New Brattle Report Finds that Residential Virtual Power Plants Could Cut Expected Near-Term Household Electricity Bill Increases by More than Half

BOSTON, Oct. 13, 2026 /PRNewswire/ -- A new report from The Brattle Group finds that rapidly scaling residential virtual power plants (VPPs) could reduce expected household electricity bill increases by more than half over the next five years (in inflation-adjusted terms), while providing utilities with hundreds of megawatts of dependable capacity.

The report, The Affordability Advantage: How Virtual Power Plants Can Alleviate Household Electricity Bill Pressure, was prepared by Brattle experts Ryan Hledik and Kailin Graham for Everyday Electric (formerly Renew Home). The analysis evaluates how aggregating flexible household technologies – including smart thermostats, electric vehicles, and behind-the-meter batteries – could both reduce system costs and translate those savings into lower electricity bills for customers.

Available National Scale
The analysis comes as the cost of expanding the conventional power system has risen substantially. The authors note that forecasts for new gas-fired generation costs have increased sharply in recent years amid equipment shortages, supply-chain constraints, and rapid electricity demand growth. The report finds that VPPs can dependably offset a portion of these rising costs by reducing demand during periods when the system is most constrained. VPP capacity value is planning grade, remaining robust across 10 years of historical load and weather conditions considered in the analysis.

The report also shows substantial opportunity to expand residential demand flexibility nationally. Residential demand response currently represents approximately 1.1% of utility system peak demand on average, or about 10 GW nationwide. By contrast, the top 10% of utilities have achieved approximately 4% system-peak contribution.

If utilities nationwide reached that level, Brattle estimates residential VPP capacity could more than triple, from approximately 10 GW to 35 GW. Extrapolating the report's modeling nationally, that additional 25 GW of residential demand flexibility could generate $4 billion to $7 billion annually in financial benefits for US households, including approximately $1.8 billion to $5.5 billion benefiting all ratepayers and another $1.9 billion paid directly to participating customers. This report comes on the heels of a March 2026 Brattle analysis which showed how better utilization of the existing US power system could save consumers more than $100 billion over the next decade.

Drilling Down to the Utility Level
For a representative utility serving one million residential customers, Brattle finds that making it simple for consumers to participate could allow a residential VPP to grow to more than 300 MW within five years, equivalent to approximately 4% of that utility's total coincident peak demand. As a result, the report estimates that the utility could avoid $65 million per year in generation capacity, energy, and distribution upgrade costs by its first year of full-scale operation. Brattle estimates that $56 million of those annual savings would benefit consumers through a combination of lower system costs shared across ratepayers and direct performance payments to participating households.

"Electricity affordability has become one of the most pressing challenges facing the industry, at the same time that utilities are confronting sharply higher costs for new infrastructure," said Mr. Hledik, a Brattle Principal and report coauthor. "Our analysis shows that there is a significant amount of untapped flexible capacity already sitting in customers' homes. If utilities and technology providers can activate that capacity at scale, VPPs can provide a meaningful source of near-term bill relief while also helping meet emerging system needs."

What It Means for American Households
Those savings could have a significant impact on monthly household electricity bills. Under the report's modeled rate-growth scenario, without expanded VPP deployment, the average household's annual electricity cost is projected to increase by $98 in inflation-adjusted terms after five years. The VPP reduces that increase by $56, or 57% on average across all households served by the utility. The savings are greater for households enrolled in the utility's VPP, who are predicted to nearly eliminate the projected inflation-adjusted bill increase. Non-participating households will reduce the increase by more than a third ($34 annually).

The analysis incorporates emerging evidence on how easy-to-use features embedded directly in home energy products can dramatically simplify potential bill savings. Everyday Electric has found that four times as many customers choose to turn on flexible energy shifting features compared to traditional demand response programs, which are built around more noticeable adjustments. 

"This report makes clear just how significant the opportunity is: Virtual power plants that make it easy for customers to save can help households that enable VPP features offset nearly all of their projected electricity bill increases within five years," said Ben Brown, CEO of Everyday Electric. "And even the households that don't take part in a VPP stand to benefit. When the grid has access to more flexible capacity, electricity bills can be more affordable for all homes."

The full report is available at The Affordability Advantage | Brattle.

About The Brattle Group
The Brattle Group is a global consulting firm specializing in economics and finance. With 550+ professionals across North America, Europe, and Asia-Pacific, Brattle provides independent analysis in litigation, energy and financial markets, and regulatory and strategic advisory settings.

Our Electricity Practice serves utilities, grid operators, power producers, customers, regulators, developers, investors, law firms, and policymakers. For more than three decades, our experts have been recognized as trusted advisors and thought leaders in the planning, regulation, litigation, and operation of electricity grids and markets. Our clients collectively serve more than 90% of North American electricity customers, and our experts have testified before courts and regulatory agencies worldwide.

For more information, please visit www.brattle.com.

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SOURCE The Brattle Group