Net metering assumes one consumer, one connection, one rooftop. Two Karnataka mechanisms exist because that assumption breaks down often enough to need a fix — a housing society with one roof and forty meters, or a business with one factory and three sanctioned connections. Virtual Net Metering and Group Net Metering both solve for this, but for different situations, and the two get confused constantly.
How the process works
Virtual Net Metering (VNM) lets two or more consumers of the same category — typically domestic consumers, group housing societies, charitable institutions, or government buildings — jointly install one solar plant and split the generated credit across their separate service connections under a pre-agreed procurement ratio. Group Net Metering (GNM) is a different arrangement: a single consumer, in the same name, holding multiple connections of the same category, who wants one solar plant installed at one of their own premises to offset consumption across all of them. GNM is open to any consumer category, including commercial and industrial connections.
| Aspect | Virtual Net Metering (VNM) | Group Net Metering (GNM) |
|---|---|---|
| Who it's for | A group of separate consumers sharing one plant | One consumer with multiple connections |
| Eligible categories | Domestic, group housing societies, charitable institutions, government buildings | Open to all consumer categories |
| Plant location | Anywhere within the licensee's area; need not be co-located with participants | Must be at one of the consumer's own premises |
| Minimum / maximum size | 5 kW minimum; capped at the combined sanctioned load of all participants | 5 kW minimum; capped at the combined sanctioned load of the consumer's connections |
| Mandatory self-consumption | None specified | At least 20% of generation consumed at the source connection, or the unused share lapses |
| Credit distribution | Pre-agreed procurement ratio in a PPA with the DISCOM | Priority order defined in the PPA with the DISCOM |
Surplus export, time-of-day adjustment, and open access exemptions for same-transformer or same-feeder connections follow broadly similar rules under both mechanisms. Confirm current terms with your DISCOM before finalising a plant size or PPA structure.
Technical requirements
Both mechanisms require every participating connection to carry its own smart meter, installed at the participant's own cost, at both the generation and consumption points — this is what makes the credit allocation auditable. Surplus beyond what any participant consumes is bought back by the DISCOM at a fraction of the generic solar tariff rather than at retail rates, so oversizing either arrangement past realistic consumption reduces the return rather than improving it. Open access charges, which would otherwise apply to power wheeled between the generation point and each consumption point, are exempted specifically where generation and consumption sit on the same distribution transformer or 11kV feeder — worth checking at the feasibility stage, since it changes the economics materially.
Working with the Karnataka utility
The distinction matters most for two groups. Housing societies and apartment associations, where the plant sits on a shared roof but bills are individual, fall under VNM. A business or institution with one factory and several separately sanctioned connections — or a consumer wanting to serve multiple premises from a single plant — falls under GNM, with the added condition that a fifth of what it generates has to be used where it is generated. Neither mechanism is a way around the sanctioned-load ceiling; both cap the plant at the combined sanctioned load of everything it is meant to serve.
Where applications stall
Confusion between the two mechanisms tends to follow a pattern:
- Assuming any group of consumers can use VNM — eligibility is restricted to specific categories, and a mixed group (a business alongside a household, for instance) does not qualify
- Planning a GNM plant without accounting for the 20% mandatory self-consumption at the source connection
- Sizing a shared plant to the roof rather than to the combined sanctioned load of every participating connection
- Skipping the PPA that defines the credit-sharing ratio, then finding there is no agreed basis for splitting the benefit later
- Not checking whether generation and consumption sit on the same transformer or feeder before assuming open access charges are exempted
What we recommend
If you are a housing society or a group of eligible consumers pooling one rooftop, structure a VNM arrangement with a clear PPA defining the procurement ratio before installation, not after. If you are a single business or institution consolidating multiple connections under one plant, confirm the 20% self-consumption condition is achievable at your source connection before committing to a size — undersizing to guarantee that threshold is usually safer than chasing maximum capacity. Either way, get your DISCOM's current net metering regulations in writing rather than relying on a general summary, since settlement terms are revised periodically.
Common questions
- Can a business use Virtual Net Metering?
- Generally no. VNM eligibility is restricted to domestic consumers, group housing societies, charitable institutions, and government buildings. A business consolidating multiple connections under one plant typically falls under Group Net Metering instead.
- Does VNM require consumption at the generation site?
- No. VNM has no mandatory self-consumption clause, unlike GNM, which requires at least 20% of generated energy to be used at the source connection.
- Can one GNM plant serve connections at different addresses?
- Yes, provided all the connections are held by the same consumer, in the same name and category, and the combined sanctioned load covers the plant size. The plant itself must sit at one of the consumer's own premises.
- Who pays for the smart meters VNM and GNM require?
- Each participating consumer, under both mechanisms. Meters are needed at both the generation and consumption points and are installed at the participant's own cost.
- What happens to surplus energy that no participant consumes?
- It is bought back by the DISCOM at a fraction of the generic solar tariff, well below retail rates, which is why sizing either arrangement to realistic consumption matters more than maximising capacity.
Talk to our engineering team for a solar assessment.
We will review your consumption, roof, and site constraints before recommending any capacity.