Updated: June 2026 | ← Back to Blog

Understanding Net Metering in India (2026) — Complete Guide

Net metering is the policy that turns your rooftop solar panels from a cost-saving device into a money-making asset. Without net metering, any solar energy you generate but cannot immediately use is wasted. With it, your electricity meter runs backwards and your surplus generation offsets future bills. Here is how it works in practice.

What is Net Metering?

Net metering (also called net energy metering or NEM) is a billing arrangement between you and your electricity distribution company (DISCOM). When your solar panels produce more electricity than your home needs at that moment, the excess flows back into the grid. Your DISCOM credits you for this exported energy. At the end of each billing cycle, you are charged only for the net difference between what you consumed and what you exported.

How the Bidirectional Meter Works

Your existing single-directional energy meter measures only units consumed (import). For solar net metering, your DISCOM replaces it with a bidirectional net meter that records two values:

Import register: Units consumed from the grid (when your consumption exceeds solar generation)
Export register: Units sent to the grid (when your solar generation exceeds consumption)

Your electricity bill is calculated as: Units imported − Units exported = Net units billed

Example: In June, you imported 280 units from the grid and exported 120 units. Your bill is calculated on 160 net units instead of 280 — a saving of 43% on that month's bill.

When Does Solar Export Happen?

Export happens when your panels produce more than your home is consuming at that exact moment. This typically occurs:

Midday (11 AM – 2 PM): Peak solar generation period. If you are at work or the AC is off, most generation exports to the grid.
Weekdays vs weekends: If your family is away during the day on weekdays, a higher proportion of your generation will export.
Summer vs winter: Longer days in summer mean more export, especially in states with good irradiation.

This is why net metering is so valuable — it allows you to bank midday solar generation and use it at night or during morning/evening peaks, effectively using the grid as a free storage battery.

Sizing Your System for Net Metering

The ideal system size for net metering in India depends on your consumption pattern and your DISCOM's annual settlement policy. The general rule:

Size your system to generate 80–90% of your annual consumption. This maximises offset while minimising the surplus settled at the low APPC rate at year-end.
Over-sizing (generating 130% of annual consumption) means a large surplus settled at ₹2.50–3.50/unit APPC — significantly less than the ₹5–10/unit retail rate you save when you self-consume.
Under-sizing (generating 50–60% of annual consumption) is also fine — you simply continue paying for the difference.

Net Metering Eligibility in India (2026)

All residential consumers with a domestic electricity connection are eligible
Commercial and industrial consumers are also eligible (up to 500 kW capacity in most states)
System must be grid-connected — off-grid systems are not eligible
Must use an MNRE-empaneled installer
Application must be made to your DISCOM through the PM Surya Ghar portal or DISCOM's own portal

Net Metering vs Gross Metering — Know the Difference

Some states are pushing a shift from net metering to gross metering for larger systems. Under gross metering:

All solar generation (100%) is exported to the grid at the APPC rate (₹2.50–4/unit)
You buy back all electricity you need at the full retail rate (₹5–10/unit)
This is significantly less favourable for consumers — effectively you sell cheap and buy dear

CERC mandates net metering for systems up to 500 kW. For most residential consumers (1–10 kW), net metering applies. Always confirm with your DISCOM before installation.

Annual Settlement of Banked Credits

In most Indian states, the financial year ending on March 31 triggers an annual settlement:

Any remaining banked credits (units exported but not yet offset against imports) are settled in cash at the APPC rate
APPC rates in 2026: ₹2.50–3.50/unit (varies by state and DISCOM)
This is much lower than the retail tariff, so the goal is to offset as many units as possible before March 31
In some states (Gujarat, Maharashtra), unutilised annual credits expire with no cash payment

What if my electricity bill goes to zero — do I get paid?

If your net consumption in a billing period is negative (you exported more than you imported), most DISCOMs carry forward the credit to the next month rather than paying cash. The accumulated credits are settled annually at the APPC rate. In most states, you cannot receive monthly cash payments for net export on a residential connection.

How long does DISCOM take to install a net meter?

CERC guidelines mandate 15 working days from commissioning application. In practice, urban DISCOMs like BESCOM, MSEDCL, and BRPL are completing installations within 30–45 days. Rural DISCOMs can take 60–90 days. You can raise a grievance on the PM Surya Ghar portal if your DISCOM exceeds the mandated timeline.

Can I have net metering in a housing society?

Yes, but it is more complex. Each flat typically has its own meter, so net metering applies to the common area connection or the flat owner's connection if panels are on a dedicated portion of the roof. Society-level "virtual net metering" (where generation is divided among flats) is permitted in some states but requires DISCOM approval and internal society agreements.

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