“We’re a bunch of climate activists who want to make a change today and this is our vehicle to do that.” Nuno Carneiro is describing Plico, an energy offering he believes will simplify the experience of owning solar and storage down to the equivalent of paying a weekly bill. Having come from a career advising on mining, oil and gas projects, he’s happy to be helping the grid transition to renewables.

The offer is simple. For a subscription of $36.50 a week for 10 years, customers are offered “solar as a service”, which comes in the form of a 6.6kW system with Trina panels, a RedBack inverter and 7.2kW of Pylontech storage, all installed, maintained and covered with a 10-year warranty.

It’s a two-way deal, however, with customers signing over rights for Plico to run their new rooftop systems as part of a virtual power plant.

Upon signing up, Plico customers become members of a co-operative which rents solar and storage systems from a special purpose vehicle within Starling Energy Group, the owner of the equipment and parent of Plico. After 10 years, the company’s financier will exit and the co-op will become owner of the infrastructure.

Over time, this means that for every dollar earned from the VPP’s trading in the network, 75 cents will be returned to members of the co-op – and the $36.50 weekly subscription fee will come down. “The more we can help the grid stabilise, the more money we are paid, the more we revenue share back into the energy co-op,” says Carneiro, Plico’s CEO. “If it comes down to the point where we are saving people 20, 30, 40% on their bill, it becomes a no-brainer.”

A vee pee what?

The concept of expected savings from an efficient network makes sense to people working in the energy sector but it is hard to explain to those who only want their lights to work. That Starling will be earning money from their rooftop systems by trading in the frequency response markets and wholesale market will be well over their heads. Will they even care? Probably not, Carneiro admits. The $36.50 weekly fee would already appeal to energy-hungry households, who he says might expect bill savings between 10 and 15%. But he expects Plico’s offer will appeal to plenty of consumers who are happy to break even so long as they are replacing dirty generation with clean.

“Most of our members care about the environment and they are willing to switch,” he says.

Over 10 years the subscription payments work out to $18,980 without inflation (or nearly $17,000 today, applying a discount rate of 2.5%). You can probably find a cheaper system, he says, but “I would question the quality”. Plico had 260 contracted members at the start of January, with 210 systems installed.

Virtual support

The offer relies on no government subsidies, “and in a way, philosophically, we are very keen to keep it that way,” he says. A solution that stands on its own merits has a better chance of rapid, sustained adoption than one which relies on lobby groups and handouts. “It’s not that we don’t want subsidies; more important than subsidies, we want a level playing field,” Carneiro says. “We want to tap into those VPP services we know we can provide to the network, and we want to capture our fair share of that.”

Subsidies play an important role but they can distort markets. In Carneiro’s mind subsidies tend to favour larger players, denying oxygen to small entrants with revolutionary ideas. “We prefer a market that is open and transparent and fair,” he says. “I don’t think that is controversial. If we could have that, then let the innovation win; let the business model and technology win.”

Solar is being incentivised regardless of the fact it is saturating parts of some networks around midday and causing problems. Carneiro also admits the Plico offering would not work without the CER’s Small-scale Technology Certificate credits.

It will take about a thousand well-situated households to sign up before the revenue earned by the VPP will have an effect on bills, on Carneiro’s estimate. Plico’s ambitions for its VPP coincide with local network Western Power’s rollout of community batteries in the southwest of the state, where it has connected nine assets and is planning 50MW more. Carneiro is keen to see the numbers from Western Power’s pilot programs to know whether the network can provide network services more economically than Plico’s orchestrated behind-the-meter solution.

Are you better off?

As VPPs spring up around the country researchers are testing consumers’ attitude to relinquishing control of their pricey storage assets. Many homeowners are reticent. How can they be sure they’re getting a good deal when it’s hard to understand the markets an aggregator is trading in? With Plico’s model, members have no experience of owning storage. The agreement they sign allows Plico undisturbed access to their PV-and-battery systems, with a “better off” clause that states any action by Plico must include some economic benefit to the customer.

“Look, it’s not that difficult,” Carneiro says. “The household is being paid 7c to export excess solar; if the grid believes that not producing that kilowatt of solar is worth 9 or 10c, we’re happy to take that payment and turn the inverter off on behalf of the household. Where we really add a lot of value is when we can do this for a thousand homes, or 5,000 homes or 10,000 homes and have an immediate impact on the grid. You’ll never do that one household at a time.”

Ninety percent of actions will be unnoticed by the members, he estimates, as the VPP provides services to the grid; batteries are likely to be discharged once or twice a year to help the grid on peak demand days. “We would only do it if it doesn’t leave the household worse off.”

Nuno Carneiro says Plico’s VPP will become more valuable to members as more storage is connected.

The trader myth

There is power in numbers, and VPPs must sign up meaningful capacity to achieve their ambitions as valuable providers of grid services. Some architects of connected systems have trialled or are promising peer-to-peer trading between members, or the ability to send solar or stored energy from Arthur to Martha. Carneiro isn’t a believer. First, energy is boring and most people don’t want to sit on their couch trading the stuff. “All the trials have shown people trade for the first couple of days and then don’t pay attention anymore,” he says.

The greatest potential for renewable energy sources is that there is zero marginal cost; once the generation equipment is connected, the fuel is free. For that reason, Carneiro is adamant that the future price for energy will only reflect the cost of getting it from one place to another.

“Once you start thinking about electric vehicles and the impact EVs can have on the network, it’s not that hard to think of a household that is able to self-generate its own power and rely 100% on renewables without paying anything on the margin for energy trading or different tariffs,” he says.

“At Starling, we don’t waste a single minute thinking about [the potential for peer-to-peer energy trading]. Our vision of the future is that you just get energy, with one fixed cost.”

On approach

The word plico – pronounced plee-koh – allegedly has something to do with “connecting people”, but the nearest Carneiro’s research on etymology gets is a Greek word for preparing a ship’s sails for approach to port. If that’s the case, it makes sense in his book. “That’s an appropriate description of what we are trying to do – we are ushering in a disruption in the energy market.”

Plico’s offering is exclusive to Western Australia, “at the moment,” he says. The state suits Plico’s service because parts of the grid are labouring under very high penetration of solar, where as many as one-in-three rooftops might host PV. “The grid is old and suffering from it,” he says.

The company announced in January it had raised $4 million, most of which is allocated to marketing as it extends its offer beyond regional trials. “We are WA’s best-kept secret,” he says, hinting at partnerships on the horizon that will boost awareness.