Pioneering Policies for Renewable Energy: Delving into FiTs, Net Metering, and Virtual Net Metering

Published by firstgreen on

The transformation of the energy landscape towards renewable resources is driven not just by technology, but also by pivotal policies. Three of these crucial policies are Feed-in Tariffs (FiTs), Net Metering, and Virtual Net Metering. Let’s unravel the intricacies and significance of each.

Feed-in Tariffs (FiTs): Catalysing Renewable Projects

Feed-in Tariffs, commonly known as FiTs, serve as an administrative tool geared towards fostering renewable energy projects. With FiTs, new renewable energy ventures are bolstered by the promise of long-term purchase contracts for their green electricity.

Why FiTs Matter

FiTs are a linchpin in promoting renewable energy, primarily because they:

  • Offer a consistent income stream for energy generators.
  • Augment the bankability of renewable projects, making them more attractive to investors.

As a testament to their impact, the adoption of FiTs witnessed a meteoric rise from a mere 34 countries in 2005 to over 80 by 2017.

Challenges with FiTs

However, the success of FiTs hinges on striking a perfect balance. Setting the tariff or premium requires finesse. While under-pricing could deter developers, overpricing might induce disproportionate profits, potentially elevating consumer tariffs or burdening the government’s coffers.

Net Metering: Empowering Distributed Generation

Net metering stands as a beacon for distributed generation (DG) enthusiasts. It is a mechanism that rewards DG owners, allowing them to offset their electricity bills based on their energy contribution.

Understanding Net Metering Compensation

The heart of net metering lies in its compensation structure:

  • It’s primarily in energetic terms, meaning credits are provided in kilowatt-hours (kWh).
  • These credits can be utilized to neutralize electricity consumption during the present billing cycle (typically a month) and frequently extended to subsequent cycles.

This system incentivizes individuals to contribute to the energy grid, knowing they will receive tangible benefits in return.

Virtual Net Metering: Expanding Renewable Horizons

Venturing beyond the conventional, virtual net metering retains the compensation and billing attributes of traditional net metering. However, it introduces a significant flexibility: the absence of a location constraint for a customer’s DG system.

The Appeal of Virtual Net Metering

What sets virtual net metering apart is:

  • Shared Renewable Projects: Multiple consumers can collaborate, sharing net metering credits based on their contribution to a singular DG system.

This novel approach facilitates broader participation in renewable energy ventures, making green energy more accessible and communal.


The evolution of the energy sector leans heavily on policies like FiTs, Net Metering, and Virtual Net Metering. These frameworks, with their distinctive characteristics, are shaping a future where renewable energy is not just a choice but a norm. As we advance, it’s imperative to refine these policies, ensuring they resonate with the ever-changing energy dynamics and continue to champion the cause of a sustainable planet.