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Water heating
Water heating: the battery already in your basement
A water heater can store heat the way a battery stores electricity. Grid programs are starting to pay for that — some every day, not just on peak afternoons.
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The short answer
- A tank of hot water is stored energy. Heat it extra before the peak, coast through it, and the grid sees a battery-like shift with no comfort loss.
- Eight programs pay about $130 to $1,300 over 10 years for one water heater; the top payers shift load every day rather than a few times a season (Heatpump Economics).
- Heat pump water heaters use far less power than resistance tanks, so they offer fewer kilowatts to shift — some programs pay resistance tanks more.
- The upside is scale: Renew Home, partnered with Rheem, estimates up to 16 GW of flexible water heating potential in the U.S. (Renew Home).
Ten-year earnings for one water heater
Upfront plus 10 years of payments at published terms. Darker bars shift load daily; lighter bars respond to events.
Swipe to see the full chart →
Event programs vs. daily shifting
Event programs cut power to the tank during a handful of peaks. Daily-shifting programs such as Southern California Edison’s SmartShift and PG&E’s WatterSaver move heating out of the evening peak every day, which creates more value and pays monthly. They may require a mixing valve so a hotter tank stays safe at the tap.
Heat pump water heaters: the economics of leveraging as a Virtual Power Plant asset
Thermal storage, control standards, and all eight programs’ terms.
Method and caveats
Values reproduced from Heatpump Economics (checked September 2026). Ranges reflect published monthly or annual pay; actual pay depends on participation and tank type.