California Gives Home Batteries a Bigger Role in the State’s Electricity Markets

Governor Gavin Newsom has signed two California bills that broaden the role of virtual power plants in the state’s grid, opening wholesale market access for home battery systems and pushing regulators to plan around distributed storage rather than new infrastructure spending.

SB 913 removes restrictions that had blocked customer-owned batteries from competing freely in the wholesale electricity market. With those barriers lifted, grid operators will be able to dispatch distributed storage more often, lowering utility procurement costs. The law also directs the California Public Utilities Commission to develop a formal methodology for counting virtual power plants toward resource adequacy requirements, with updated rules due by June 30, 2027.

The companion bill, SB 905, addresses grid transparency. It requires disclosure of where spare transmission and distribution capacity already exists on the network — data that can help utilities avoid billing ratepayers for equipment upgrades on lines that run well below their rated capacity most of the time.

Both measures are designed to extract more value from storage infrastructure California households have already built. More than 300,000 homes across the state now operate solar-charged battery systems, making California one of the world’s largest distributed-storage markets. Despite that investment, residential electricity bills have climbed steadily for a decade. Brad Heavner, executive director of the California Solar & Storage Association, said the new laws would “make energy more affordable for everyone, by enabling more use of the infrastructure Californians have already paid for.”

By channelling stored energy into the grid more precisely during peak demand, the legislation is expected to reduce pressure on utilities to build costly new transmission and generation capacity.

Source: Solar Power World