Learn how net metering works and how it can maximize your solar investment returns.
What Is Net Metering?
Net metering is a billing mechanism that credits rooftop solar owners for the electricity they export to the utility grid. When your solar panels produce more power than your home or business consumes — typically during sunny afternoon hours — the surplus flows back to the DISCOM grid and your bidirectional meter records those exported units as credits.
At night or on cloudy days when your panels generate less, you draw power from the grid as usual. Your electricity bill is then calculated on the net difference — units consumed minus units exported — which is why the system is called "net metering."
How Net Metering Works Step by Step
- Solar panels generate DC electricity from sunlight throughout the day.
- Inverter converts DC to AC — the same type used by your appliances and the grid.
- Your premises use solar power first. All loads in your building consume solar electricity directly, reducing grid draw to zero during generation hours.
- Excess power exports to the grid. When generation exceeds your load, surplus units flow through the bidirectional net meter to the DISCOM grid.
- You earn unit credits. Your DISCOM records exported units and credits them against your future consumption at the applicable retail tariff rate.
- Monthly billing on net units. You pay only for the difference between grid units consumed and solar units exported. In high-generation months, your bill can effectively be zero.
Net Metering Policies by State
While the Ministry of New and Renewable Energy (MNRE) sets the central framework, individual State Electricity Regulatory Commissions (SERCs) define the specific rules:
- Gujarat: Net metering available up to 500 kW for residential and commercial. Excess credits carry forward monthly and settle annually. Gujarat Electricity Regulatory Commission (GERC) mandates DISCOMs to install bidirectional meters within 30 days of application. One of the most solar-friendly policy environments in India.
- Maharashtra: Net metering up to 1 MW with MSEDCL, BEST, TPCL, and other distribution companies. Monthly bill credits with annual settlement. Maharashtra has seen rapid growth in commercial solar driven by favorable net metering terms.
- Rajasthan: Net metering for systems up to 1 MW. RERC's progressive policies and among the highest solar generation potential in India — making net metering extremely valuable for Rajasthan consumers.
- Uttar Pradesh: Net metering available through UPPCL and its subsidiary DISCOMs. UP has been expanding its metering infrastructure significantly under the PM Surya Ghar rollout.
- Delhi: BYPL, BRPL, and TPDDL all offer net metering with competitive credit rates. Delhi's high electricity tariffs (Rs. 8–9 per unit for higher slabs) make net metering savings particularly compelling.
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Financial Impact of Net Metering
The financial benefit depends on your consumption pattern, system size, and local tariff structure:
- Residential (3 kW system): Generates approximately 12–15 units per day. A household consuming 300 units/month can reduce their bill by 70–90% through net metering credits from a right-sized system.
- Commercial (50 kW system): Can generate 200+ units per day. Businesses on commercial tariffs (Rs. 8–12 per unit) see the highest rupee savings per exported unit.
- Credit carryforward: Most states allow monthly credit rollover — sunny-month surpluses offset monsoon-month deficits, smoothing annual electricity costs.
- Payback acceleration: Net metering typically shortens the payback period by 1–2 years vs. a solar system without grid export rights.
Net Metering and PM Surya Ghar Yojana
The government's flagship PM Surya Ghar Muft Bijli Yojana specifically requires net meter installation as a condition for subsidy disbursement. The correct sequence is:
- Register on the national portal (pmsuryaghar.gov.in)
- Choose an MNRE-empanelled vendor like Enersol for installation
- System installed and DISCOM application filed
- Bidirectional net meter installed by DISCOM
- System commissioned and inspection completed
- Subsidy of up to Rs. 78,000 credited to your bank account within 30 days
Enersol handles the complete net metering application process — from documentation preparation to DISCOM coordination — as part of our EPC service at no additional charge.
Common Net Metering Questions
Do unused credits expire?
Most states allow monthly credit carryforward with annual settlement. At year-end, some states pay out remaining credits at a lower "avoided cost" rate while others reset the balance. Check your state's SERC order for specifics.
What size system maximises net metering benefit?
A system sized to match your average daytime consumption maximises self-consumption and credit generation. Oversizing beyond 110% of your connected load is typically not allowed for net metering eligibility in most states.
Can industrial consumers use net metering?
Industrial consumers with HT (high tension) connections generally use open access or captive consumption models rather than net metering. Net metering is primarily designed for LT (low tension) residential and commercial connections.
