The renewable energy solutions provider Sunrun Inc. (RUN) saw a rise of 2.46 percent on Wednesday. The solar energy firm has recently signed an agreement to launch a virtual power plant. In the energy sector, this is a new path, and Sunrun may become one of the leaders in this market.

Sunrun announced collaboration with Southern California Edison, an electricity grid operator, as part of a virtual power plant project. This is one of the first transactions, and a relatively limited capacity of 5,000 kW will be required for the power plant. This capacity suffices the needs of nearly 1,200 houses.

Previously, in the spring of 2020, SunPower Corp. (SPWR), spoke about the prospects of the virtual power plant industry. The idea requires the use of mounted solar panels on the roofs of homes and offices. These panels send electricity to the Central Grid during periods of surplus capacity, which distributes it to customers or stores it in batteries to give it back later, at times of peak demand. Electricity sales favor panel owners and solar companies, while power companies provide an alternative source of electricity for a more efficient network service.

There is great commercial potential for virtual power plants, as the number of panels in households and industrial installations is increasing rapidly. There is also an improvement in the overall capacity of energy storage. In the future, virtual power plants are likely to be combined into large networks, integrating into the overall power grid of the country and producing essential cash flows.

Shares of Sunrun Inc. (RUN) settled at $97.97 in last trading session, while over the week, stock’s performance was +19.81 percent. The residential solar energy firm has a market capitalization of $13 billion whereas it value risen nearly four-fold since start of the year which remained 392.89 percent to be exact.