Case Study · Demand Response · Middle Market

How 300+ Sites Proved Budderfly’s VPP Model Can Unlock Demand Response for the Middle Market

With a 92% retention rate and expansion into new territories, Budderfly’s Virtual Power Plant is scaling demand response in the middle market.
VPP Launch Year
2025
Participating Sites
300+
Retention Rate
92 %
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Our model gives the grid the energy it needs, when it needs it, without disrupting customer operations. We're proving that the SMB segment will be a cornerstone of tomorrow's responsive, decentralized grid.

Tom Flynn · Chief Administrative Officer and General Counsel, Budderfly
The Opportunity

Capturing one of the largest untapped resources for load flexibility

The U.S. middle market makes up a full third of the private sector, making it one of the largest untapped resources for load flexibility. Yet, restaurants, fitness centers, and local businesses have historically been excluded from demand response programs due to the operational complexities of enrollment, management, and maintenance across hundreds of businesses and operators.

For operators already managing thin margins, any program that adds friction or risks disrupting customer experience is too large of a gamble.

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VPP Explained
What is a Virtual Power Plant?

A Virtual Power Plant aggregates distributed commercial energy loads into a single, controllable grid resource — delivering flexibility to utilities and grid operators without building new infrastructure. In Budderfly's model, that resource is built from HVAC load flexibility across hundreds of commercial sites, automatically adjusted in real time when grid conditions demand it.

Source: US DOE Pathways to Commercial Liftoff: Virtual Power Plants 2025 Update

The Challenge

Scaling demand response in the middle market

To scale DR in this segment, Budderfly designed a model that accelerated adoption while considering operators’ core business concerns.

Unlike traditional aggregators that rely on customer-owned equipment and require active management from staff, Budderfly owns and operates the equipment at every site it enrolls. When a grid event is called, Budderfly's DERMS platform responds automatically, adjusting HVAC loads in real time without requiring operators to lift a finger.

92% retention rate across eligible sites
four ISOs in year one
300+ sites in nine states
just 3–7% opt-out per event
The Results

Proof that small commercial can show up for the grid, consistently

In June 2025, Budderfly activated its VPP across CAISO, ISO New England, PJM, and SPP territories, working with utility and platform partners including Evergy and Leap.

Over 300 sites across nine states participated for the full season. Notably, franchise operators in the Evergy territory participated in all five events, earning bill credits with no operational impact and no upfront cost.

The season also generated site-level data across a range of building types, operating conditions, and load profiles, a dataset that directly informs how Budderfly will optimize performance in 2026 and beyond.

The next evolution

Leveling up with battery energy storage

Budderfly's recently announced partnership with Viridi to deploy commercial battery energy storage systems marks the next phase of our VPP strategy. Adding storage capacity to complement the load flexibility already proven through the VPP moves Budderfly customers closer to full grid infrastructure partners.

We're also expanding our optimization approach, with site-level predictive modeling and pre-cooling strategies. With this capability, we'll able to adjust loads based on occupancy patterns and equipment baselines, so customer experience is never impacted during an event.

THE FUTURE

More markets, optimized performance, and a growing case for demand response as an operational efficiency.

Budderfly has expanded its VPP into New York, Virginia, Arizona, and Washington.

The primary operational focus is performance optimization informed by a full season of real-world site data for our customers. As unprecedented energy demand continues to put strain on the U.S. grid, Budderfly’s goal is to continue growing demand response program participation, increasing the public value as well as the value of participation incentives available to every enrolled customer.

The DERMS platform also creates the foundation for flexibility measures beyond demand response, including demand charge, coincident peak management and other cost saving measures that will expand customer savings beyond what any single program delivers.

What started as a VPP pilot is becoming a core part of what Budderfly delivers. Demand response is a natural extension of Budderfly's energy-as-a-service model. The same infrastructure that drives efficiency at every site is now generating value back to the grid, and back to customers, without any additional investment on their part.

BUILT FOR BUSINESSES LIKE YOURS
Energy savings, grid participation, and operational efficiency — all managed for you, at no upfront cost.