The Power Plant of the Future Is Right in Your Home

If we want more renewable energy, our grids will have to manage themselves. A small experiment in Colorado is lighting the way.
multiple plugs inserted into orange outlets
Like microgrids, virtual power plants consist of distributed energy systems such as rooftop solar panels, EV chargers, and battery packs. The difference is virtual power plants aren’t really designed to disconnect from the greater grid.Photographerr: Eric Tucker/Getty Images

Katela Moran Escobar has always dreamed of being a homeowner, but she never imagined her first house would double as an energy experiment. Last July, Escobar and her family moved into Basalt Vista, a new affordable housing project in the small town of Basalt, Colorado, just north of Aspen. The development is a bulwark against the skyrocketing housing prices in Roaring Fork Valley, but it’s also a living laboratory to test advanced power grid technologies that could turn every home into an appendage of a decentralized power plant.

Basalt Vista is designed to be an all-electric community that produces as much power as it uses. Each home comes outfitted with an electric vehicle charger in the garage, a large battery pack in the basement, and a roof covered with solar panels. The homes are linked together as a microgrid, a self-contained electricity distribution network that can operate independently of the regional electric grid. Their energy systems work together to balance the energy load across the neighborhood—the solar panels harvest energy, plugged in EVs can store electricity as needed, and large battery packs can supply power when the sun isn’t shining.

But what makes Basalt Vista’s microgrid unique is that it autonomously allocates power. There’s an internet-connected control box in the basement of each home running experimental software that continuously optimizes electricity distribution across the microgrid and the flow of energy to and from the larger regional grid. When one home produces more energy than it needs, it can autonomously make the decision to redistribute it to its neighbors or store it for later. “We don’t have to deal with any of the machinery,” says Escobar. “The house works all by itself.”

Basalt Vista is a testbed for a so-called “virtual power plant,” a network of self-optimizing energy resources that unbundles the centralized utility and distributes it across the grid. Like microgrids, virtual power plants consist of distributed energy systems such as rooftop solar panels, EV chargers, and battery packs. The difference is virtual power plants aren’t really designed to disconnect from the greater grid. Instead, they aggregate and control distributed energy sources so they can perform the functions of a large centralized power plant—generating and storing electricity—for the wider grid.

This virtual power plant could serve as an antidote to the inherent variability of renewable energy systems by efficiently matching supply and demand across widely-distributed electricity producers and consumers. For now, the technology exists in the basements of Escobar and her neighbors at Basalt Vista. But if the experiment is successful, it may one day control power for millions of other families.

“Traditionally, we’ve delivered electric service over a one-way transmission and distribution grid from centralized power plants to relatively passive consumers,” says Bryan Hannegan, CEO of Holy Cross Energy, a small nonprofit utility that services Basalt, Aspen, and other nearby communities in Colorado. “That architecture is changing dramatically and consumers are now producing as well. Power plants are no longer large and centralized; they’re numerous and distributed.”

Workers install solar panels on the roof of one of the new homes at Basalt Vista, an all-electric, net zero housing development in Colorado.

Courtesy of Holy Cross Energy

Before he took the helm of Holy Cross in 2018, Hannegan was the founding director of the Energy Systems Integration Facility at the National Renewable Energy Laboratory outside of Denver. The facility was conceived as a “grid-in-a-box” where researchers could study how solar panels, electric cars, battery storage systems, and other so-called “distributed energy resources” affect the way electricity moves around a grid.

As more homes and businesses install their own renewable generation and storage systems, it makes it more difficult for centralized utilities to manage electricity supply and demand. Ensuring that electricity gets to the customers who need it, when they need it, is simpler when you have a small number of large power plants that run on predictable fuels like coal, natural gas, or nuclear. But the energy produced by distributed energy systems tends to be renewable and therefore highly variable—sometimes the sun is shining, sometimes it’s not. Moreover, there are a lot of distributed systems. Instead of managing a few large power plants, utilities would have to manage millions of small ones.

“Utilities are moving away from just selling electricity to end users to managing the networks and electricity flows,” says Haresh Kamath, a senior program manager for distributed energy resources at the nonprofit Electric Power Research Institute. “There’s a lot of advantages to having these energy systems close to the end users, especially if the utilities have some way to orchestrate and coordinate them.”

Generating and storing renewable energy closer to where it’s used can increase the resiliency of a grid by ensuring that the electricity keeps flowing to users even if the rest of the grid is damaged by wildfires or other disasters. But the price of resiliency is efficiency. The proliferation of distributed, variable energy resources creates uncertainty for electricity demand; utilities will either produce too much or not enough. For Hannegan and his colleagues at NREL’s Energy Systems Integration Facility, it was clear that to create an electricity supply that is clean, resilient, and efficient, the grid of the future will have to largely manage itself.

In 2016, the Department of Energy awarded the National Renewable Energy Laboratory a $4.2 million grant to develop autonomous grid control software as part of its Network Optimized Distributed Energy Systems or NODES program. The idea, says NODES project lead Andrey Bernstein, was to create algorithms that optimized electricity distribution both at the level of individual homes and at the level of the entire grid.

“The problem is that the current technology is not able to integrate very large amounts of distributed energy resources,” says Bernstein. “What NODES produces is a plug-and-play platform that enables the integration of millions of devices such as solar panels, batteries, and electric vehicles that can be controlled at the edge of the system.”

The algorithms developed by Bernstein and his colleagues turn the grid into a two-way street. Instead of the top-down approach in which a centralized utility dispatches electricity to end users, the autonomous control software allows distributed energy systems to push excess electricity back onto the larger grid in the most efficient way possible. If it’s a sunny day and rooftop solar panels are producing way more power than their owners need, there’s no reason for a utility to be burning as much coal or natural gas. But without a network of autonomous controllers keeping tabs on distributed generation, a utility has a blindspot and can’t take advantage of the excess clean energy.

The autonomous grid control software developed at NREL was designed for handling tens of thousands of energy systems. But what works in the lab won’t necessarily be able to handle the chaos of real life. So after three years of testing the algorithms at NREL’s grid-in-a-box lab, the NODES team was ready to test it in the field. The autonomous software was first tested on a microgrid at a small vineyard in California and later was installed in small control boxes in the basements of the first four houses built at Basalt Vista.


Holy Cross’ embrace of autonomous grid control software shows that proliferation of distributed renewable energy systems isn’t necessarily a mortal threat to electric utilities. From a utility’s perspective, the growth of rooftop solar panels, battery storage, and other distributed energy systems made it more challenging to efficiently and reliably provide electric power. The Basalt Vista experiment may be small, but it’s proving that it’s possible to autonomously control distributed renewable energy systems so that they augment the grid’s reliability.

“In most places, it’s still a challenge for utilities to figure out how to use distributed resources at scale,” says Chaz Teplin, an electricity practice manager at the Rocky Mountain Institute, an independent sustainability research organization. “I think what Holy Cross is doing is really great because they’re taking a collaborative approach where everyone can benefit from what they’re bringing to the table.”

Escobar says living in an energy experiment has its perks. In addition to the environmental benefits of living in a home that produces as much power as it uses, she says it's also easy on her family’s bank account. During the summer, Escobar says her electricity bills were just $12 per month. The bills were higher during the winter because the house requires more electricity to run its heaters, but Escobar says she expects to see significant savings on her electric bill averaged over the course of a year. “Living in an affordable house with net zero energy use is great for the environment and our finances,” Escobar says. “I hope this model is replicable in other places.”

Basalt Vista is pioneering autonomous control of renewable energy systems, but it’s hardly the only utility exploring virtual power plants. In Utah, a new 600-unit apartment complex was outfitted with solar panels and battery storage that provides backup power and demand response for the local utility, Rocky Mountain Power. And Vermont’s Green Mountain Power has subsidized the installation of Tesla Powerwall battery systems in people’s homes to help offset the peak power demand during the summer.

So far, the results from virtual power plant trials have been promising. They help utilities and their customers save money, increase the amount of renewable energy systems on the grid, and bolster the resiliency of local power networks. Each of these trials has been relatively small, but the advent of autonomous grid control technologies points to a future where everyone’s house can also be a power plant.

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