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How to unlock the flexibility in home batteries
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Out of all 407 home owners with batteries included in the survey:
of battery owners
surveyed have not joined
a VPP
of those who did join
chose a wholesale VPP
of wholesale VPP
customers are satisfied
Key insights
Control and trust
Seven out of ten respondents have not joined a virtual power plant (VPP), citing loss of control and a lack of trust.
What owners want
Instead of myopically chasing VPP sign-ups, Government should recognise the full range of flexible behaviours.
Stay in control
Simpler battery tariffs can unlock more flexibility without loss of control.
How to unlock the flexibility in home batteries
Batteries are rapidly changing the economics of our energy system and promise to be an important source of flexible energy, available on demand. The trouble is, among 407 battery owners, we found that only 3 in 10 have signed up for a ‘virtual power plant’, the main way the Government plans to deliver flexibility, raising concerns about trust and control.
Instead, to unlock more flexible home batteries, Government needs to adopt a wider definition of ‘flexibility’. Flexible behaviours can be incentivised by a wider range of simple tariffs which reward people for soaking up solar or exporting to the grid in the evening while staying in control.
About this research
Report downloads
Related readings
What did 407 battery owners tell us?
How do those not in a VPP feel about VPPs?
Seven out of ten respondents have not joined a VPP, citing loss of control (49.3%) and a lack of trust (33.8%) as the main reasons not to join a VPP.
Uptake of VPPs
Of the minority who have joined a VPP, 60% have joined a wholesale VPP (e.g. Amber) rather than a conventional VPP (e.g. Plico, Globird) which just controls a battery during occasional events.
Reasons for signing up to a VPP
Customers of wholesale VPPs report signing up to get the most out of their batteries (82%) and for lower bills (74%), whereas those on conventional VPPs mostly wanted to support their local grid (59%).
VPP satisfaction
Most (75%) of those on the wholesale VPP are satisfied with the experience, whilst on conventional VPPs as many are neutral (47%) as are satisfied (44%).
What we can learn from the data:
Conventional VPPs are appealing to a minority who want to support their grid. Those motivated to save money are opting for a wholesale VPP.
Conventional VPPs are not providing enough incentive, or value, to attract participants to mitigate perceived concerns of lack of trust and control, and are struggling to satisfy many of those who do join.
How can we unlock thousands of flexible home batteries?
1
Simple tariff and VPP comparison tools are needed for consumers.
2
Protections are needed to ensure that these offers serve consumers.
3
To unlock more battery flexibility, we need a wide range of battery rewards, to appeal to varying consumer appetites for different degrees of flexibility.
Wholesale tariffs and VPPs with smart algorithms appeal to some.
Conventional VPPs offer important dispatchable flexibility. Suitable for those willing to surrender some control.
Sophisticated time-of-use tariffs incentivising and penalising consumption and export at different times.
Battery rewards: simple evening feed-in tariffs, evening self-sufficiency rewards.
4
Local network pricing can unlock more value.
Flexibility is a scale
A home battery can be flexible in different ways, from soaking up your own solar to serving the needs of your local network.
FAQs
Straight answers to the questions battery owners asked us most often.
A virtual power plant pools many home batteries into one resource. The operator can charge or discharge them to support the grid. Owners typically receive a payment or discount for participating.
In this report, a conventional VPP is one which charges or discharges home batteries during grid ‘events’ and pays the owners.
A wholesale VPP uses an algorithm, personalised to the household, to charge and discharge a home battery throughout the day to optimise the household’s bill using the wholesale tariff.
Only 30% of the 407 battery owners we surveyed had joined a virtual power plant.
The battery owners who have not joined a virtual power plant cited the loss of control (49%) and low trust in VPPs (34%), while 23% said they did not understand VPPs.
1 - Simple tariff and VPP comparison tools are needed to help consumers find the tariff that works for them.
2 - Protections should ensure that owners can use their batteries and that these tariffs serve consumers.
3 - To unlock more battery flexibility, we need a wide range of battery rewards, to appeal to varying consumer appetites for different degrees of flexibility.
4 - Local network pricing: can unlock more value. Price signals based on what your street or substation needs could pay battery owners and save network costs.
Energy flexibility is increasingly important to ensure that electricity is available when we need it. Batteries are the cheapest way to provide this flexibility: absorbing excess solar and supplying energy when demand is high. As households rapidly install home batteries, we can unlock the flexibility they hold through better policy.
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