A virtual power plant is to be created with the connection of more than 3000 existing home solar and battery systems to the national grid.

The project was formally announced today by Climate Change Minister James Shaw at solarcity's Gig for Good event in Auckland.

Solarcity founder and chief executive Andrew Booth, whose company is behind the project, said in a media release that the move would create a generation and storage network that would help provide energy to the power grid when it's unable to cope with demand, or there's a fault.

The virtual power plant would be the world's largest, Booth said.

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"Australia says it plans to build the world's largest virtual power station but we're actually doing it with our existing systems and we're adding more every day.

"We're working alongside communities to ensure New Zealand's energy system is affordable, resilient and secure, as we transition to the next generation of energy technologies."

Investing in new technologies would help create jobs, attract investment in renewable energy and bring down power prices, he said.

Solarcity's existing solar customers already generate 13.6 GWh of energy over a year.

"With Panasonic batteries those systems will collectively store 18 MWh of power and stop 2230 tonnes of CO2 entering the atmosphere every year."

The virtual power plant would make energy available to Transpower's Demand Response Programme and participating customers would be paid.

Transpower chief executive Alison Andrew backed the initiative.

"It's an exciting first to include battery systems of this scale within our Demand Response Programme. This is beneficial because consumers can have more control over their energy use and when they use it.

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"The more people who participate, the more we can reduce the overall peak demand on the grid."

Electricity demand is forecast to double by 2050.