Virtual net metering is a form of net metering that allows multiple customers, or larger customers with multiple meters, to aggregate their demand to increase the payback of their net metering program. No utility in BC offers virtual net metering today.

Under a standard net metering program, customers are able to “bank” any unused generation with their utility, for example from solar panels, and use the electricity later when they need it. By doing this, the customer avoids the cost of buying the banked electricity, which would have been charged at the full retail rate.

The customer can only avoid the cost of energy for their total annual consumption; if they generate more electricity than their annual needs, the utility buys the surplus at the end of the year at a lower rate than the full retail rate (both BC Hydro and FortisBC do this, but some utilities do not).

The utility calculates a customer’s annual consumption based on their use at the one meter to which the customer’s self-generation facility is connected. This works fine for most residential consumers, who only have one meter.

However, larger customers, such as a municipality with multiple buildings, may have several meters. If they connected, say, solar panels to only one meter, perhaps because they only had one site suitable, they would not be able to offset any of the consumption at their other sites at the full retail rate. At best, any excess generation would be paid out at a lower rate, but this might not be enough to make the investment worthwhile.

A similar limitation might apply to a multi-tenant building that has shared rooftop solar generation.

Virtual net metering allows the consumption from multiple meters to be grouped together “virtually” as one meter for the purpose of net metering, and for their self-generation to offset up to their entire consumption across all meters.

This improves the benefit received by customers by giving them a faster payback for their investment, and therefore makes investments more likely to happen. It may also make the self-generated electricity cheaper, as it incents a customer to install a larger facility, which generally reduces the per-unit cost through economies of scale.

However, by improving the benefit to net metering customers, virtual net metering increases the inherent problems with net metering, such as operational challenges and the cross-subsidy from other utility customers.