The rooftop solar industry is facing an unprecedented crisis. Utilities are cutting incentives. Major residential solar installers and financiers have gone bankrupt. And sweeping legislation just passed by Republicans in Congress will soon cut off federal tax credits that have supported the sector for 20 years.

But the fact remains that solar panels — and the lithium-ion batteries that increasingly accompany them — remain the cheapest and most easily deployable technologies available to serve the ever-hungry U.S. power grid.

Sachu Constantine, executive director of nonprofit advocacy group Vote Solar, thinks that the rooftop solar and battery industries can survive and even thrive if they focus their efforts on becoming ​“virtual power plants.”

Hundreds of thousands of battery-equipped, solar-clad homes across the country are already storing their renewable energy when it’s cheap and abundant and then returning it to the grid when electricity demand peaks and utilities face grid strains and high costs — in essence, acting as ​“peaker” power plants.

In places like Puerto Rico and New England, these VPPs have demonstrated their worth in recent months, preventing blackouts and lowering costs for consumers, and the approach could be scaled up dramatically. ​“If we do that, despite the One Big Beautiful Bill, despite the headwinds to the market, there is space for these technologies,” Constantine said.

Right now, there aren’t many other options for meeting soaring energy demand, he added. The megabill signed by President Donald Trump this month undermines the economics of the utility-scale solar and battery installations that make up the vast majority of new energy being added to the grid. And despite the Trump administration’s push for fossil fuels, gas-fired power plants can’t be built fast enough to make up the difference.

Meanwhile, the U.S. power grid has not expanded quickly enough, increasing the risk of outages and subjecting Americans to the burden of rising utility rates, Constantine said. State lawmakers and utility regulators are under growing pressure to find solutions.

Solar and batteries, clustered in small-scale community energy projects or scattered across neighborhoods, may be ​“the only viable way to meet load growth” from data centers, factories, and broader economic activity, Constantine said. And by relieving pressure on utility grids, they can help bring down costs not just for those who install them, but for customers at large.

Where VPPs are already saving the day

This summer has brought new proof of how customers can turn their rooftop solar systems and batteries to the task of rescuing their neighbors from energy emergencies. Over the past two months, Puerto Rico grid operator LUMA Energy has relied on participants in its Customer Battery Energy Sharing program to prevent the grid from collapsing.

“Last night we successfully dispatched approximately 70,000 batteries, contributing around 48 megawatts of energy to the grid,” LUMA wrote in a July 9 social media post in Spanish. Amid a generation shortfall of nearly 50 MW, that dispatch helped avert ​“multiple load shedding events” — the industry term for rolling blackouts.

Puerto Ricans have been installing solar and batteries at a rapid clip since 2017, when Hurricane Maria devastated the island territory’s grid and left millions of people without power, some for nearly a year.

“There were tens of thousands of batteries already there that just needed to get connected in a more meaningful way,” said Shannon Anderson, a policy director focused on virtual power plants at Solar United Neighbors, a nonprofit that helps households organize to secure cheaper rooftop solar. ​“The numbers have been really proven out this summer in terms of what it’s been able to do.”

Puerto Rico’s VPPs are managed by aggregators — companies that install solar and battery systems and control them to support the grid. Tesla Energy, one such aggregator, provides live updates on how much the company’s Powerwall batteries are contributing to the system at large.

The impacts of distributed solar and batteries aren’t always so easy to track — but clean-energy advocates are busy calculating where they’re making a difference.

During last month’s heat wave across New England, as power prices spiked and grid operators sought to import energy from neighboring regions, distributed solar and batteries reduced stress on the grid. Nonprofit group Acadia Center estimated that rooftop solar helped avoid about $20 million in costs by driving down energy consumption and suppressing power prices.

A good portion of that distributed solar operates as part of the region’s VPPs. The ConnectedSolutions programs run by utilities National Grid and Eversource cut demand by hundreds of megawatts during summer heat waves. And Vermont utility Green Mountain Power has been a vanguard in using solar-charged batteries as grid resources at a large scale, in concert with smart thermostats, EV chargers, and remote-controllable water heaters. All told, that scattered infrastructure gives the company 72 extra megawatts of capacity to play with during grid emergencies.

Mary Powell, who led Green Mountain Power’s push into VPPs before that term had caught on, left to become CEO of Sunrun, the country’s largest residential solar installer, in 2021. Choosing to hire Powell indicated the company’s growing interest in becoming something of a solar-powered utility.