Virtual Power Plant Revenue Calculator

VPPs aggregate distributed batteries/DER to sell grid services for revenue share.

Battery kW enrolled

Capacity $/kW-yr

Performance $/event

Events / yr

Operator share %

Annual net revenue

$34,125

Gross revenue

$45,500

Per kW per year

$341.25

How the math works

Gross = capacity × kW + events × kW × per-event. Net = gross × (1 − operator share).

100 × $80 + 100 × 15 × $25 = $8k + $37.5k = $45.5k × 75% = $34,125 net = $341/kW.

How to Use

Enter battery capacity kW.
Enter capacity payment per kW-year.
Enter performance payment per event.
Enter events per year.
Enter VPP operator revenue share %.
Read annual revenue.

Frequently Asked Questions

What is a VPP?

Virtual Power Plant: software-coordinated aggregation of distributed batteries, solar, EV chargers, smart thermostats to act as a dispatchable resource for the grid. Participates in wholesale markets (capacity, ancillary services) or utility demand response programs. Examples: Tesla's VPP (CA, MA), Swell Energy, Sunrun, EnergyHub, Octopus Energy.

Revenue streams?

Capacity payment: $30-200/kW-year just for being enrolled. Performance payment: $5-50 per event dispatched. Energy arbitrage (buy low, sell high): $50-200/kW/year. Ancillary services: $20-100/kW/year. Demand response events: 5-30 per year typical. Total VPP revenue: $80-400/kW-year for well-compensated markets (CA, MA, NY).

VPP operator share?

Operator keeps 20-40% of revenue for software, dispatch, grid relationship. Participant keeps 60-80%. Some programs (Sunrun, Octopus) give 100% of revenue to customer, keep management fee. Contract terms: 5-10 years enrollment typical. Customer retains ownership + usage rights of battery. Battery backup capacity preserved (e.g., 80% available for customer, 20% for VPP).

Battery wear?

VPP cycling adds 50-200 cycles/year to battery. Modern batteries (LFP chemistry): 5,000-10,000 cycle life. Adds 5-10% to degradation per year. VPP payments typically exceed degradation cost. Most battery warranties: 70% capacity at year 10. VPP may require specific warranty coverage or pre-approval from battery manufacturer.