Nobody really knows how much power the data center boom will need — and that’s putting utilities in a tough spot. If they underinvest in power plants and the grid, economic growth and energy reliability will suffer. But if they overinvest, Americans may pay for infrastructure nobody needs.
One way to blunt these risks, a new report says, is scaling up virtual power plants. These are networks of rooftop solar systems, home batteries, and other distributed energy equipment that utilities can control remotely to free up space on the grid we already have.
As of 2025, the U.S. had 113 gigawatts of distributed energy resources that could be used for VPPs, says the report published Thursday by consultancy The Brattle Group on behalf of The Pew Charitable Trusts. If the country can more than quadruple that capacity to 524 GW by midcentury, it could avoid the need for $614 billion in grid investments. In turn, the report estimates, the average household electricity bill would drop by $122 per year by 2050.
The findings are largely in line with previous analyses of how VPPs can save consumers money. Paying lots of homes and businesses to use less electricity or share their solar and battery power when grid demand peaks can be cheaper than building more power plants and grid infrastructure — although that relies on utility planners being confident enough that VPP capacity will dependably show up to forgo those investments.
But Brattle’s report goes a step further than past analyses, looking at how VPPs could also act as a hedge against uncertain data center demand. The report examines a hypothetical nationwide scenario in which actual load growth falls 5% short of forecasts between now and 2030. In that scenario, overinvestment in power plants and grid infrastructure added about $84 billion in costs borne by U.S. utility customers from 2030 to 2040. By expanding VPPs, the report finds those overbuilding costs were reduced by $33 billion, or roughly 40%.
That’s largely due to the inherent flexibility of VPPs compared to traditional utility investments, said Ryan Hledik, a principal at Brattle and lead author of the report.
“These are smaller modular resources we can bring online, once the necessary systems are in place,” he said. “You can wait longer to figure out if that demand is actually going to appear, and then build the VPP at that point.”
