How Lunar Energy turns residential batteries into virtual power plants in Japan

Japan is facing the dual challenges of power shortages and the need to decarbonize its economy. From April 2026, the country opened its demand-supply adjustment market to low-voltage residential assets, and the need for flexible power keeps growing. Lunar turns that opportunity into results for Japan's power companies. 

Today, Lunar's Gridshare platform is the leading distributed energy platform in Japan, running virtual power plants for seven of Japan's ten major power companies, including TEPCO, the fourth-largest electricity retailer in the world. We coordinate thousands of distributed energy resources as one flexible asset, turning individual homes into a power plant that helps balance the grid.

The challenge

In the last few years, energy prices have soared around the world, driven by a mix of factors that have pushed up both wholesale prices and customer rates. Japan relies on imports for its energy resources, so this crunch has hit hard: power has become more expensive and harder to come by.

That volatility hits Japan's power companies in a few distinct ways. They are exposed to Japan's volatile wholesale power market, both the everyday swings in day-ahead JEPX prices and the sudden spikes driven by tight supply during peak demand hours. Meanwhile, as solar capacity keeps growing, midday oversupply increasingly forces grid operators to curtail renewable generation. Every retailer pays a share of Japan's national capacity charges based on their contribution to system-wide peak demand, so even a handful of high-demand hours a year can shape a year's costs.

The resource to fix this already sits in millions of homes. Batteries and water heaters across Japan can shift their power use away from expensive hours and toward cheap, free solar. But there's a real gap between installing that hardware and putting it to work: coordinating thousands of devices in real time, against live market prices, at scale, while still protecting the savings each home sees behind the meter. That's a different problem, and not one hardware alone solves.

Japanese power companies needed a partner who could solve that coordination problem end to end. Lunar can.

The solution

Since 2018, Lunar Enterprise, with its Gridshare platform, has operated as Japan's largest Edge DERMS platform — running AI-powered optimization across ITOCHU's fleet of 40,000 Smart Star residential batteries. To date, we’ve managed 850 million hours of device control and generated 14% more savings for customers versus default battery modes.

The Gridshare platform is able to co-optimize customer bill savings whilst delivering aggregate power through VPPs, ensuring the best result for the customer and the broader power system.

The results

That combination, savings for the home, power for the grid, is what has let Lunar scale across Japan's utility market. We now deliver virtual power plant services to seven of Japan's ten largest power companies, including TEPCO.

These VPPs effectively and reliably deliver flexible load to reduce energy retailers’ procurement costs, mitigate exposure to wholesale price spikes, prevent renewable energy waste, and minimize capacity contribution costs. Our Gridshare platform: 

• Reduces wholesale procurement costs by analyzing day-ahead prices on the Japan Electric Power Exchange (JEPX) wholesale power market and sending optimal control plans to each battery to charge during low-cost periods and discharge during higher-cost hours. 
• Mitigates exposure to wholesale price spikes by discharging batteries to supply household demand locally during market surges, eliminating expensive grid import for retailers.
• Prevents renewable energy waste by issuing control plans for batteries and water heaters to absorb excess solar generation on sunny midday periods when JEPX spot prices drop near zero, or grid curtailment orders occur.
• Lowers capacity contribution costs by dispatching batteries to shave households' grid draw during the grid's peak demand hours of the year, shrinking the retailer's share of national capacity charges.

Lunar recently launched another VPP program with Chubu Electric Power Miraiz, Japan's third-largest electricity retailer. Chubu Electric Power Miraiz serves millions of customers across Japan's Chubu region, and adding the Gridshare platform's AI to their demand response fleet means smarter dispatch, more flexible load, and a better outcome every time renewable generation spikes, with new revenue for the utility and its customers alike.

Together, these programs show what's possible when a grid puts distributed energy resources like home batteries to work: fewer grid imports, real savings for customers and retailers, and a more stable grid as more renewable energy comes online.

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What's next

These results are just the start. Flexibility doesn't have to stop at batteries. At the start of 2026, Lunar partnered with Daikin and rolled out direct control of EcoCute hot water tanks, a fixture in more than 10 million Japanese homes that had never been part of the flexibility picture before. The same AI that reads tariff data and weather forecasts to time a battery's charge now shifts water heating into peak solar hours too, soaking up excess generation, easing curtailment, and shrinking the bill. For utilities, it's a new category of flexible load. For customers, it's the same reward for zero extra effort.

Lunar's technology and our partners' deep reach in Japan are a strong combination. Together, we're expanding what the Gridshare platform can reach and do, unlocking new VPP opportunities and accelerating the transition to a more distributed, flexible grid that benefits customers and utilities alike.

If your business wants to turn home batteries into a resource the grid can count on, let's talk.

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