As residential solar became widely available in Texas in the late 2010s, many homeowners installed panels on their properties to take advantage of new buyback programs. Under these programs, retail electric providers would purchase solar power from homeowners when it was available in exchange for power when it was not, all at a one-to-one rate. 

But as Regan George, CEO of virtual power plant company Solrite Energy, explains, the increased penetration of renewables in ERCOT has disincentivized providers from purchasing solar power from homeowners. Because electricity is significantly more expensive to produce after dark than at noon, it no longer makes economic sense for a provider to offer a flat rate for power that is cheap and plentiful during the day in exchange for power that is costly and scarce at night. 

So as those original electricity contracts, which in Texas average about three years in length, began to expire, homeowners with installed solar on their property found themselves in a much different market. 

“Homeowners are looking for a new buyback program, because their current one has expired, but they’re not finding it in the market,” George told Latitude Media. “So the initial savings that they were expecting from putting solar on their roof are evaporating.” 

They’re what George calls “solar orphans”: a class of frustrated customers Solrite aims to “rescue” with its new initiative. Today, in collaboration with German battery and VPP company sonnen, Solrite announced the launch of a battery-only VPP program. 

The program offers stranded solar owners, as well as homeowners with no solar assets at all, the opportunity to install a 60 kilowatt-hour battery system for a $20 monthly fee. This initiative is a continuation of the “VPP power purchase agreement” financing model Solrite and sonnen have utilized since early 2024 for solar plus storage assets. Under this structure, Solrite retains ownership of the batteries, allowing the company to earn money by providing grid orchestration services to electricity providers. In exchange, homeowners receive the benefits of onsite backup power and a 12 cents per kWh retail energy rate, which is lower than the current Texas average of 15 to 16 cents.

With its battery-only offering, Solrite joins a growing number of companies aiming to capture a massive market opportunity. As Kunal Girotra, founder of home battery startup Lunar Energy, recently told Latitude Media, less than 1 million of the 75 million U.S. homes are equipped with battery storage. Other players in the space include Lunar Energy itself, Tesla, and Texas-based Base Power, which announced $1 billion in funding last October. 

The battery system

As Blake Richetta, CEO of sonnen’s U.S. subsidiary, notes, Solrite’s key differentiator is in the size of the battery systems it installs.

“We’re all heavy and big — about five feet tall, a couple of feet deep, and a couple of feet wide,” he said, noting that a 60 kWh system is made of three such batteries, at 20 kWh each. That is three to six times larger than what the majority of the other companies typically offer homeowners. Base Power, which offers the next largest option, has a standard 25 kWh battery, which can be scaled up to 50 kWh in its advanced solution. 

“We do… a massive 60 kWh reservoir of batteries at the homes to store not just all the electricity that is created by the solar panels,” George said. “But it leaves us the option of charging the batteries at times when other very inexpensive sources of electricity are prevalent, like when the wind farms are blowing in the middle of the night in Texas.” 

Size aside, George said sonnen’s batteries have been designed specifically for VPP participation, which means they are able to respond quickly to grid signals, and that they can weather additional charge and discharge cycles well. (This makes them also “very expensive,” George added.) Sonnen has been developing them for VPP applications in Europe, where in some countries they get dispatched for an average of 2.7 full cycles a day. 

“Full cycles, boom: up, down, up, down, halfway up, down,” Richetta said. “This is very abusive to a battery electrochemically, so we built our battery specifically for this.” 

With Solrite, sonnen is now “Americanizing” its batteries for the U.S. market. Grid requirements in the United States are currently less demanding than those in Europe, where some programs require a battery to respond in as little as two and a half seconds, compared to the 10-minute window common in the U.S. European batteries, meanwhile, are rarely designed to provide the backup power that U.S. customers want and need. 

But even with the U.S. adjustments, the fact that sonnen’s batteries were built for VPP applications enables a degree of grid orchestration that is central to Solrite’s financial success.

Reverse demand response

And while for a homeowner installing both solar and batteries is still the ideal situation, a battery-only offering expands the market, including for the many people who do not have a property fit for solar panels. This creates the possibility of swarms of battery-only systems that charge when there’s excess power on the grid; this is currently the case in Germany, where wholesale electricity prices go negative when there’s a lot of wind power at night, especially in winter. 

“It’s reverse demand response — demand meets supply; instead of supply meeting demand, we time shift it to the next day,” Richetta said. “It’s a beautiful load shaping exercise. Because ERCOT is deregulated, with this battery-only fleet, I can respond to the price signals in ERCOT when wind is overproducing, or at two in the morning when nuclear is producing, and there’s no load.”

George and Richetta declined to elaborate on what they described as the “innovative” financial model that is supported by sonnen batteries’ engineering, as well as on the way the company is financing these “very expensive” batteries. But the market is booming. “Our only limiting factor is how many electricians we can hire and train to install these batteries,” George said. 

They expect the program, which has roughly 500 customers so far, to grow to 10,000 new customers by the end of 2026, including those signing up for Solrite’s more traditional solar-plus-storage offering. ERCOT, which is one of the country’s leaders in terms of VPP installations, as well as one of the regions with the greatest disclosed VPP offtake capacity, is the obvious starting point. That said, the two companies “will be announcing more markets that are coming online in the next couple of weeks,” George said.