diff --git a/components/soyosource_virtual_meter/__init__.py b/components/soyosource_virtual_meter/__init__.py
index 03f43d1..b0fd017 100644
--- a/components/soyosource_virtual_meter/__init__.py
+++ b/components/soyosource_virtual_meter/__init__.py
@@ -19,6 +19,7 @@
 CONF_POWER_DEMAND_DIVIDER = "power_demand_divider"
 CONF_OPERATION_STATUS_ID = "operation_status_id"
 CONF_ZERO_OUTPUT_ON_MIN_POWER_DEMAND = "zero_output_on_min_power_demand"
+CONF_MAX_POWER_SENSOR_LATENCY_MS = "max_power_sensor_latency_ms"
 
 DEFAULT_MIN_BUFFER = -200
 DEFAULT_MAX_BUFFER = 200
@@ -31,6 +32,10 @@
 DEFAULT_MIN_POWER_DEMAND_DIVIDER = 1
 DEFAULT_MAX_POWER_DEMAND_DIVIDER = 6
 
+DEFAULT_MAX_POWER_SENSOR_LATENCY_MS = 5000
+DEFAULT_MIN_MAX_POWER_SENSOR_LATENCY_MS = 0
+DEFAULT_MAX_MAX_POWER_SENSOR_LATENCY_MS = 30000
+
 soyosource_virtual_meter_ns = cg.esphome_ns.namespace("soyosource_virtual_meter")
 SoyosourceVirtualMeter = soyosource_virtual_meter_ns.class_(
     "SoyosourceVirtualMeter",
@@ -85,6 +90,13 @@ def validate_min_max(config):
                 CONF_MAX_POWER_DEMAND, default=DEFAULT_MAX_POWER_DEMAND
             ): cv.int_range(min=1, max=5400),
             cv.Optional(CONF_ZERO_OUTPUT_ON_MIN_POWER_DEMAND, default=True): cv.boolean,
+            cv.Optional(
+                CONF_MAX_POWER_SENSOR_LATENCY_MS,
+                default=DEFAULT_MAX_POWER_SENSOR_LATENCY_MS,
+            ): cv.int_range(
+                min=DEFAULT_MIN_MAX_POWER_SENSOR_LATENCY_MS,
+                max=DEFAULT_MAX_MAX_POWER_SENSOR_LATENCY_MS,
+            ),
         }
     )
     .extend(soyosource_modbus.soyosource_modbus_device_schema(0x24))
@@ -116,6 +128,11 @@ async def to_code(config):
         )
     )
     cg.add(var.set_power_demand_calculation(config[CONF_POWER_DEMAND_CALCULATION]))
+    cg.add(
+        var.set_power_demand_compensation_timeout_ms(
+            config[CONF_MAX_POWER_SENSOR_LATENCY_MS]
+        )
+    )
 
     if CONF_OPERATION_STATUS_ID in config:
         operation_status_sensor = await cg.get_variable(
diff --git a/components/soyosource_virtual_meter/number/__init__.py b/components/soyosource_virtual_meter/number/__init__.py
index 3050371..ca13c53 100644
--- a/components/soyosource_virtual_meter/number/__init__.py
+++ b/components/soyosource_virtual_meter/number/__init__.py
@@ -10,12 +10,14 @@
     CONF_STEP,
     UNIT_EMPTY,
     UNIT_WATT,
+    UNIT_MILLISECOND,
 )
 
 from .. import (
     CONF_BUFFER,
     CONF_POWER_DEMAND_DIVIDER,
     CONF_SOYOSOURCE_VIRTUAL_METER_ID,
+    CONF_MAX_POWER_SENSOR_LATENCY_MS,
     DEFAULT_BUFFER,
     DEFAULT_MAX_BUFFER,
     DEFAULT_MAX_POWER_DEMAND,
@@ -24,6 +26,9 @@
     DEFAULT_MIN_POWER_DEMAND,
     DEFAULT_MIN_POWER_DEMAND_DIVIDER,
     DEFAULT_POWER_DEMAND_DIVIDER,
+    DEFAULT_MAX_POWER_SENSOR_LATENCY_MS,
+    DEFAULT_MIN_MAX_POWER_SENSOR_LATENCY_MS,
+    DEFAULT_MAX_MAX_POWER_SENSOR_LATENCY_MS,
     SoyosourceVirtualMeter,
     soyosource_virtual_meter_ns,
 )
@@ -40,12 +45,14 @@
 ICON_MANUAL_POWER_DEMAND = "mdi:home-lightning-bolt-outline"
 ICON_MAX_POWER_DEMAND = "mdi:transmission-tower-import"
 ICON_POWER_DEMAND_DIVIDER = "mdi:chart-arc"
+ICON_POWER_SENSOR_LATENCY = "mdi:timer-sync-outline"
 
 NUMBERS = {
     CONF_MANUAL_POWER_DEMAND: 0x00,
     CONF_MAX_POWER_DEMAND: 0x01,
     CONF_BUFFER: 0x02,
     CONF_POWER_DEMAND_DIVIDER: 0x03,
+    CONF_MAX_POWER_SENSOR_LATENCY_MS: 0x04,
 }
 
 SoyosourceNumber = soyosource_virtual_meter_ns.class_(
@@ -164,6 +171,31 @@ def validate(config):
             validate_min_max,
             validate,
         ),
+        cv.Optional(CONF_MAX_POWER_SENSOR_LATENCY_MS): cv.All(
+            number.number_schema(
+                SoyosourceNumber,
+                icon=ICON_POWER_SENSOR_LATENCY,
+                unit_of_measurement=UNIT_MILLISECOND,
+            )
+            .extend(
+                {
+                    cv.Optional(
+                        CONF_MIN_VALUE, default=DEFAULT_MIN_MAX_POWER_SENSOR_LATENCY_MS
+                    ): cv.float_,
+                    cv.Optional(
+                        CONF_MAX_VALUE, default=DEFAULT_MAX_MAX_POWER_SENSOR_LATENCY_MS
+                    ): cv.float_,
+                    cv.Optional(CONF_STEP, default=DEFAULT_STEP): cv.float_,
+                    cv.Optional(
+                        CONF_INITIAL_VALUE, default=DEFAULT_MAX_POWER_SENSOR_LATENCY_MS
+                    ): cv.float_,
+                    cv.Optional(CONF_RESTORE_VALUE, default=False): cv.boolean,
+                }
+            )
+            .extend(cv.COMPONENT_SCHEMA),
+            validate_min_max,
+            validate,
+        ),
     }
 )
 
diff --git a/components/soyosource_virtual_meter/number/soyosource_number.cpp b/components/soyosource_virtual_meter/number/soyosource_number.cpp
index 8128e78..8f17a86 100644
--- a/components/soyosource_virtual_meter/number/soyosource_number.cpp
+++ b/components/soyosource_virtual_meter/number/soyosource_number.cpp
@@ -42,6 +42,9 @@ void SoyosourceNumber::apply_and_publish_(float value) {
     case 0x03:
       this->parent_->set_power_demand_divider((uint8_t) value);
       break;
+    case 0x04:
+      this->parent_->set_power_demand_compensation_timeout_ms((uint16_t) value);
+      break;
   }
 
   this->publish_state(value);
diff --git a/components/soyosource_virtual_meter/soyosource_virtual_meter.cpp b/components/soyosource_virtual_meter/soyosource_virtual_meter.cpp
index 621ead2..b635c69 100644
--- a/components/soyosource_virtual_meter/soyosource_virtual_meter.cpp
+++ b/components/soyosource_virtual_meter/soyosource_virtual_meter.cpp
@@ -20,6 +20,11 @@ void SoyosourceVirtualMeter::setup() {
              this->last_power_demand_);
 
     this->last_power_demand_received_ = millis();
+
+    // If the update_interval is set to never, call the update() method on every power sensor update
+    if (this->get_update_interval() == SCHEDULER_DONT_RUN) {
+      this->update();
+    }
   });
 }
 
@@ -106,15 +111,41 @@ int16_t SoyosourceVirtualMeter::calculate_power_demand_negative_measurements_(in
   //     -500           -490         10          500                  0           0
   //     -700           -690         10          500               -200           0
   int16_t importing_now = consumption - this->buffer_;
-  int16_t power_demand = importing_now + last_power_demand;
+
+  reset_power_demand_compensation_(importing_now);
+
+  int16_t power_demand = importing_now + last_power_demand - this->power_demand_compensation_;
 
   if (power_demand >= this->max_power_demand_) {
-    return this->max_power_demand_;
+    power_demand = max_power_demand_;
   }
 
   if (power_demand < this->min_power_demand_) {
-    return (this->zero_output_on_min_power_demand_) ? 0 : this->min_power_demand_;
+    power_demand = (this->zero_output_on_min_power_demand_) ? 0 : this->min_power_demand_;
+  }
+
+  ESP_LOGD(TAG, "'%s': updated power_demand_compensation_ from %d", this->get_modbus_name(),
+           this->power_demand_compensation_);
+  // only reduction of compensation but keep old demand:
+  if (this->power_demand_compensation_ != 0 && ((importing_now > 0 && power_demand < last_power_demand) ||
+                                                (importing_now < 0 && power_demand > last_power_demand))) {
+    this->power_demand_compensation_ += power_demand - last_power_demand;
+    power_demand = last_power_demand;
+    ESP_LOGD(TAG, "'%s': Oscillation prevention, keeping previous demand: %d; reducing compensation",
+             this->get_modbus_name(), last_power_demand);
+  } else {
+    int16_t next_demand_compensation = this->power_demand_compensation_ + power_demand - last_power_demand;
+    // if not really compensating at the moment and demand changes a bit more, update current time stamp: helps to
+    // reduce false time-outs
+    if (abs(this->power_demand_compensation_) <= 15 && abs(next_demand_compensation) > 30) {
+      ESP_LOGD(TAG, "'%s': resetting only timeout: power_demand_compensation_: %d; next_demand_compensation: %d",
+               this->get_modbus_name(), this->power_demand_compensation_, next_demand_compensation);
+      this->power_demand_compensation_timestamp_ = millis();
+    }
+    this->power_demand_compensation_ = next_demand_compensation;
   }
+  ESP_LOGD(TAG, "'%s': updated power_demand_compensation_ to %d", this->get_modbus_name(),
+           this->power_demand_compensation_);
 
   return power_demand;
 }
@@ -201,5 +232,19 @@ void SoyosourceVirtualMeter::publish_state_(text_sensor::TextSensor *text_sensor
   text_sensor->publish_state(state);
 }
 
+void SoyosourceVirtualMeter::reset_power_demand_compensation_(int16_t importing_now) {
+  // reset on zero crossing or timeout
+  if (importing_now == 0 || (this->power_demand_compensation_ > 0 && importing_now < 0) ||
+      (this->power_demand_compensation_ < 0 && importing_now > 0) ||
+      this->power_demand_compensation_timestamp_ + this->power_demand_compensation_timeout_ms_ < millis()) {
+    ESP_LOGD(TAG, "'%s': reset power_demand_compensation_ to 0 %s", this->get_modbus_name(),
+             this->power_demand_compensation_timestamp_ + this->power_demand_compensation_timeout_ms_ < millis()
+                 ? "after timout"
+                 : "after zero crossing");
+    this->power_demand_compensation_timestamp_ = millis();
+    this->power_demand_compensation_ = 0;
+  }
+}
+
 }  // namespace soyosource_virtual_meter
 }  // namespace esphome
diff --git a/components/soyosource_virtual_meter/soyosource_virtual_meter.h b/components/soyosource_virtual_meter/soyosource_virtual_meter.h
index 89bfb51..b6dfaa4 100644
--- a/components/soyosource_virtual_meter/soyosource_virtual_meter.h
+++ b/components/soyosource_virtual_meter/soyosource_virtual_meter.h
@@ -5,7 +5,7 @@
 #include "esphome/components/sensor/sensor.h"
 #include "esphome/components/switch/switch.h"
 #include "esphome/components/text_sensor/text_sensor.h"
-#include "esphome/components/soyosource_modbus/soyosource_modbus.h"
+#include "../soyosource_modbus/soyosource_modbus.h"
 
 namespace esphome {
 namespace soyosource_virtual_meter {
@@ -47,6 +47,12 @@ class SoyosourceVirtualMeter : public PollingComponent, public soyosource_modbus
   void set_power_demand_divider_number(number::Number *power_demand_divider_number) {
     power_demand_divider_number_ = power_demand_divider_number;
   }
+  void set_max_power_sensor_latency_ms_number(number::Number *max_power_sensor_latency_ms_number) {
+    this->power_demand_compensation_timeout_ms_number_ = max_power_sensor_latency_ms_number;
+  }
+  void set_power_demand_compensation_timeout_ms(uint16_t power_demand_compensation_timeout_ms) {
+    this->power_demand_compensation_timeout_ms_ = power_demand_compensation_timeout_ms;
+  }
 
   void set_manual_mode_switch(switch_::Switch *manual_mode_switch) { manual_mode_switch_ = manual_mode_switch; }
   void set_emergency_power_off_switch(switch_::Switch *emergency_power_off_switch) {
@@ -73,6 +79,7 @@ class SoyosourceVirtualMeter : public PollingComponent, public soyosource_modbus
   number::Number *manual_power_demand_number_;
   number::Number *max_power_demand_number_;
   number::Number *power_demand_divider_number_;
+  number::Number *power_demand_compensation_timeout_ms_number_;
 
   sensor::Sensor *power_sensor_;
   sensor::Sensor *operation_status_sensor_;
@@ -94,6 +101,10 @@ class SoyosourceVirtualMeter : public PollingComponent, public soyosource_modbus
   uint32_t last_power_demand_received_{0};
   uint16_t last_power_demand_{0};
 
+  int16_t power_demand_compensation_{0};
+  uint32_t power_demand_compensation_timestamp_;
+  uint16_t power_demand_compensation_timeout_ms_{5000};
+
   void publish_state_(sensor::Sensor *sensor, float value);
   void publish_state_(text_sensor::TextSensor *text_sensor, const std::string &state);
   bool inactivity_timeout_();
@@ -102,6 +113,7 @@ class SoyosourceVirtualMeter : public PollingComponent, public soyosource_modbus
   int16_t calculate_power_demand_negative_measurements_(int16_t consumption, uint16_t last_power_demand);
   int16_t calculate_power_demand_restart_on_crossing_zero_(int16_t consumption, uint16_t last_power_demand);
   int16_t calculate_power_demand_oem_(int16_t consumption);
+  void reset_power_demand_compensation_(int16_t importing_now);
 };
 
 }  // namespace soyosource_virtual_meter