September 26, 2025: North America’s virtual power plant market grew by nearly 14% over the past year to 37.5GW of behind-the-meter flexible capacity, according to latest industry analysis.
Many in the energy storage industry see VPPs, especially smaller decentralised ones, as the next step forward in the energy transition,

Wood Mackenzie said in a report, released on September 17, the VPP market broadened more than it deepened, with the number of company deployments, unique offtakers, and market and utility programs monetized each growing more than 33%.

However, the share of VPP wholesale market capacity from residential customers increased by just over one percentage point to 10%, reflecting continued market barriers to small customers.
According to the report, third-party data access for enrolment and market settlement are the primary blockers.

Meanwhile, the penetration of battery storage and EVs in VPP deployments continued, with 61% as many deployments including these technologies as those including smart thermostats, the incumbent technology.

California, Texas, New York, and Massachusetts were the leading states, representing 37% of VPP deployments. Meanwhile, regional eastern and southern power transmission companies PJM and ERCOT, the regions with the greatest utility commitments to datacenter capacity, also had the greatest disclosed VPP offtake capacity.

The top 25 VPP offtakers procured over 100MW each over the year, while over half of all offtakers increased the number of deployments under them by at least 30% compared to the previous year, according to the report.

Ben Hertz-Shargel, global head of grid edge for Wood Mackenzie, said: “Utility program caps, capacity accreditation reforms, and market barriers have prevented capacity from growing as fast as market activity.

“While datacenters are the source of new load, there’s an enormous opportunity to tap VPPs as the new source of grid flexibility.”