Grid services and virtual power plants (VPPs) often receive less attention than large-scale batteries, record solar deployments, or new transmission lines. Yet as electricity demand accelerates and traditional infrastructure struggles to keep pace, grid services are emerging as one of the most important and cost-effective tools in the clean energy transition. Over the next decade, U.S. electricity demand is expected to rise sharply. AI data centers are a major contributor, but electrification across households, adoption of EVs, heat pumps, and electric water heaters is also a considerable factor. These technologies are evolving rapidly, adoption is accelerating, and the grid must keep pace.
But we can’t build our way out of this growth. New gas plants, substations, and transmission lines take years and billions of dollars; costs that are passed on to ratepayers. VPPs, by contrast, utilize resources that customers already own, such as rooftop solar, home batteries, and controllable loads, to create fast, flexible, and dispatchable capacity. Standing up a VPP is dramatically quicker and cheaper than building new infrastructure, and these savings benefit everyone.
At the same time, incentives are shifting. Although the ITC steps down for standalone solar in 2026, incentives remain in place for storage and many third-party ownership models. More batteries will be deployed, and more system owners will look to grid programs to monetize them. Grid services solve operational challenges quickly and affordably while supporting decarbonization and resilience. Here are four reasons they’re becoming the unsung hero of America’s clean energy future.
1. They unlock true scalability for distributed storage
Most U.S. residential solar systems remain standalone. SolarEdge has roughly 2.1million residential systems across the country, but only about 100,000 include batteries. Even so, attachment rates are rising sharply, in some markets nearing 70% and 38% nationally in Q3 2025, meaning many new solar customers now add storage. Grid services are what transform batteries from backup tools into revenue-generating, grid-supporting assets.
California’s demand-side grid support (DSGS) program more than doubled in size from 515 MW to 1145 MW from October 2024 to October 2025. Puerto Rico’s program expanded rapidly due to grid instability paired with strong incentives. Nationwide, utilities of all types, including co-ops, investor-owned utilities, and retail energy providers, are launching new grid-service programs.
SolarEdge nearly doubled the number of programs we participate in over the past year. Policy is also accelerating growth: Illinois now requires all large utilities to have an approved VPP by the end of 2028. Similar initiatives have recently been announced in Louisiana and New Jersey. Without grid services, it’s challenging to scale residential batteries into a meaningful fleet. With them, distributed storage becomes a flexible and fast-growing resource that can be deployed in months rather than years.
2. They deliver local reliability without expensive new infrastructure
For utilities, VPPs not only meet demand but also serve as a strategy to avoid major capital expenditures. The most common use cases for grid services are demand response and emergency load-reduction programs. On a hot evening, when ACs, EV chargers, and appliances all run simultaneously, demand spikes. Historically, utilities built gas peaker plants that sit idle most of the year but exist solely to cover these short, intense peaks.
VPPs flip that model. Instead of firing up a peaker, the “demand-side plant” activates – home batteries discharge, thermostats pre-cool, EV charging pauses. A well-designed VPP can provide equivalent demand support.
Load-modification programs deliver daily reliability. Batteries export to the grid during peak hours, which usually vary monthly and annually. These DPPs act like distributed generators placed exactly where feeders are stressed at the times they need it most.
In high-solar markets like Hawaii, batteries solve a different problem. Midday over-generation can cause voltage issues and equipment overloads. Batteries absorb excess solar energy to stabilize the grid without curtailment.
All of these services defer costly infrastructure upgrades by leveraging devices homeowners already own.
3. They enable cleaner, more efficient grid operations
The growing presence of distributed solar underscores the urgency of adopting clean energy technologies and their increasing accessibility. However, while high solar penetration brings sustainability benefits, it also adds operational complexity. Midday surges, steep evening ramps, and intermittency create volatility. Batteries paired with intelligent control are among the most flexible tools for addressing these challenges. As VPPs and their operators mature, the charging and discharging of each enrolled battery system can be precisely managed in near real-time to provide predictable, reliable, dispatchable power. When this happens, a power plant composed of DERs will be indistinguishable from a centrally managed plant.
Beyond peak shaving and load shifting, distributed batteries help manage voltage and frequency at the feeder level. The grid must stay within narrow operating bands. When voltage or frequency drifts, due to sudden load or generation changes, equipment can trip or be
damaged. SolarEdge batteries constantly monitor grid conditions and respond within fractions of a second when values deviate, providing highly local but essential support. Utilities increasingly want this level of precision.
4. They create more equitable ways for people to participate—and get paid
Thoughtfully planned, grid services can also help address energy equity. Residents of low- to moderate-income neighborhoods can be boxed out of DER adoption due to equipment costs and insufficient grid infrastructure. Local energy storage can help protect these communities from the greater impact of outages compared to higher-income areas. Grid services provide a means to direct investment, compensation, and resilience to these communities.
The message that resonates most is simple: you get paid to help keep your community’s power reliable. Participants retain control, rarely notice events, and can opt out at any time. The concept builds on decades of thermostat-based demand-response programs, just applied to batteries. Still, misconceptions exist. The most common belief is that utilities are “taking my power.” In reality, utilities and ISOs pay for a defined grid service. Programs follow specific rules about when events occur, how performance is measured, and who supports the customer. Clear communication is essential to building trust and participation.
When done well, grid services make clean energy more participatory. Instead of something homeowners simply install, it becomes something they do, with personal and community benefits.
Where we go from here
If I could choose the headline I’d like to see five years from now, it would be: “80% of Home Batteries Are Enrolled in Grid-Service Programs.” That may be ambitious, but broad participation should be the goal. Success will be measured not just by megawatts under contract but by cost-effectiveness. VPPs must deliver capacity at a lower cost per megawatt-hour than new gas plants or traditional grid upgrades. That will be the metric that proves their long-term value.
For the industry, the focus now is clear:
1. Build more capable hardware and software for advanced services.
2. Simplify the customer experience so participation feels effortless.
Grid services will not replace the need for new generation or transmission. But they are one of the most powerful, scalable tools we have to meet rising demand, manage high solar penetration, and achieve ambitious climate goals. They may not always be in the spotlight, but they are fast becoming essential building blocks of America’s clean energy future
By Tammy Sinensky, Senior Manager, Grid Services Product – North America at SolarEdge
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