December 24, 2025
It’s been nearly a year since I stepped into the CEO role at Leap and it’s certainly been an eventful one — both for our company and for the virtual power plant (VPP) industry more broadly.
Over the past twelve months, I’ve spent countless hours talking with Leap partners and other distributed energy industry leaders, discussing the businesses we’ve built to help facilitate a transition to a cleaner, more efficient electrical grid. Central to those conversations has been a set of shared pressures: policy pullbacks, tariff-driven cost increases, and — for the first time in several decades — increased electricity demand driven by electrification and AI.
Over that same time period, as the grid’s needs have changed faster than traditional solutions can meet, VPPs have continued to gain traction despite many of the operational and structural hurdles that remain.
The Shifting VPP Landscape
Several clear shifts are underway, each pointing to how the VPP market is evolving and where it still needs to catch up to the needs of our electricity system.
Energy security is driving DER adoption.
Residential and commercial customers aren’t investing in batteries, EVs, or smart building systems just to reduce emissions. They want control over their energy costs and protection from outages in an increasingly volatile grid environment. As awareness of grid vulnerability grows, connected energy technologies are shifting from optional upgrades to essential assets. VPPs are the mechanism that allows these individual investments to deliver system-level value.
VPP incentives are increasingly driving new hardware sales.
As federal tax incentives become less reliable, technology providers are leaning into performance-based value. Demand response and other grid services revenues are now core to the business case for many distributed energy resources. At Leap, many of our partners are using our platform to bundle VPP incentives into their offers and enroll customers into grid services programs at the point of sale. At RE+, Distributech, and DERVOS this year, I saw several vendors marketing hardware as being “VPP Ready.” Providers understand that recurring VPP revenue streams can help make new hardware pencil and the entire industry is thinking creatively about how and where to unlock new funding sources.
Data access and market enrollment remain the biggest bottlenecks.
Millions of DERs are technically capable of participating in VPPs today, yet in too many cases enrollment remains slow, fragmented, and overly manual. Utilities still tightly control access to smart meter data. Program designs vary widely across jurisdictions. Communication protocols and data standards are inconsistent at best. These are not technology limitations but they are structural and process ones. Until we address them, scaling VPPs across markets will remain harder than it needs to be.
Why Data Centers Change Everything
AI and data centers have become central to nearly every energy conversation, and for good reason. They represent load growth that is unprecedented in its scale and speed. In many regions, traditional generation and transmission timelines just can’t meet new demand.
There’s understandable excitement around the growth opportunities this creates. At Leap, we’re actively working to deploy VPP capacity in ways that help accelerate data center development, as my colleague Thomas Folker recently wrote about.
But data centers are more than just another source of load. They are a forcing function.
When gigawatts of demand are waiting on interconnection, long-standing inefficiencies become unacceptable. The same issues that have slowed VPP scale for years — restricted data access, cumbersome enrollment processes, and rigid program rules — are now directly blocking economic development. As developers and utilities scramble to identify new capacity, we must shift attention to what’s already available: millions of distributed assets that can be aggregated, dispatched, and monetized today.
Solving these challenges to support data center growth will do more than bring new load. It will accelerate the structural changes VPPs need to scale across the grid.
This is where Leap’s experience matters. We’ve been building and operating large-scale virtual power plants since our founding in 2018. Today, we aggregate hundreds of thousands of distributed energy resources across residential and commercial use cases, working with more than 100 leading technology companies. That scale and the diversity of assets behind it allows us to deliver the critical mass and operational reliability utilities and developers need.
Building Capacity — and Doing it Equitably
Virtual power plants deliver clear benefits to communities. They create new revenue streams for households and businesses that choose to participate, often making energy-saving technologies more affordable and more accessible. They reduce reliance on fossil-fueled peaker plants. And they help utilities manage peak demand without passing the cost of infrastructure upgrades on to ratepayers.
Just as importantly, VPPs shift value creation outward. Instead of concentrating investment and returns in a small number of centralized assets, they allow millions of customers to participate directly in grid reliability. When designed well, VPP programs don’t just lower system costs, they broaden who benefits from the energy transition.
That matters as data center demand accelerates. Meeting this growth solely through traditional infrastructure would lock in higher costs and deepen inequities. VPPs offer a different path: one that is cleaner, faster, and more inclusive.
Data centers may be the catalyst, but the opportunity extends far beyond them. The work we do now — modernizing enrollment, expanding access to data, and scaling VPP participation — will define how flexible, equitable, and resilient the grid becomes. Leap is committed to leading that work, alongside our partners, for the benefit of all Americans.
