Millions of Rooftops, One Virtual Powerhouse

Europe’s VPP market is growing 21% a year, turning rooftop solar and batteries into a coordinated force for grid stability and new income

13 Feb 2026

In Germany, clusters of rooftop solar panels and home batteries now move in quiet unison. What looks like a patchwork of small devices is increasingly behaving like a single power station. Europe’s virtual power plants (VPPs) are no longer an experiment. They are becoming part of the grid’s core machinery.

The shift reflects a simple tension. Wind and solar capacity are expanding quickly, but their output is fickle. Traditional, centralised plants were built to run steadily, not to balance sharp swings in supply and demand. As renewables claim a larger share of generation, the grid needs flexibility more than sheer capacity.

VPPs provide it by stitching together thousands of distributed energy resources, including rooftop panels, home batteries, electric vehicles and flexible industrial loads, into a coordinated whole. Software aggregates and dispatches these assets in near real time. The result is a digital power station that can stabilise frequency, shave peak demand and sell services into wholesale and balancing markets.

The model is scaling. In Germany and neighbouring countries, platforms already coordinate hundreds of megawatts of distributed capacity across households and businesses. By pooling small units, operators can reduce strain during peak hours and defer investment in new fossil fuel plants.

Money is following. Europe’s VPP market, valued at roughly $1.5bn in 2024, is projected to grow by about 21% a year to 2030. Rising renewable penetration, smarter grids and the spread of flexibility markets are drawing in utilities, aggregators and technology firms. Partnerships and cross border acquisitions are multiplying as companies seek scale in what remains a fragmented market.

Yet obstacles persist. Energy regulation is still largely national, complicating efforts to build seamless platforms across borders. Cybersecurity is another concern. The more devices connected to the grid, the larger the attack surface. Harmonised rules and stricter digital safeguards will be needed if VPPs are to fulfil their promise.

For businesses, participation offers new revenue streams from assets once treated as passive. For policymakers, VPPs provide a way to absorb more renewables without sacrificing reliability. As Europe pushes towards its 2030 climate goals, power stations without smokestacks may prove as important as those with them.