised Tesla''s VPP program, encouraging people to try it.
Tesla''s VPP in California has expanded significantly over the past few years. In 2022, Tesla and the Pacific Gas and Electric Company (PG&E) started adding users to the VPP in California. Tesla and PG&E welcomed 1,262 homes to the VPP about a month after launching its beta program for Powerwall owners. By January 2023, Tesla and PG&E''s VPP had grown to over 5,700 homes.
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