Amber Electric explained: What Is a VPP and Why It Matters for Solar Owners

Major Benefits

Virtual Power Plants (VPPs) are becoming one of the most important conversations in Victoria’s solar community, especially alongside options like the solar rebate in Victoria. People keep hearing about Amber Electric, SmartShift, wholesale pricing and “earning more from your battery,” but most don’t know how it actually works or whether it’s genuinely worth it compared to traditional rebates. And that’s exactly where this guide helps.

Read on to know what a Virtual Power Plant does, how Amber’s model is different from the typical VPPs on the market and what solar households should think about before joining. Let’s get started!

Table of Contents

What is Virtual Power Plant (VPP)?
How Amber’s VPP Works
Why Should Solar Owners Care About Amber Electric VPP?
What to Consider Carefully Before Joining Amber’s VPP
Conclusion
Frequently Asked Questions

What is Virtual Power Plant (VPP)?

A Virtual Power Plant is a network of solar systems and batteries that work together using smart software. Instead of one large power station producing electricity, thousands of small systems across homes combine to behave like a single power plant.

The “virtual” part comes from the fact that they are connected digitally, not physically.

The energy moves through each home, but the control signals come from intelligent software that knows when the grid needs support or when certain market conditions make it worthwhile to charge or discharge a battery.

What a VPP Does?

A VPP performs a few key actions:

It charges batteries when electricity is cheap or abundant.
It discharges batteries when electricity is valuable or when the grid needs support.
It coordinates energy activity across many homes.
It turns household solar + battery systems into a flexible resource for the grid.

When many homes participate, the combined capacity becomes powerful enough for the grid operator to rely on for balancing the energy system.

Why Are VPPs Important in Australia?

More than 3.6 million homes in Australia have rooftop solar panels. That's more than any other country in the world. Hence, we have one of the highest rooftop solar penetration rates in Australia. This means that on sunny days, the grid can actually receive more solar energy than it needs. It creates times when electricity prices drop very low and sometimes even go negative. At the same time, evenings or cloudy days can see steep price spikes when demand jumps.

A VPP helps smooth this out by shifting how batteries behave:

Charging during the middle of the day when excess solar floods the grid.
Discharging during evening peaks to support the grid.
Reducing pressure on certain local areas of the network.
Making sure each battery adds value at the right moment.

Because Victoria has such a dynamic mix of solar, storage and changing demand patterns, VPPs have become an essential part of how the energy system evolves.

What is Amber’s VPP?

Now that you understand what a VPP is, let’s talk about Amber’s version of it. Amber Electric takes a very different approach compared to traditional retailers. Instead of fixed feed-in tariffs, Amber gives customers access to wholesale electricity prices and uses automation to move battery energy at the best times.

Amber’s VPP is part of SmartShift, the company’s software that controls battery charging and exporting. This means the VPP is not a standalone program. It’s the automated behaviour built into Amber’s real-time energy model.

How Amber’s VPP Works

Amber Electric gives solar customers full exposure to the wholesale electricity market. Prices update every 5 minutes based on supply and demand. Sometimes prices surge. Sometimes they drop. Occasionally, they go below zero.

Amber’s VPP uses SmartShift to respond to these price movements automatically.

Simply explained, here’s what it does!

SmartShift watches live wholesale prices
It predicts when prices will rise or fall
It predicts how much solar you will generate
It decides when your battery should charge or export
It does this in real time without you lifting a finger

This automation is what forms the core of Amber’s VPP. Instead of paying a fixed feed-in tariff regardless of timing, SmartShift sends energy out precisely when the value is highest.

How Does Amber’s SmartShift Operate?

SmartShift runs predictions every few minutes using data from:

The weather
Qholesale price forecasts
Your home’s usage patterns
Your solar generation
Grid behaviour
Battery constraints and health settings

It then chooses the most valuable behaviour for your system:

Charge during cheap periods
Hold power for upcoming price spikes
Export during high-value events
Avoid over-discharging
Protect battery longevity

Think of SmartShift as a personal energy optimiser for your home. It makes decisions based on data you don’t normally see and it does it automatically.

Why Should Solar Owners Care About Amber Electric VPP?

Solar homes often reach a ceiling in savings once the battery charges by midday. After that, most systems sit idle. Amber’s VPP changes this by using your battery strategically across the day and extracting value where the market pays the most.

Here is why solar owners should pay attention:

1. It unlocks value that fixed feed-in tariffs can’t, often exceeding the solar rebate in Victoria

Wholesale prices occasionally jump far above standard export rates or rebate amounts. These high-value windows usually occur during evening demand peaks or unexpected grid strain. SmartShift identifies these moments and exports automatically, helping your battery earn significantly more than it would under a flat tariff or basic rebate.

2. It keeps your battery productive every day.

Instead of sitting full from midday, your battery cycles intelligently. This improves the economic return of your system without compromising your reserve settings. The sense of waste disappears because your system works continuously, not passively.

Together, these factors make Amber one of the most compelling VPP options for solar owners who want a system that works harder and earns more.

What to Consider Carefully Before Joining Amber’s VPP

Before you tie your solar + battery system to Amber’s VPP (SmartShift), there are some very real factors worth weighing.

1. Income and Cost Might Fluctuate Because of Wholesale Price Exposure

Amber passes through actual wholesale rates for both the electricity you import and the energy you export. That’s the core of its strength. It also means that:

On days with high demand or supply-demand tightness, export value can spike sharply. Those rare events may reward you generously.
On quiet days or when supply is high (lots of solar across the grid), prices can drop sometimes to very low levels. If your battery exports, then returns may be modest.
Meanwhile, you pay a fixed monthly subscription fee for access to wholesale pricing and SmartShift automation.

Because of this dual dynamic, your monthly savings (or earnings) may vary from month to month.

2. System and compatibility requirements

To access SmartShift, your home must meet several technical criteria:

You must be an Amber retail customer. SmartShift works only with Amber’s electricity plan.
You need a smart meter configured for solar exports.
Your battery and inverter must be on Amber’s approved compatibility list. Supported brands include leading names like Tesla, AlphaESS, Sungrow, SolarEdge, BYD (among others).
Stable internet and proper system connectivity must be maintained to ensure automation commands are delivered reliably.
Your system must not already be part of another optimisation/VPP program. Dual participation isn’t allowed.

3. Long-term automation might increase battery cycling, so consider longevity and warranty

SmartShift optimises your battery around wholesale prices, which means the battery may cycle more often than it would under a simple self-consumption setup or a fixed feed-in tariff plan. This depends heavily on your system size, your daily energy use and how the wholesale market behaves in your area.

More cycling does not necessarily mean premature wear, because modern lithium batteries are built to handle a large number of cycles. However, more frequent activity can contribute to gradual ageing over time and it may bring the system closer to certain warranty thresholds if your usage patterns are already on the higher end.

Conclusion

An Amber Electric’s Virtual Power Plant rewards people who value transparency, flexible automation and the chance to earn more from the system they already own. It’s built around wholesale pricing, automated battery behaviour and a more active role in stabilising the grid. That naturally comes with a learning curve, but also with opportunities that fixed tariffs don’t always capture.

The real question is not whether Amber’s VPP is “better” or “worse” than other approaches. It’s whether this style of control, automation and market-facing optimisation matches how your home uses energy and how you prefer to manage your system. Some households want predictability. Others want transparency and the chance to extract value when the market swings. Both are valid positions.

If you understand how SmartShift behaves, how cycling affects your battery over time and how wholesale prices move across a typical year, you’ll make a clearer decision than someone chasing headlines or quick wins.

Frequently Asked Questions

1. What is a Virtual Power Plant in simple terms?

It is a software platform that links many home batteries together and controls them as one large power source. It charges and discharges these batteries when the grid or electricity market needs them.

2. How does a VPP help the electricity grid?

It provides extra support during high demand or unstable conditions. Instead of firing up a gas peaker, the grid can draw small amounts of energy from thousands of home batteries.

3. What makes Amber Electric’s VPP different?

It uses wholesale pricing signals through SmartShift. Instead of set export behaviour, it responds to real-time price movements to charge or export the battery.