The United States has dramatically expanded its virtual power plant (VPP) capacity, which reached 37.5 gigawatts (GW) over the past year, according to a new report from Wood Mackenzie. This marks a 13.7% annual increase, demonstrating strong growth in VPP deployments as the energy sector moves toward more flexible, distributed power solutions.
VPPs aggregate distributed energy resources – such as rooftop solar, battery storage, electric vehicles, and smart appliances – into networked platforms managed by utilities or energy service companies. These coordinated resources help balance supply and demand, especially during periods of grid stress or peak pricing. The number of VPP deployments in North America soared 33% year-over-year, with 1940 active sites, while the number of market and utility programs monetised grew more than 33% as well.
However, capacity growth has lagged behind deployment activity, highlighting ongoing challenges. Regulatory barriers such as utility program caps and reforms in capacity accreditation have slowed deeper capacity gains, despite surging interest from companies and end-users. Nevertheless, the sector continues to mature, with residential customers’ share of VPP wholesale market capacity increasing to 10.2%, up from 8.8% last year. Battery storage and electric vehicle adoption are also accelerating, with 61% as many deployments using these technologies as those relying on traditional smart thermostats.
Leading states for VPP adoption include California, Texas, New York, and Massachusetts, collectively representing over a third of all US deployments, with the largest capacity being procured in regions facing substantial new data center demand. As pressure mounts on the grid from new loads and as clean energy integration becomes imperative, VPPs are playing an increasingly central role in providing grid flexibility and reliability.
