Tesla, Sunrun, Renew Home team up on massive 16GW virtual power plant

Three major companies in home energy, Tesla, Sunrun, and Renew Home, have agreed to link up home batteries and smart thermostats into what they call a virtual power plant: a network of home devices that can be turned down or tapped for power together, acting like a backup power source for the grid. Combined, they say they can offer more than 16 gigawatts of capacity, drawing on hundreds of thousands of home batteries and more than 8 million smart thermostats already installed in houses around the country. The goal is to help utilities handle surging electricity demand from data centers being built for artificial intelligence, without raising costs or straining the grid for everyday customers.

If you already have a Tesla or Sunrun battery, or a smart thermostat tied to Renew Home (which grew out of Google Nest's thermostat program), your device may already be part of one of these networks, or could be enrolled in the future. Participating usually means allowing your battery to discharge or your thermostat to adjust during hours when grid demand peaks, in exchange for payment. The companies say they've already paid out nearly $70 million to customers in these programs, though it's not clear yet how this new, larger partnership will change payouts.

The companies are focusing early efforts on regions with heavy data center growth, including northern Virginia and the mid-Atlantic grid run by PJM Interconnection, as well as California, Texas, and parts of the Midwest. A separate study found that if these programs prioritized lower-income households in cities like Atlanta, Memphis, Kansas City, and Columbus, participating homeowners there could save between $50 and more than $1,000 a year on utility bills.