Do I need a VPP-capable battery?

If your home is connected to the grid and you want the federal Cheaper Home Batteries discount, the battery system, inverter included, must be capable of taking part in a virtual power plant (VPP). Joining one is not required. Off-grid batteries don't need the capability at all.^[1]

What a VPP is

A virtual power plant is a group of household solar and battery systems, coordinated so they act as a single power source and can share energy.^[2] South Australia's regulator puts it plainly: a VPP links many batteries so they can work together to support the electricity system at times of high demand, while the household still uses the energy stored in its own battery.^[6]

What VPP-capable means

The department's test is about the inverter. It must be able to connect to the grid and to outside parties, directly or indirectly; it must be able to communicate and respond to remote signals; and it must have the communications protocol that lets the battery receive and act on those signals.^[1] The capability sits in the equipment; nothing changes in how the battery runs until you sign up with a provider.

Capable is not the same as joined

A battery's management system can be set up for backup power, for the biggest bill savings, or to take part in a VPP, and the government's consumer guide describes VPP capability as giving you the option to join at installation or later.^[2] To actually take part you will need an ongoing internet connection.^[1] If you never join, the federal discount is unaffected.

When joining pays more

Some states pay you to join, on top of the federal discount. The two are separate: you can take the federal discount and turn down every VPP offer. Whether a state payment is worth its terms is a decision for later, but it can change which battery you buy now.

• New South Wales: a one-off incentive for connecting a battery of more than 2 and up to 50 kWh to a VPP. It is larger for up to 28 kWh made available to the grid, the provider you choose sets the amount, and it can be claimed once per electricity meter.^[3]
• Western Australia: a state rebate of up to $1,300 for Synergy customers or $3,800 for Horizon Power customers, in addition to the federal discount, but only if you join your retailer's VPP.^[4] The VPP agreement runs for two years, after which you can opt out at any time.^[5]
• South Australia: approved retailers may offer a VPP activity under the state's Retailer Energy Productivity Scheme for new or existing home batteries.^[6]

Other states had no VPP payment open when we last checked; the state top-ups list what each one offers.

The catch for WA buyers

Being capable for the federal program is not enough for the WA rebate. The battery must also appear on Synergy's or Horizon Power's supported solutions list for your area.^[4] A battery that suits the federal rules can still miss out on the state money, so check the retailer's list before you sign, not after.

What to ask the installer

• Is this battery and inverter, as installed, VPP-capable under the Cheaper Home Batteries rules? The retailer and installer have to confirm in written statements to the regulator that the system complies.^[1]
• Which VPPs in my area support this exact battery, if I want to join one later?
• Will joining need any extra hardware, a meter change or a different tariff?

Yes, an on-grid battery has to be VPP-capable for the federal rebate. No, you don't have to join. If you might want a state VPP payment, check that the battery is on that VPP's list before you buy.