--- title: "What the 2025 Virtual Power Plant (VPP) Market Report Tells Us About the Storage-Led Shift — A Conversation with Ohm Analytics" id: "6177" type: "post" slug: "what-the-2025-virtual-power-plant-vpp-market-report-tells-us-about-the-storage-led-shift-a-conversation-with-ohm-analytics" published_at: "2026-05-27T13:00:53+00:00" modified_at: "2026-05-22T16:25:22+00:00" url: "https://virtual-peaker.com/blog/what-the-2025-virtual-power-plant-vpp-market-report-tells-us-about-the-storage-led-shift-a-conversation-with-ohm-analytics/" markdown_url: "https://virtual-peaker.com/blog/what-the-2025-virtual-power-plant-vpp-market-report-tells-us-about-the-storage-led-shift-a-conversation-with-ohm-analytics.md" excerpt: "The 2025 Ohm Analytics VPP Market Report landed in January with a number that’s hard to ignore: residential battery virtual […]" taxonomy_category: - "VPPs" --- VPPs # What the 2025 Virtual Power Plant (VPP) Market Report Tells Us About the Storage-Led Shift — A Conversation with Ohm Analytics Kathleen Van Gorden (Guest Author) Published May 27, 2026 Share[https://www.facebook.com/sharer/sharer.php?u=https://virtual-peaker.com/blog/what-the-2025-virtual-power-plant-vpp-market-report-tells-us-about-the-storage-led-shift-a-conversation-with-ohm-analytics/](https://www.facebook.com/sharer/sharer.php?u=https://virtual-peaker.com/blog/what-the-2025-virtual-power-plant-vpp-market-report-tells-us-about-the-storage-led-shift-a-conversation-with-ohm-analytics/) [http://twitter.com/share?url=https://virtual-peaker.com/blog/what-the-2025-virtual-power-plant-vpp-market-report-tells-us-about-the-storage-led-shift-a-conversation-with-ohm-analytics/](http://twitter.com/share?url=https://virtual-peaker.com/blog/what-the-2025-virtual-power-plant-vpp-market-report-tells-us-about-the-storage-led-shift-a-conversation-with-ohm-analytics/) [https://www.linkedin.com/shareArticle?mini=true&url=https://virtual-peaker.com/blog/what-the-2025-virtual-power-plant-vpp-market-report-tells-us-about-the-storage-led-shift-a-conversation-with-ohm-analytics/&source=LinkedIn](https://www.linkedin.com/shareArticle?mini=true&url=https://virtual-peaker.com/blog/what-the-2025-virtual-power-plant-vpp-market-report-tells-us-about-the-storage-led-shift-a-conversation-with-ohm-analytics/&source=LinkedIn) [mailto:?&subject=What%20the%202025%20Virtual%20Power%20Plant%20(VPP)%20Market%20Report%20Tells%20Us%20About%20the%20Storage-Led%20Shift%20%E2%80%94%20A%20Conversation%20with%20Ohm%20Analytics&body=https://virtual-peaker.com/blog/what-the-2025-virtual-power-plant-vpp-market-report-tells-us-about-the-storage-led-shift-a-conversation-with-ohm-analytics/](mailto:?&subject=What%20the%202025%20Virtual%20Power%20Plant%20(VPP)%20Market%20Report%20Tells%20Us%20About%20the%20Storage-Led%20Shift%20%E2%80%94%20A%20Conversation%20with%20Ohm%20Analytics&body=https://virtual-peaker.com/blog/what-the-2025-virtual-power-plant-vpp-market-report-tells-us-about-the-storage-led-shift-a-conversation-with-ohm-analytics/) The [2025 Ohm Analytics VPP Market Report](https://21752392.fs1.hubspotusercontent-na1.net/hubfs/21752392/Ohm%20Analytics%202025%20VPP%20Market%20Report%20Executive%20Summary.pdf) landed in January with a number that’s hard to ignore: residential battery [virtual power plant (VPP)](https://virtual-peaker.com/topline-demand-control/) capacity grew 153% year-over-year — the fastest growth of any technology segment tracked. We asked Senior Policy and Research Analyst Madeline Turner from the Ohm Analytics team to go deeper on what’s driving VPP growth, where the market is stalling, and what utilities should be paying attention to heading into 2026. *Ohm Analytics cites Virtual Peaker as a data source in the 2025 report. Their market perspective below is their own.* ## What’s Driving Battery VPP Growth? ### The headline number from your report is 153% growth in residential battery virtual power plant (VPP) capacity. What’s driving that acceleration, and why now? **Madeline Turner:** The key driver of the growth in residential battery virtual power plant (VPP) capacity in 2025 was enrollment in California’s statewide Demand Side Grid Support (DSGS) program, and LUMA’s Customer Battery Energy Sharing Plus (CBES+) program in Puerto Rico. DSGS grew to over 1.1 GW of enrolled capacity, up from 369 MW in 2024, while the CBES+ program grew 1,212% YoY from 38 MW in 2024 to 499 MW in 2025. For both programs, that growth can be attributed in part to the already dense deployment of energy storage in California and Puerto Rico, and to policy actions that support participation. For example, LUMA was approved to auto-enroll customers in CBES+ beginning in summer 2025, which unlocked ~460 MW of latent storage capacity for grid services participation. ## Scaling & Customer Outreach ### Your report shows that only 45% of deployed residential battery capacity is actually enrolled in a VPP. What’s keeping that other 55% on the sidelines? **MT:** The factors vary across regions. In markets with reduced net metering credits for solar and/or time of use rates, [consumers are more incentivized](https://virtual-peaker.com/solutions/incentive-processing/) to leverage storage for [energy arbitrage](https://virtual-peaker.com/blog/buy-low-use-high-energy-arbitrage-explained/) purposes to offset their utility bill rather than in grid services programs. In regions with higher outage risk, some consumers may be less comfortable with participation in grid services events if they heavily rely on their devices for backup [program designs](https://virtual-peaker.com/program-design/) that allow customers to set their own battery reserve, like CBES+, can help mitigate some of that risk. In some markets, there is limited VPP availability – but we are seeing programs pop up more and more, even if just in the pilot stage. We are hearing increasingly from partners in our contractor network that they are using virtual power plants (VPPs) as part of their pitch to customers, though about 40% in a recent poll we conducted said they were not aware of programs available in their area, which is why they were not. ## VPPs, BESS, & Regulatory Challenges ### Puerto Rico’s CBES program grew from essentially zero to 499 MW of enrolled capacity in two years — largely because of auto-enrollment authorization. How significant is that regulatory mechanism compared to the other policy levers you tracked? **MT:** In terms of regulatory mechanisms that directly unlock capacity, this has had the most significant impact on enrolled capacity of any levers that we have tracked. It should be noted that Puerto Rico already has some of the highest rates of battery deployments in the U.S., with over 90% of solar projects paired with storage, which made it an ideal market to implement this policy; the devices were already deployed, it was just a matter of getting them enrolled. Ohm predicts an additional ~30 GWh of residential storage will come online by 2030, exhibiting double-digit YoY growth through the end of the decade. As storage deployments continue to accelerate, the addressable market of VPP participants continues to grow. If what LUMA did in Puerto Rico can be replicated, that would be an extremely impactful way to scale these programs – and quickly. While upfront incentives are another way to drive deployments and enrollment, like in Duke’s PowerPair program in North Carolina, they can be extremely costly. Auto-enrollment is a far cheaper and quicker option to unlock latent capacity. ## Pilot Programs & Regulatory Oversight ### You tracked more than 150 actions by utilities, regulators, and legislators to promote VPPs in 2025. Are those translating into durable programs, or is most of the market still in pilot territory? **MT:** It’s really a mix, but we are excited to see more programs achieve permanent funding status. LUMA’s CBES+ program, HECO’s BYOB+ program in Hawaii, and San Diego Community Power’s Solar Battery Savings program in California are just a few highlights from 2025. However, we see some markets that have a long way to go and are only just entering pilot territory. While many in this industry may feel fatigue from years of pilots successfully proving what we know is true – that these programs work and can be cost-effective–I think it’s worth celebrating the fact that decision makers at the utility, regulatory, and legislative levels are recognizing the value of virtual power plants (VPPs) and are creating policy frameworks to support and scale them. – Madeline Turner, Senior Policy and Research Analyst, Ohm Analytics While many in this industry may feel fatigue from years of pilots successfully proving what we know is true – that these programs work and can be cost-effective–I think it’s worth celebrating the fact that decision makers at the utility, regulatory, and legislative levels are recognizing the value of virtual power plants (VPPs) and are creating [policy frameworks to support and scale them](https://virtual-peaker.com/blog/from-mandates-to-megawatts-how-new-legislation-is-unlocking-the-virtual-power-plant-market/) . Bills from Colorado, Maryland, and Virginia that passed in 2024 and 2025 are already translating into utility program proposals that are currently under development. The goal is to get those programs transitioned from the pilot phase to permanent funding . ## Funding Battery VPP Programs ### Only 55% of residential battery VPP programs have achieved permanent funding status. What separates the programs that get there from the ones that stall? **MT:** There are multiple factors that drive the success of these programs, but something that we have heard from many of our utility and industry partners is that programs that incentivize actual grid services provided – rather than just offering an enrollment incentive – tend to have the most longevity. ConnectedSolutions in New England is perhaps the longest-running example of what that looks like in practice. The CBES+ program is another great example of performance incentives proving their value, with over 50 dispatch events in 2025 alone. Policy support is another factor that can’t be overlooked – the DSGS program was a key driver of VPP battery capacity growth in 2025 but faces uncertainty past the 2026 season due to budget cuts. Overall, storage deployments are another key factor, with one utility sharing with us that they had to open their battery pilot to their entire service territory after not having enough eligible devices for their initial plan. As storage adoption increases, that will mitigate deployment as a setback, but policy environments that support both adoption and participation can be crucial to success. ## BESS vs. Smart Thermostats ### Smart thermostat growth plateaued at 4% while battery programs scaled rapidly. Is the market making a deliberate technology shift, or is this just where the investment happened to land? **MT:** From our partners on both the industry and utility side, it’s acknowledged that smart thermostats will continue to be a significant part of the virtual power plant (VPP) stack. Smart thermostats represent the majority of residential VPP capacity (~10 GW), but the incentives that drive customers to adopt that technology and enroll it in a program aren’t really changing anymore, whereas the switch to EVs (despite the loss of the federal tax credit in 2025) and the adoption of storage continue to grow. This is less a deliberate shift and more a reality that batteries (whether stationary or part of an EV) can provide a significantly larger number of grid services beyond the traditional load reduction that smart thermostats can accomplish, and over a longer period (~2-4 hours of dispatch vs. a 2-hour HVAC event) without compromising the comfort of the participant’s home. Smart thermostat programs certainly aren’t going anywhere, and are a valuable asset to the grid, but the technologies drawing the most attention and innovation are [multi-DER programs](https://virtual-peaker.com/solutions/bring-your-own-device/) that can provide a multitude of grid services. ## The Value of ROI for Battery VPPs ### What’s the one finding from the 2025 report that you think the utility industry hasn’t fully absorbed yet? MT: I think one key finding relates back to the theme of storage as the fastest growing sector within residential VPPs. Ohm’s research shows that there is a significant amount of storage capacity already interconnected to the grid that is not currently being leveraged for grid services through a VPP program – it’s a matter of creating the right incentives to get those customers to participate. Ohm’s research shows that there is a significant amount of storage capacity already interconnected to the grid that is not currently being leveraged for grid services through a VPP program – it’s a matter of creating the right incentives to get those customers to participate. – Madeline Turner, Senior Policy and Research Analyst, Ohm Analytics Aligning compensation with the actual grid services provided, providing customers with the certainty that program participation is a reliable value stream (i.e. permanently funded vs. a one-off pilot), and instituting policies that make participation easy (auto-enrollment, allowing third party participation, giving participants flexibility to set their battery reserve) are all program design features that can unlock latent capacity on the grid, and incentivize new DER deployments to enroll. ## What the 2025 Virtual Power Plant (VPP) Market Report Tells Us About the Storage-Led Shift Conclusion The numbers in the 2025 Ohm Analytics VPP Market Report point to a market in transition — from pilots and enrollment metrics to permanent programs and dispatchable capacity. Puerto Rico’s CBES program, which Virtual Peaker helps power, is among the clearest proof points that the transition is already underway. With 50+ grid events executed in 2025, 80%+ monthly participation, and permanent authorization through 2028, CBES demonstrates what becomes possible when regulatory frameworks, funding structure, and grid-edge dispatch technology align. The 45% enrollment gap Ohm identified isn’t a ceiling — it’s an opportunity. The hardware is already in homes. What unlocks it is program design, policy authorization, and technology that can deliver dependable load management at scale. That’s the work in front of the industry, and the 2025 data suggests the window to build that track record is open right now. **About Ohm Analytics** *Ohm Analytics provides independent market intelligence on distributed energy resources and virtual power plants. The 2025 VPP Market Report is available at ohmanalytics.com.* ### Operationalizing DERs Just Got Easier: The Next Generation of VPPs is Here! [Learn More](https://virtual-peaker.com/topline-demand-control/) About The Guest Author Kathleen Van Gorden is a Senior Communications Strategist at [DOER/MAKER](https://doermaker.com/) , a forward-thinking marketing agency committed to driving innovation in the energy sector, and the founder of [KVG Communications](https://www.kvgcom.com/) , a strategic communications and public relations firm for mission-driven organizations. 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