How Utilities Are Deploying Powerwalls to Deliver Customer Resilience and Grid Services

Utilities are increasingly turning to home batteries as a faster, lower-cost way to strengthen the grid. By connecting thousands of Powerwall households, utilities can form a Virtual Power Plant (VPP) that delivers the same flexibility and reliability as a traditional power plant, without emissions or infrastructure costs.  

Most VPP programs today use a Bring Your Own Device’ model, where customers own the batteries and compensate customers for the grid services they provide. Programs like ConnectedSolutions in New England have proven that this customer-owned approach can mobilize large amounts of distributed capacity quickly.  

Some utilities see value in pursuing VPP program models that are based on utility ownership. Depending on the design of the program, some advantages of this “utility-owned” model includes allowing utilities to directly control distributed energy resources, target installations in high-value areas, and deliver resilience as a service to their customers. There are a few current examples of utility-owned Virtual Power Plant programs. 

Why Utilities Are Choosing Ownership

Utility ownership can help lower electricity rates by using batteries for grid services and ultimately reduce costs for all customers while improving reliability.

Peak Capacity Management

Peak demand periods, like on a hot summer afternoon, are when electricity is most expensive and often generated from less efficient, dirtier power plants. By aggregating the power from customer batteries, a utility can discharge the stored energy to meet high demand, which reduces capacity obligations and the need to purchase expensive power. Like a “Pay For Performance” model, the cost savings from utility ownership are also passed on to all customers, helping to lower rates.

Energy Arbitrage and Market Participation

Utilities can use the batteries to buy power when it's cheapest—often during off-peak hours or when there's a surplus of renewable energy—and then sell it back to the grid during high-demand, high-price periods. This "arbitrage" generates revenue and saves costs, which can then be used to offset rates. Additionally, these assets can provide advanced services like frequency regulation further supporting monetization within markets, thereby lowering costs for all ratepayers.

Locational Services and Reliability

The stored energy can be used to support local grid needs. This improves the overall reliability of the electric system and can help defer or avoid costly upgrades to transmission and distribution infrastructure. These avoided costs are reflected in lower rates for everyone. Together, these advantages make the utility-owned model a compelling complement to customer-owned programs, especially for utilities seeking to lower costs and accelerate resilience across their service territory.

Tesla VPP – Utility Ownership Case Studies

With customer-sited battery storage programs, utilities can install home battery storage within weeks near load centers. Below are three utility-owned battery storage program models, which offer unique benefits to households, communities, and utilities.

Poudre Valley REA: Free Powerwalls for Members

Poudre Valley REA is offering its members a completely free multi-Powerwall system through the PVREA Owned Battery Program. By joining this program, these Powerwall units will dispatch stored energy to the grid when needed and provide members with backup power if the grid goes down. PVREA members get the opportunity to experience home battery storage while adding resiliency to the grid, helping PVREA achieve its Virtual Power Plant goals and manage electric demand cost for its community.

Green Mountain Power: Scaling Utility-Owned Storage

Green Mountain Power (GMP) in Vermont has installed nearly 9,000 utility-owned Powerwalls, creating one of the largest distributed storage fleets in the U.S. and saving millions of dollars for its customers. The program is regularly reviewed and approved by the Public Utility Commission to continue investments and reach more customers. The net positive benefits for all GMP customers include:

• Peak Shaving: This is a substantial source of value for all customers, as the energy storage program is part of GMP’s growing Virtual Power Plant. In summer 2025 GMP deployed its VPP, saving all customers $3M.
• Frequency Regulation: The program includes value from frequency regulation and energy arbitrage. Tesla has been providing regulation services in ISO- New England since 2020. The round-trip response time from when a new dispatch signal is sent to the Powerwall fleet and when a response is reflected in telemetry is 4 or 5 seconds.
• Other Benefits: Based on real-world experience and technology improvements, the modeled useful life of the systems has been extended to 20 years. A transmission and distribution deferral benefit is now included in the financial model as well.
   

Since 2019, the systems have provided over 225,000 hours of backup power during more than 45,000 outage events.¹ Customers who lease the Powerwall battery systems get the benefit of resilience when there is a grid outage. The ESS program allows customers to lease a whole-home energy storage system, which includes a Powerwall battery system. Customers can choose a payment plan of either $55 per month or a one-time amount of $5,500. The initial lease term is 10 years, with an option for a cost-free five-year renewal.

GMP’s program demonstrates how regulated utilities can combine backup power, market participation, and long-term cost reduction in one integrated platform.²

Holy Cross Energy’s Power+ Program: An Interest Free Payment

Colorado’s Holy Cross Energy (HCE) pioneered the Power+ program, allowing members to install battery systems with zero upfront cost. HCE owns and maintains the batteries for up to 10 years, while members repay the system cost interest-free through their utility bill. After the loan is fully repaid, ownership of the battery is transferred to the member.

In exchange for low-cost backup power, members agree to allow Holy Cross Energy to remotely control the batteries. Holy Cross Energy will not operate the batteries more than 10 times a month and will keep a minimum of 20% charge for the homeowner's use. Members can save up to 50% compared to purchasing a system outright, while the co-op reduces its reliance on fossil powered peaker plants and moves closer to its goal of 100% clean energy by 2030.

As of early 2025, the program reached its full capacity with over 800 battery packs across more than 200 residential locations.³ With the program now at full capacity, Holy Cross Energy has rolled out a new program called Power+FLEX.⁴ While there is no longer the Power+ option, members can still score big upfront rebates and on-going performance incentives to help offset the cost of their storage system.

Powerwall as a Grid Resource

Each Powerwall transmits real-time telemetry every 60 seconds—three times faster than AMI 2.0 metering. This high-resolution data allows utilities to monitor performance, predict load, and dispatch fleets with sub-minute accuracy. Utilities can integrate thousands of Powerwalls into multi-megawatt VPPs near customer load centers, optimizing both reliability and cost. When outages occur, the same systems automatically provide backup power to the host homes.

Learn about the Tesla VPP