America's data centers are about to need a staggering amount of new electricity. For a long time the answer to that kind of problem was always the same. Build a new power plant. But what if the power plant already exists, quietly, on your neighbor's roof.
A virtual power plant, VPP for short, turns thousands of ordinary home batteries and smart thermostats into one giant power plant that a grid operator can call on whenever it needs to.
Think of it as a flash mob for electricity. A few times a year, usually on a scorching summer afternoon, a grid operator might ask a company like Sunrun to flip the switch. Within moments, thousands of home batteries start feeding power back into the grid at once, easing the strain before it turns into a blackout. Right now Sunrun's contracts only call on these home batteries about twenty days a year. The industry's real goal is turning that into a resource the grid can lean on every single day.
A new power plant takes years to permit, finance, and build. The AI boom is creating new electricity demand on a timeline measured in months, not years, and the grid needed a shortcut.
The International Energy Agency projects that American data centers will need almost half of the country's entire electricity demand growth through 2030. That is enough new demand that processing data will soon use more power than manufacturing all of the nation's aluminum, steel, cement, and chemicals combined. Nobody can permit and pour concrete for a new gas plant fast enough to keep up with that curve.
Sunrun, Tesla, and Renew Home joined forces this year to offer sixteen gigawatts of power that already exists and is ready to use. Roughly sixteen nuclear reactors worth of capacity, without a single new plant getting built.
The three companies made the announcement on June 24, 2026. About sixty percent of that sixteen gigawatts comes from Renew Home's fleet of smart thermostats and water heaters sitting quietly in people's homes. The remaining forty percent comes from Sunrun and Tesla home solar and battery systems. For scale, the average American nuclear reactor produces about 971 megawatts. Sixteen of those, without the cooling towers or the decade long construction timeline.
Sixteen gigawatts is a real dent in the problem, but American data center demand could nearly triple by 2035. This is a first step, not a finish line.
BloombergNEF projects that U.S. data center demand will climb from about 40 gigawatts today to as much as 106 gigawatts by 2035. Globally, data center electricity use is expected to more than double by 2030, reaching roughly what Japan's entire economy consumes in a year. Sunrun says it plans to more than double its own storage capacity by 2028, and the coalition's total pool of available capacity grows a little every day as more households sign up. Big tech buyers seem to agree this kind of flexible capacity is worth chasing. A separate aggregator called Voltus recently signed its own three year deal to supply Google with up to 100 megawatts a year from the mid Atlantic grid.
Line shapes are stylized to show the trend, but the marked milestones are real: U.S. data center demand is projected to climb from about 40 gigawatts today to as much as 106 gigawatts by 2035 (BloombergNEF). The VPP coalition's 16 gigawatts is real and already available, and Sunrun has said it plans to more than double its own storage capacity by 2028.
Texas and Virginia, the country's two biggest data center hubs, are already wired into this network.
Texas has 1.7 gigawatts of this capacity ready to go, which makes sense given it is the country's second largest data center market. Virginia, home to the largest concentration of data centers on the planet in the corridor known as Data Center Alley, currently has 300 megawatts on tap, with plans to grow that to 500 megawatts by 2030, according to Heatmap News.
Texas and Virginia are the two states with confirmed VPP capacity figures in this coalition. Other states may join, but these are the only two figures the coalition has made public.
Homeowners earned 67 million dollars last year simply for letting their homes help out the grid. It is still an open offer rather than a signed deal, but your roof could be next.
"We're moving toward a world where we think about the household as actual energy infrastructure, not simply an end of the line bill payer," says Ari Matusiak, chief executive of the electrification nonprofit Rewiring America, in remarks reported by Heatmap News. Sunrun and Renew Home paid that 67 million dollars combined to participating customers as rewards. It is worth being honest about where things actually stand. As of this writing no tech company has signed a contract to buy this specific sixteen gigawatt pool. It remains a coalition making an offer, and separate deals like Google's smaller Voltus contract suggest big buyers may prefer negotiating directly rather than through one combined pool.