How the Norwegian virtual self-consumption scheme affects PV profitability

The transition to renewable and fossil-free electricity generation is crucial to mitigate 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 incentivised through mechanisms targeting local energy communities. Virtual self-consumption enables grid customers to collaborate and share the benefits of local, decentralised electricity generation. Since 1 October 2023, Norway has allowed virtual self-consumption for grid consumers on the same property, primarily targeting apartment buildings. From 1 January 2026, virtual self-consumption between commercial and industrial buildings is allowed. This paper evaluates the impact of virtual self-consumption on profitability of PV systems. The proposed scheme offers increased benefits through reduced electricity consumption taxes and other grid fees, where applicable. The presented results show how virtual self-consumption promotes savings in > 4,000 cases, based on real-life, hourly smart meter data and simulated PV generation. For large-scale grid customers with capacity-based tariffs, the scheme gives average savings equivalent to 24% of LCOE for every kilowatt-hour virtually self-consumed. For small-scale grid customers with energy-based tariffs, the average savings per virtually self-consumed kilowatt-hour are 46% of LCOE. The share of profitable PV systems increases from 2% to 4% if large-scale grid customers virtually self-consume, and 15% if small-scale grid customers virtually self-consume.