Research

50 States of Virtual Power Plants & Supporting Distributed Energy Resources: 2025 State Policy Snapshot

Scores of state and utility actions related to virtual power plants (VPPs) and supporting distributed energy resources (DERs) unfolded across the United States in 2025.
VPPs are typically designed to meet load growth and enhance grid flexibility, while opening doors (and revenue streams) to customers who participate.
State policymakers and regulators are exploring, developing, and refining statewide VPP frameworks.

With U.S. electricity demand projected to rise by 25% by 2030 and as much as 78% by 2050, load growth and resource adequacy are top of mind for many state policymakers, regulators, and electric utilities.

Compared with large-scale generators, VPPs do not require hefty upfront investments or additional transmission infrastructure, and may not require significant distribution system investments. Furthermore, connecting DERs to the distribution grid is much simpler than connecting large-scale generators at the transmission level.

States and utilities are increasingly exploring – and in many cases, prioritizing and tapping – VPPs as a punctual, versatile solution to meet these challenges. Powered by suites of DERs, VPPs can also boost grid flexibility and resilience, while reducing emissions and offering utility customers opportunities (and incentives) to participate.

This report provides an overview of state-level regulatory and legislative actions related to VPPs, DER aggregation, and the enabling DER technologies that support these initiatives. Specifically, it documents scores of meaningful regulatory and legislative actions that occurred in 2025, as well as major actions we anticipate in 2026. It is designed to help a wide range of audiences – including utilities, utility partners, aggregators, regulators, and legislators – understand the scope, volume, evolution, and trajectory of VPP-related policy and program developments across the United States.

SEPA and the N.C. Clean Energy Technology Center developed this report as an encore to a similar analysis covering developments that occurred in 2024. We invite you to download the 2025 State Policy Snapshot to explore how states are shaping the future of VPPs.

Authors:

Rusty Haynes, Senior Manager, Research & Industry Strategy, Smart Electric Power Alliance
Autumn Proudlove, Managing Director – Policy & Markets, North Carolina Clean Energy Technology Center