Tesla to Launch Virtual Power Plants in Texas, Puerto Rico

June 26, 2023 by Shannon Cuthrell

Tesla will soon offer virtual power plant programs for Powerwall customers in Texas and Puerto Rico, according to a recent confirmation by an executive at the company. 

Drew Baglino, senior VP of powertrain and energy engineering at Tesla, has confirmed that the company’s home energy storage business will soon add virtual power plant (VPP) services in Texas and Puerto Rico—allowing Powerwall owners to earn money by supplying backup power to the local grid during emergencies. 


An outdoor Tesla Powerwall unit

An outdoor Tesla Powerwall unit. Image used courtesy of Tesla

Baglino wrote on Twitter that the offering would soon be rolled out to Tesla Electric customers in Texas. The electric vehicle maker is testing its initial set of VPP services with the Electric Reliability Council of Texas this month, and it plans to start paying out the first VPP credits to Powerwall customers in July. 

In a separate tweet, Baglino said Tesla is working with LUMA Energy, Puerto Rico’s power distribution and transmission provider, to activate a VPP for all Powerwall customers in the country this summer. He also confirmed that Tesla has over 350 megawatts of Powerwalls that could help supply overnight power for a recent grid shortage. 

Puerto Rico already has a sizable Powerwall customer base, representing an underutilized resource that could have prevented outages across the grid as a heat wave sent demand skyrocketing earlier this month. Tesla said last year that 44,000 homes in Puerto Rico used their Powerwall for emergency power over an average of five days when the grid went down in a hurricane. 

This is the basic selling point of VPPs, connected networks of distributed energy resources that integrate renewables (such as rooftop solar panels) and provide demand flexibility in coordination with utilities. Owners of Tesla’s solar panels/roofs and Powerwall systems can essentially serve as energy providers and earn money by opting into the VPP program and resupplying the grid. 


VPP Coming to Tesla Electric Customers in Texas

The Texas VPP offering will be available to participants of the Tesla Electric power plan, which allows Powerwall owners to export power when electricity market prices are high and get bill credits for supplying power back to the grid. Tesla offsets all the energy customers purchase with renewable energy sources in Texas. 

Currently, Tesla Electric retail plans are invitation-only. But Baglino’s comments suggest a significant expansion as the company broadens its service offerings. 


Tesla Electric user interface

Screenshots from the Tesla app show the Tesla Electric user interface for customers in Texas. Images used courtesy of Tesla


VPP in California Serves as Blueprint for Expansion

Tesla already has a track record with a successful VPP in California. It launched an opt-in beta program in 2021 for California customers in anticipation of grid emergencies over the summer. Tesla Powerwall and solar system owners across three utility service providers—Pacific Gas and Electric Company (PG&E), San Diego Gas & Electric, and Southern California Edison (SCE)—were able to provide extra power from their Powerwall to help reduce blackouts. 

After the pilot program, Tesla partnered with PG&E to launch its first full-scale VPP in northern California, later expanding to SCE customers. The VPP is now available in most areas of the state, offering $2 per kilowatt-hour (kWh) of Powerwall contributions in emergency events. 

The program has charted consistent growth since its launch, with customers earning hundreds of dollars in the first year, according to Electrek. 

According to data from Lastbulb, 6,963 homes were connected to the Tesla VPP network in California as of late-May 2023. Around 577 megawatt-hours (MWh) of power was supplied during emergency grid disruptions in 2022, including last September’s record-breaking heat wave, with each home contributing an average of 15 kWh per event. 


Tesla’s virtual power plant network in California charts consistent monthly growth

Tesla’s virtual power plant network in California charts consistent monthly growth. Image used courtesy of Lastbulb


Before the California program, Tesla launched its first VPP in Australia in 2019. The program gives Powerwall owners competitive energy rates, $1,000 in credits for signing up within 30 days of installation, and additional grid support credits on their monthly bills.