In many jurisdictions, “Shared Solar” projects are becoming increasingly popular due to a mix of legislative and administrative policies and the decline in system costs.  The term “Shared Solar” simply refers to multiple participants benefiting from a solar array. California’s shared solar legislation is in the form of Virtual Net Energy Metering (“NEMV”) for multi-tenant buildings, which enables the allocation of benefits from an electricity-generating source that is not directly connected to a customer’s meter.

Under Virtual Net Energy Metering (“NEMV”) for multi-tenant property/buildings, a solar system can be installed that sells electricity directly and exclusively to the grid, and then each tenant/resident’s electric bill can be credited for a percent of the electricity production.  The owner of the NEMV system must execute a NEMV interconnection agreement and application with the utility.  The application must indicate what percentage of the solar system’s (“Generating Account”) electricity production (each percentage an “Allocated Credit”) should be credited to each tenants/resident’s utility bill (each tenant/resident considered a “Benefiting Account”).  Subject to the utility’s approval and meeting the applicable NEMV policies, each tenant/resident would receive a credit in the amount of the allocated credit indicated in the NEMV application.  The utility would credit the allocated credits to each Benefitting Account’s bill administratively, using electronic billing software.  Thus, NEMV allows the electricity produced on-site to be allocated to multiple on-site customers’ bills without requiring the solar system to be physically interconnected to each tenant/resident’s electricity meter. An important restriction with NEMV is that each NEMV solar system must be serviced by the same service delivery point (“SDP”).  Thus, a separate solar system would need to be installed at each SDP.  The allocations of different percentages of each solar system’s output to different Benefitting Accounts can be modified as frequently as needed.