### **Utility/Grid Operator Pays For:**
- **Capacity payments** ($/MW for availability) - just for being online and ready
- **Energy dispatch** ($/MWh when actually called) - performance-based
- **Ancillary services** (frequency regulation, voltage support, reserves)
- **Avoided infrastructure upgrades** (localized grid relief, deferred substation upgrades)
- Typical contract: 10-20 years, fixed capacity payments + variable dispatch
### **Customer Receives:**
- **Upfront cost reduction** (subsidized battery installation, $5,000-10,000 value)
- **Monthly VPP participation payments** (e.g. $20-50/month over 10 years = $2,400-6,000 total)
- **Backup power value** (retained portion of battery capacity for outages)
- **Net metering/bill savings** (separate from VPP, traditional solar value)
- **Shorter payback** (battery ROI drops from 12+ years to 5-7 years with VPP)
### **VPP Operator Captures:**
- **Spread** between utility payments and customer payments (core margin)
- **Software/platform fees** (recurring SaaS model)
- **Installation markup** (if doing hardware deployment)
- **Data/optimization value** over time (ML improves dispatch efficiency)
- **Ancillary revenue stacking** (same MW can serve multiple markets sequentially)