VPP POLICY PRINCIPLES

This policy brief, authored by the VP3 Regulatory and Policy Strategy Working Group and published by RMI, establishes a set of foundational policy principles designed to enable the growth and integration of virtual power plants (VPPs). The document outlines 17 principles across five key areas—DER asset base, VPP design, equitable compensation, customer experience, and utility/system operator roles—to guide policymakers and energy industry stakeholders in creating a fair and efficient environment for VPPs over a one-to-four-year horizon.

• Scaling VPPs requires a robust policy framework to accelerate the deployment of distributed energy resources (DERs) across all customer types, including low-to-moderate income and historically disadvantaged communities. Recommended policies to drive this adoption include tax credits, rebates, utility financing, and dynamic tariffs.
• VPP design should be technology-neutral and based on established best practices to ensure scalability and interoperability. This includes the adoption of open communication protocols and standards to allow seamless integration of DERs regardless of the vendor or technology type.
• To ensure VPPs can compete with traditional grid solutions, they must have non-discriminatory access to wholesale and retail markets. This includes the ability to 'value stack,' or provide and be compensated for multiple grid services simultaneously, provided there are clear rules to prevent double-counting.
• Compensation for VPPs must accurately reflect the full suite of benefits provided to the system, including contributions to resilience, reliability, and sustainability goals like greenhouse gas emissions reduction. Furthermore, VPPs should not face penalties or liabilities that are unreasonable compared to traditional power providers.
• Customer-centric policies are essential, specifically regarding data ownership, operational control, and transparency. Customers should own their data and have the choice to maintain control of their DERs or delegate management to a utility or third-party aggregator under transparent terms.
• Utilities and system operators should embrace partnerships with competitive third-party hardware and service providers to minimize implementation costs. This includes using open-source software and providing timely, secure access to grid data to support measurement and verification (M&V) processes.

APA

RMI (2024). VPP POLICY PRINCIPLES. https://rmi.org/wp-content/uploads/dlm_uploads/2024/02/vpp_policy_principles_updated.pdf

Chicago

RMI. VPP POLICY PRINCIPLES. 2024. https://rmi.org/wp-content/uploads/dlm_uploads/2024/02/vpp_policy_principles_updated.pdf.

Wikipedia

{{cite report |author=RMI |title=VPP POLICY PRINCIPLES |date=February 2024 |url=https://rmi.org/wp-content/uploads/dlm_uploads/2024/02/vpp_policy_principles_updated.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2024vpp, author = {{RMI}}, title = {{VPP POLICY PRINCIPLES}}, institution = {RMI}, year = {2024}, month = feb, url = {https://rmi.org/wp-content/uploads/dlm_uploads/2024/02/vpp_policy_principles_updated.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }