Virtual power plant capacity growth in the United States reached 13.7% last year
A virtual power plant links together many small resources already in homes and businesses, batteries, thermostats, electric vehicle chargers, water heaters, so a utility can call on all of them together, the way it would call on one actual power plant, without building new generation. Capacity is the maximum amount of power those linked resources can supply at once. Virtual power plant capacity growth in the United States and Canada reached 13.7% last year, according to Wood Mackenzie, an energy research and consulting firm, which tracked the total at 37.5 gigawatts in 2025. A gigawatt is a unit of electricity supply equal to 1,000 megawatts. The number of companies offering these programs, the customers signed up and the programs that actually paid out each grew more than 33% in the same year, faster than capacity itself.
The federal target for virtual power plant capacity, and how much bigger it needs to be
The Department of Energy, in a January 2025 update to its Liftoff report series, put United States virtual power plant capacity then at 33 gigawatts, and set a target of 80 to 160 gigawatts by 2030. The department states that range could cover 10% to 20% of peak electricity demand nationwide, the highest amount of power the grid must supply at once. Dividing that target by the capacity Wood Mackenzie tracks today, 37.5 gigawatts, gives a range of about 2 to 4 times the capacity in place now. That comparison is a calculation made for this article, combining a federal target with a market tracking figure, not a multiple either organization states directly.
This chart uses the Department of Energy own current estimate, 33 gigawatts, so the whole chart stays single sourced to source 1, even though the article body text leads with the more recent Wood Mackenzie figure, 37.5 gigawatts, per the section 3b ruling in the research file. The one thing this chart shows, the department 2030 target is far larger than its own current estimate, even at the low end.
Show the numbers
| Current estimate | 33 |
| 2030 target low end | 80 |
| 2030 target high end | 160 |
Why growth still is not fast enough, according to industry
Industry voices quoted in trade coverage say the pace still is not fast enough. The global head of grid edge at Wood Mackenzie pointed at rules rather than customer demand as the reason capacity lags behind interest in these programs.
Utility program caps, capacity accreditation reforms, and market barriers have prevented capacity from growing as fast as market activity.
The global head of grid edge at Wood Mackenzie, quoted in the company own 2025 North America virtual power plant report. Source 2.
20th century solutions will not build a 21st century grid.
Allison Wannop, vice president of regulatory affairs and wholesale markets at Sparkfund. Source 4.
Allison Wannop, vice president of regulatory affairs and wholesale markets at Sparkfund, a company that manages energy programs for large customers, made a similar point to Utility Dive. Jen Downing, a former Department of Energy senior advisor who helped write the Liftoff reports, told Utility Dive that virtual power plants can cut peak demand by up to 20% at a cost effective rate, though she does not expect them to replace power plants that run all day and all night.
What is running today, and where
Lawrence Berkeley National Laboratory, a federal research center, counted more than 790 programs nationwide that pay customers to cut power use when the grid is stressed or that combine home solar with batteries, and classified 180 of those specifically as virtual power plants. Within Wood Mackenzie own tracked total, homes made up a rising share of the capacity, 10.2% in 2025, up from 8.8% the year before. California, Texas, New York and Massachusetts together accounted for 37% of all virtual power plant programs launched so far.
The payoff if the target is hit, according to one projection
None of this is guaranteed yet. RMI, an energy research nonprofit, projects that if the buildout reaches the scale the Department of Energy wants, distributed energy resources could meet 60% of new United States electricity demand growth, cut electricity costs 20% and cut emissions 70%, according to its Power Shift report as reported by Latitude Media. The same projection puts household savings at 140 dollars a year and carbon dioxide savings at 12 to 28 million metric tons by 2035. These are projections tied to hitting the target, not results already measured.
These are projections from RMI research, reported by Latitude Media, tied to reaching the federal target. They are not measurements of results already achieved. The one thing this chart shows, the scale of the savings and emissions cuts tied to hitting the federal target, not results already measured.
Show the numbers
| Share of new demand growth met | 60 |
| Electricity cost reduction | 20 |
| Emissions reduction | 70 |