A home battery can do more than keep the lights on in an outage. In some utility programs, it can also earn a payment when the grid is under strain. Virtual power plant program payments vary by utility, so this post walks through one program with published numbers, Massachusetts ConnectedSolutions, and shows how the payment works, what participants have reported, what it takes to enroll, and how to plan around it. Other states, utilities and device types are not covered, because I could not confirm their figures.
How Virtual Power Plant Program Payments Work
Tesla describes ConnectedSolutions as a virtual power plant (VPP) program that has operated since 2019 under a pay-for-performance model. Households with home storage are paid for energy sent back to the grid during peak demand, and the payment is based on the energy actually delivered during events. Utilities pay aggregators for the total capacity delivered, and the aggregators compensate the participating households. Participants can opt out of events (Tesla).
Tesla contrasts this with traditional demand response, which asks customers to reduce usage, such as by adjusting a thermostat. A battery instead supplies stored power, so the result depends less on what the household does in the moment (Tesla).
The Massachusetts Residential Rules
Mass Save, the state’s energy-efficiency program, lists the residential battery terms below (Mass Save).
The Mass Save terms in the examples below are a rate of $275 per kW, a season from June 1 to September 30, event hours from 3 pm to 8 pm, up to 60 events per summer, and events of up to 3 hours.
The rate is paid on the battery’s average contribution during summer events. Events are signaled automatically by the Mass Save sponsor, occur on non-holidays, and the battery is asked to discharge stored energy during peak demand (Mass Save).
How the Payment Is Figured
National Grid’s battery program page, which is written for business customers, gives more detail on measurement. Incentives are based on the battery’s average kW performance during the summer period. Performance varies with system size, configuration, internet connectivity and other factors, and the incentive is reduced if the utility cannot communicate with the system or if the system cannot discharge when needed, for example because of a maintenance issue. The same page says customers have averaged about $1,200 per year, that the rate is locked for the first five summers of enrollment for new systems, and that customers can opt out of events at any time (National Grid). Tesla’s page also describes a five-year rate lock (Tesla).
Virtual Power Plant Program Payments: An Example With Assumed Numbers
The payment is the average kW multiplied by the rate. These sizes are assumptions chosen for illustration, not predictions, since actual credit depends on measured performance.
| Average kW | Summer payment |
|---|---|
| 3 kW | $825 |
| 5 kW | $1,375 |
| 10 kW | $2,750 |
Mass Save says a typical 5 kW battery can earn up to $1,375 a year (Mass Save). pv magazine USA estimated a range of $1,375 to $2,750 for residential participants, which is its own estimate (pv magazine USA).
What Participants and Totals Show
Tesla reports the following for its Powerwall customers in the Massachusetts and Rhode Island programs. These are Tesla’s own published figures, and the 2025 payout was marked TBD (Tesla).
| Metric | 2023 | 2024 |
|---|---|---|
| Powerwalls enrolled | 6,364 | 7,732 |
| Event participation | 99.8% | 97.3% |
| Average payout | $1,298 | $1,492 |
Participation was 95.4% as of July 1, 2025, with 8,289 or more Powerwalls enrolled. Tesla also says about 70% of eligible Powerwall households are enrolled, and that the average customer sets a 20% backup reserve and contributes the rest of the battery to the VPP (Tesla).
For the 2025 season as a whole, preliminary administrator data filed with the Massachusetts Energy Efficiency Advisory Council showed more than $5.4 million paid to 5,251 residential battery participants, according to pv magazine USA (pv magazine USA). Dividing those numbers gives a floor of about $1,028 per participant, since the total was reported as “more than” $5.4 million. That is my arithmetic, not a reported average.
Rhode Island Has a Different Rate
Tesla’s results page lists the 2025 incentive as $275 per kW for National Grid, Eversource and Cape Light Compact in Massachusetts, and $225 per kW for Rhode Island Energy, each with a five-year lock (Tesla). At the same assumed 5 kW, the Rhode Island summer payment would be $1,125, compared with $1,375 in Massachusetts.
Who Can Enroll and How
- Customers of Cape Light Compact, Eversource or National Grid, with an inverter under 50 kW. Larger systems go through the commercial program (Mass Save).
- The battery can be installed with a new solar system, added to an existing solar system, or installed standalone (Mass Save).
- Buy and install an eligible battery, then enroll through the battery manufacturer. Brands listed include Enphase, Emporia, Fortress Power, FranklinWH, Generac PWRCell, Outback/Sonnen, Panasonic, QCells, Sol-Ark, SolarEdge, Sunnova and Tesla (Mass Save).
- An internet connection to the storage system is required (National Grid).
- Mass Save lists 0% HEAT Loan financing of up to $25,000 for qualified home improvements, and says batteries are eligible (Mass Save).
Other Details Worth Knowing
- Clean Peak Energy Credits from participation go to the Mass Save sponsors and do not affect the customer’s incentive (Mass Save).
- National Grid’s business page says grid charging may limit eligibility for other incentives, such as SMART and the federal Investment Tax Credit (National Grid).
- On that same page, winter participation is optional, and winter events are not called if extreme weather is forecast, so batteries stay charged for a possible outage (National Grid).
- Massachusetts plans to add residential vehicle-to-grid connections paid on a basis similar to home batteries, but pv magazine USA reports no launch date or payment schedule (pv magazine USA).
Another home-energy incentive worth checking before you buy equipment is the one covered in our guide to the heat pump water heater tax credit, which no longer applies to installs after 2025. Virtual power plant program payments are a separate program, paid for energy the battery delivers during events, as described above.
My Take on Virtual Power Plant Program Payments
- In my view, the most useful way to read these numbers is as a rate multiplied by your average kW, which makes the payment easy to estimate for any battery size.
- In my view, the figures from Tesla and the pv magazine report are best treated as ranges of what is possible, because the National Grid page ties payment to average performance during events and says several factors affect it.
- In my suggestion, keep the battery connected to the internet and in working order, since the National Grid page says the incentive is reduced if the utility cannot communicate with the system or it cannot discharge.
- In my suggestion, think of the payment as a bonus on top of what a battery is already for, backup power, rather than the whole reason to buy one.
Sources
- Tesla: ConnectedSolutions results
- National Grid: Battery program (Massachusetts, business)
- Mass Save: ConnectedSolutions batteries
- pv magazine USA: Battery virtual power plant that paid homeowners $5.4 million
This article offers general information and my own opinions, not financial, tax, or legal advice. The figures in worked examples are assumed. Laws, tax rules, and products change and can differ by location, so check current official sources and talk to a qualified professional about your own situation.