Power From the Porch: How Homes Are Reinventing the Grid

Sunrun and PG&E link household batteries to the grid as utilities test new ways to manage peak demand

4 Apr 2025

Sunrun and Pacific Gas and Electric are launching a residential virtual power plant in California that will use home batteries to support the state’s electricity system during periods of high demand.

About 600 households will send stored solar power from their rooftops to the grid this summer. Participants are expected to receive up to 150 dollars for supplying energy during peak hours, according to the companies. The programme aims to ease strain on the network without building additional large-scale infrastructure.

The project reflects a broader shift in the utility model. Electricity in the United States has traditionally moved in one direction, from central stations to consumers. Virtual power plants, or VPPs, combine the output of many small systems such as residential batteries and dispatch it when needed, creating a more flexible supply resource.

“Virtual power plants are rewriting the rules of the energy game,” said one senior analyst, noting that the model offers “agility and localized control that traditional systems cannot match.”

The system relies on software from Tesla and Lunar Energy that manages when batteries charge and discharge. These tools respond automatically to grid signals, helping stabilise supply while reducing operating costs for utilities.

For power companies, such initiatives shift their role from energy producers to coordinators of distributed resources. For households, the arrangements can lower energy bills and give consumers more direct involvement in local power management.

Policy support has helped advance the model. Federal incentives for clean energy and rising interest in home solar and storage have encouraged utilities to test small-scale aggregation schemes in several states.

However, regulators and companies continue to examine issues around data handling, technical standards and access for lower income households. These factors are seen as important for broader adoption.

The California programme adds to a growing number of pilots across the country as electricity demand rises and extreme weather events place pressure on grids. If the approach proves cost effective, utilities are expected to expand residential participation further over the next decade.