It was perhaps about 2 weeks back that I was sitting in a prominent apartment complex in Hyderabad, where one of the association members, an eco-conscious senior citizen was keen on going solar.
The apartment complex was fairly large, and had enough space for 100s of kW of solar panels, enough to power a large % of the residents’ power needs, at least power needs during sunshine hours.
The key challenge? How do we get all the flat-owners agree to having solar panels on their rooftop.
Obviously, it will be next to impossible to get all the residents to agree on contributing to the solar power, for two main reasons:
One: They might simply not want to be powered by solar panels, when it was not yet providing any significant cost savings over grid power
Two: Even if some flat-owners agreed to having solar panels, figuring out how much each has to invest becomes a complex issue as it will be next to impossible to figure out how much exactly each would be using from the solar panels.
In order to overcome the above challenges, the building association decided to go for solar only for common facilities – mainly common lighting and elevators.
Pity, because this would have required hardly 10 kW of solar, while the potential for solar for the apartment was over 300 kW!
The challenge faced by this apartment is not unique, and is being faced by hundreds of thousands of apartments worldwide keen on going solar.
Is there a solution?
Yes. And that is Virtual Net Metering.
Let me take a minute to explain this.
Let us say a bunch of residents in an apartment complex decide to go solar and are OK with investing in solar panels. Now, let’s also say they have decided how much each is going to invest.
To make understanding simple, let us say there are just three residents who invest in the solar power system. And say, Resident A is willing to put in 50% of the total, Resident B 30% and Resident C 20%, and thus agree to share the power generated by the solar panels in the same proportion.
Let’s also say they invest together in a 10 kW system which generates 40 kWh per day. Under the conventional system, there will be confusion on what to do with the power generated and how to allocate it to the three residents.
Enter Virtual Net Metering.
In Virtual Net Metering, the entire 40 kWh generated is exported to the grid instead of to any of the 3 residences. And the units generated are “virtually” allocated to the three residences in the same proportion as their investment or agreed share, so it will be 20 units (per day) to Resident A, 12 units to Resident B and 8 units to Resident C.
That is it. Once this division is done, it becomes similar to any other Net Metering case.
It is such an incredibly simple mechanism, isn’t it?
Virtual Net Metering has the potential to convert hundreds of thousands of community-dwelling rooftops into adopting solar power, once the grid parity is reached for solar for the residential sector.
Which, based on estimates we did at Solar Mango, might be as early as 2017 for many regions worldwide.
What is required for Virtual Net Metering to happen is more at a policy level – the technologies and mechanisms already exist.
Some states in the United States already have Virtual Net Metering policies (list of US states with VNM), and it is quite possible that we see this happening in many other states in the US soon, and in many other countries as well.
Do let me know your thoughts and questions on Virtual Net Metering.