August 6, 2025
The demand flexibility ecosystem is evolving fast – and with it, new opportunities for companies providing smart home and building solutions. By developing their own virtual power plant (VPP) solutions, these companies can unlock new recurring revenue streams, create new value for their customers, and play a meaningful role in creating a more resilient electric grid.
But VPPs don’t turn on with the flip of a switch: it takes a solid understanding of the grid program landscape, the right technical capabilities, and a forward-thinking approach to enrollment and distributed energy resource integration. Here are the essentials that smart home and building solution providers need to know in today’s VPP landscape:
Who Can Participate in VPPs?
VPP participation is no longer just for energy specialists. Across both the residential and commercial markets, a wide range of companies are entering the space. At Leap, we typically work with companies that bring either access to energy-using assets or the ability to control those assets during grid events — or, in many cases, both. In some partnerships, those capabilities are split between two entities: one providing the customer or device access, and the other enabling control or automation. This flexible model allows more companies to participate and collaborate across the VPP value chain.
In the residential market, smart thermostat manufacturers, home energy management platforms, and app-based IoT control systems are already playing a central role in VPPs. What’s new is that large consumer brands are starting to build out whole-home energy offerings within their apps, enabling customers to control HVAC systems, smart appliances, EV chargers, batteries, and more all in one place. For tech giants like Samsung SmartThings (powered by Leap), GM Energy, and GE SmartHQ, VPP participation is becoming a natural extension of those home ecosystems.
On the commercial and industrial (C&I) side, VPPs are gaining traction among providers of building management systems (BMS), energy management systems (EMS), and other controls platforms. Companies like Leap’s partners GridPoint, Budderfly, and Phoenix Energy Technologies have layered grid services revenue on top of energy efficiency savings and other value streams for their facility customers.
Meanwhile, commercial device manufacturers (think Carrier, Copeland) are launching their own VPPs with equipment like HVAC and refrigeration; these systems typically have high power consumption and strong curtailment potential, making them excellent candidates for grid services.
Get Ahead of Enrollment
One of the biggest missed opportunities in VPP participation happens at the point of sale. The best time to enroll a customer in a grid services program is right when they’re buying their device or solution.
Forward-thinking providers are embedding grid services enrollment directly into their apps and product onboarding flows. This significantly improves customer participation rates and helps ensure a steady stream of devices are ready to earn revenue during grid events. For companies, it’s a way to deepen customer engagement and build stickier recurring revenue models.
Assess Curtailment Capabilities
One of the most important things to understand before participating in a VPP is how much load your devices or buildings can actually curtail. Many grid services programs have minimum load thresholds for participation, which can exclude smaller individual assets.
Smart thermostats, for example, only provide a small kilowatt reduction per device. However, when aggregated across thousands of homes or sites, the grid impact adds up quickly. This is where platforms like Leap can help by aggregating resources across multiple technology providers to meet program thresholds.
Beyond curtailment potential, it’s also critical to understand how often and for how long your device can adjust load. Some grid programs require several hours of participation at a time; others call for quick, 30-minute or 1-hour dispatches. These technical parameters are important for assessing program fit, building baselines, and submitting accurate nominations in order to optimize your VPP performance.
Understand the Grid Program Landscape
Grid services programs vary widely in their design and requirements. Selecting the right programs for your assets and customers is key.
For example, HVAC systems are critical to occupant comfort, so participation with this load type often centers on emergency grid services programs that only require curtailment during major grid stress events. Some programs also require 6-12 hour dispatches in order to qualify for participation, which isn’t a good fit for most home and building loads.
However, we’re also seeing the introduction of new, innovative programs that support smaller, device-level participation. These programs often have low capacity minimums and shorter dispatch windows, which makes them ideal for smart thermostats, connected appliances, and other smaller assets.
The growing diversity of grid programs means there’s a place for many types of devices, but you need to carefully assess which ones align with your technical capabilities and customer use cases. Leap helps our partners evaluate these options and match devices with the right program opportunities.
Watch Where the Market is Headed
The line between “smart home/building” and “energy resource” is quickly blurring. We’re now seeing batteries paired with HVAC, EV chargers integrated into energy management platforms, and the emergence of unified, grid-responsive building ecosystems. The rise of multi-device participation within a single site is accelerating this trend, allowing every controllable asset to contribute to grid services.
As larger tech brands deepen their involvement in the energy space, we’re seeing increased competition to “own” the customer meter. Many are working to centralize the smart home experience within their own apps, aiming to reduce the need for customers to toggle between multiple platforms for different devices. Early adoption of grid services is becoming a strategic advantage in this race to consolidate control and add value across the entire home ecosystem.
For device makers, software platforms, and commercial building solution providers, the message is clear: grid services are no longer a niche add-on. They’re becoming a core feature of what it means to be a smart, connected, energy-aware product or platform.
