The transition to renewable and fossil-free electricity generation is crucial for mitigating climate change. Solar photovoltaics (PV) is the fastest-growing source of electricity globally, with many governments setting ambitious targets to increase PV capacity. Unlike support schemes for utility-scale PV, wind, and hydropower, decentralized PV can be incentivized through mechanisms targeting local energy communities.

Virtual self-consumption enables grid customers to collaborate and share the benefits of local, decentralized electricity generation. Since October 1st 2023, Norway has allowed virtual self-consumption for grid consumers on the same property, primarily targeting apartment buildings. A proposal for a broader virtual self-consumption scheme is now discussed, and suggested to run from July 1st 2025. This paper evaluates the impact of virtual self-consumption schemes on profitability of PV systems.

The proposed scheme offers increased benefits through reduced electricity consumption taxes and other grid fees where applicable. We show how virtual self-consumption induce savings for >8 000 Norwegian buildings, based real-life hourly smart meter data and simulated PV generation for the same locations. For grid customers with capacity-based tariffs, initial results indicated that the scheme represent savings equivalent to 10-15% of investments. For those with energy-based tariffs, initial results show savings amounting to 20-25% of investments. We also discuss the scheme’s implications on grid tariffs for other grid users and how it affects spot market prices under different scenarios for local PV-penetration.