Virtual Net Metering – A Really Disruptive Concept for Rooftop Solar

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.

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14 thoughts on “Virtual Net Metering – A Really Disruptive Concept for Rooftop Solar

  1. Prashant

    Hi Narasimhan,
    Its indeed an interesting concept, but just wondering if its so simple to compare the price @ which society will feed the solar units to Disscom and the price of units for which the 3 residents gets benefit. I mean usually the Disscom’s given unit credits @ rate of Rs 4 , where as the electricity unit charge for residential user’s (incl. taxes) comes at around Rs 8. How do we handle this scenario in Virtual net metering.

  2. Narasimhan Santhanam Post author

    Hi Prashant.

    Thanks for your note and query.

    Well, I reckon the simplest way is as follows: In the example I provided above, let us say, prior to Net Metering, A consumes 30 units a day, B 25 units and C 20 units.

    The discom will deduct the solar power units generated from each of their consumption, so after the deduction, A would need to pay only for 10 units (30-20), B for 13 (25-12) and C for 12 (20-8) units.

    Now, when it comes to rates, what they save is the rate they pay to the discom for their consumption slab. Assuming, all of them pay Rs 8 per unit for all their units, A saves Rs 160 , B Rs 96 and C Rs 64 per day.

    Now, it gets tricky if the generation from solar panels is higher than the consumption of the individual households. What happens then and how much each gets paid depends on the incentive policy of the state electricity department – in India’s case, this needs to be approved by the state electricity regulation commission, if I understand it right.

    You are perhaps referring to the latter case (generation > consumption) in your query?

    Do let me know, and thanks again for taking time to ask the question.

  3. Viswanathan

    The state discom and the state regulator (the state electricity regulatory commission) need to coordinate this for many Indian states to have this. I think puducherry is also trying to do this??

  4. Maheswaran

    I think let them first get real Net metering. Most states do not even have this let us talk of virtual net metering things

  5. BB

    I live in an apartment complex in Bengaluru and I think this virtual net metering concept could be applied to us. What should I do next to get this implemented for our building?

  6. Dr Manohar Jain

    Is there any state in India which has implemented or is planning to have this scheme for the state?? It is a beneficial scheme.

  7. Dakshinamurthy

    I like this concept. It really simplifies rooftop solar for many apartment buildings. This is really the problem I face for my apartment also, and I am hoping that my state gets this virtual net metering implemented very soon – Daksh, Bengaluru

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