Contributors: Shan Tomouk, BESS and Energy Research Lead, Benchmark Mineral Intelligence & Joan White, Senior Director, Storage and Interconnection Policy, SEIA

Reliability is being redefined in real time. As load grows and peak events get sharper, the grid is leaning harder on resources that can respond quickly, locally and repeatedly. Virtual Power Plants (VPPs) are starting to prove that distributed solar, storage and flexible loads can behave like capacity, not just “behind-the-meter” add-ons.

The challenge is that performance is outrunning process. VPPs scale through portfolios of smaller assets, which means they scale through interconnection. When interconnection timelines slip, the entire distributed reliability model slows down, even when the underlying technology is ready.

Shan Tomouk, Benchmark Mineral Intelligence:

While distributed solar and storage present a multitude of potential benefits for grid operators in the U.S., interconnection queues continue to plague project developers looking to begin construction. Given the higher-count, lower individual output of distributed resources, this problem only gets worse.

Long waiting times are not just an inconvenience in the moment, they are actively depressing IRRs and revenues, and by extension, disincentivizing investment. This financial pressure is compounded by rising CAPEX costs, driven by tariffs on Chinese imports and the push for domestic LFP cells. For these assets to remain viable, developers must be able to move quickly to capture still-available tax credits. However, that speed is impossible without a fundamental shift in how states and grid operators work together. Closing this gap between policy and practice is the only way to turn backlogged queues into a reliable, bankable backbone for the grid.

Joan White, SEIA:

Virtual Power Plants (“VPPs”) are a critical part of a modern grid. We think of the grid as poles, wires and generators. But we can avoid building all that costly infrastructure if we take advantage of solar+storage and flexible loads through VPPs. Relatively small devices in homes and businesses are linked up to provide major savings to all electric customers.
California, Texas and the New England states are using rooftop solar paired with home batteries, thermostats and flexible electric vehicle charging to lower peak demand (which drives high electric rates). States that think ahead could save millions. In 2025, California operated 539 MW in VPP assets to provide power during a peak event. Their program could provide up to $206 million in savings to ratepayers by 2028. When considering the future of the grid, let’s think of distributed solar generation paired with flexible loads first.

What This Means For “Reliability” Now

Taken together, these perspectives point to the same conclusion: Distributed, dispatchable capacity is ready to carry more of the reliability burden, but only if interconnection becomes a throughput mechanism instead of a choke point. VPPs can reduce peak strain and defer infrastructure, but their growth curve will track the speed of interconnection approvals, inspection cycles and utility execution. The reliability imperative is no longer just about building more. It is about aligning market rules, queue processes and capital timelines so that distributed capacity can arrive when the grid actually needs it.