The Residential Virtual Power Plant Software Market 1st Edition

The share of energy generated from intermittent renewable sources such as wind and solar issteadily increasing, making electricity supply more volatile and less predictable. At the sametime, electricity demand is rising rapidly, driven by the expansion of data centres to support AIcomputing, as well as the growing adoption of electric vehicles and electrified heating andcooling systems. Together, these developments place significant strain on existing electricitygrid infrastructure, much of which was designed and built decades ago for a more centralisedand predictable energy system. While the expansion of renewables and electrification isbeneficial for the environment, it also introduces new challenges that must be actively managed.One approach to address these challenges is the use of virtual power plants (VPPs).

A VPP connects and aggregates distributed energy resources (DERs), such as EV chargers,energy storage systems, solar PV, HVAC systems and compressors, into a single controllableresource. Residential VPPs aggregate DERs installed in homes, primarily smart thermostats, EVchargers, home batteries, heat pumps and rooftop solar PV systems. Individually, these assetshave little effect on the energy system. However, when thousands of them are aggregated, theyform a significant resource comparable in scale to a conventional power plant. A VPP can supplyenergy, reduce demand and provide critical grid-stabilisation services. These capabilities are typically delivered faster, more cleanly and at lower cost than conventional power plants. VPPscreate value for multiple stakeholders in the energy sector, including utilities, energy retailersand grid operators. They also unlock new value streams for DER manufacturers and providefinancial benefits for households.

In Europe, there were an estimated 3.3 million residential DERs connected to VPP softwareplatforms at the end of 2025. Smart heating is estimated to be the largest DER category in termsof the number of units followed by EV charging and home battery storage systems. The totalflexible capacity of these DERs reached 9.0 GW at the end of 2025. In North America, there werean estimated 10.6 million residential DERs connected to VPP software platforms at the end of2025. Smart thermostats are estimated to be the largest DER category, accounting for the vastmajority of the assets. Home battery storage systems and EV chargers are estimated to accountfor smaller shares. The total flexible capacity of these DERs reached 13.9 GW at the end of 2025.

A number of companies develop and provide VPP services. This report focuses on Europeanand North American companies that develop software solutions for aggregating residentialDERs, providing various grid support services and enabling participation in wholesale energymarkets. The report also includes companies that develop software and hardware solutions thatenable other companies to provide these services. The former group includes specialists suchas Renew Home, EnergyHub, Uplight, Voltus, Voltalis, Kraken, Axle Energy and Flexa; DEROEMs and installers such as Tesla, Sonnen, Lunar Energy and 1KOMMA5°; and energy retailersand utilities such as Tibber, Frank Energie and David Energy. Companies developing tools andplatforms that enable utilities and other companies to provide VPP services include Beebop.ai,Ensek, Eniris, Kiwigrid, Enode, Virtual Peaker and GridX, among others. In terms of the numberof connected DERs, US-based Renew Home and EnergyHub rank as the leading players in NorthAmerica, while France-based Voltalis and UK-based Kraken rank as the largest players inEurope.