Scaling residential VPPs could cut electric bill increases by half: Brattle

A new report from The Brattle Group says devices already sitting in many homes — smart thermostats, batteries, and EV chargers — could meaningfully slow the rise in electric bills if utilities make better use of them. These devices can form what's called a virtual power plant, or VPP: a network of home equipment that utilities can briefly adjust (like nudging a thermostat a few degrees during a hot afternoon) to reduce strain on the grid at peak demand times, instead of building new power plants.

The report found that the top 10% of utility demand-response programs already achieve a 4% reduction in peak electricity demand this way. If utilities nationwide hit that same mark, it would more than triple the country's VPP capacity, from about 10 gigawatts to 35 gigawatts. That expansion could generate $4 billion to $7 billion a year in financial benefits for households — including nearly $1.9 billion paid directly to participating customers, with the rest spread across all ratepayers through lower costs. Brattle says this could cut expected bill increases for the average household by more than half over the next five years, at a time when residential electricity rates have already climbed 33% since 2019.

The report points to easier enrollment, especially through device manufacturers, as the main way utilities could unlock this. For homeowners, the takeaway is that a connected thermostat, home battery, or EV charger isn't just a convenience — it could become a source of bill credits if your utility offers a program that uses it.