California governor signs bills approving virtual power plants

California Gov. Gavin Newsom has signed two laws, SB 913 and SB 905, meant to use home batteries and other equipment to hold down electricity bills instead of having utilities spend more on new infrastructure. More than 300,000 California homes already have solar-charged batteries, with about 2,000 more added each week. These laws aim to turn that equipment into a "virtual power plant," a network of home batteries and devices that utilities can draw on together during peak demand, in place of building new power lines or plants.

SB 913 removes restrictions that kept home batteries from fully competing in the wholesale energy market. It directs state regulators to figure out how to value batteries that send power back to the grid during times of high demand, so homeowners with batteries can get credit for the full amount of energy their systems can supply, not just the energy they save for themselves. SB 905 requires utilities to track and report how much spare capacity exists on each part of the grid, so money isn't spent expanding lines that sit mostly unused. It also opens the door for batteries, electric vehicle chargers, and smart thermostats to help shift electricity use to cheaper, off-peak hours.

Neither law changes anything immediately. The real effect on bills depends on how state regulators implement the rules over the next year or so, including a June 2027 deadline for improving how aggregated home batteries qualify for grid reliability programs. If you already have a solar battery, or are considering one, these changes could eventually make it easier to earn value by letting your battery supply power to the grid when it's needed most.