Net Metering Explained (India) — With Simple Billing Examples

If you’re planning a rooftop solar system, net metering is the one term that directly decides how much your electricity bill drops — and how “extra” solar units get adjusted.

In plain words: net metering lets you export unused solar power to the grid and subtract it from what you import later. Your bill is calculated on the net (import − export) units.

Net metering made simple: your solar export offsets grid import — bill is calculated as Net = Import − Export

What exactly is net metering?

With net metering, your DISCOM installs a bi-directional (import–export) meter. It records:

• Import (kWh): Units you take from the grid (usually evenings/nights)
• Export (kWh): Units your solar sends to the grid (usually afternoons)

At billing time, the exported units are deducted in units (kWh) from imported units to get your net units.

Why it matters: Under net metering, one exported solar unit typically offsets one imported unit (unit-for-unit) within the billing/settlement rules of your state.

Net metering vs net billing vs gross metering (don’t mix these up)

India uses all three models depending on your state, DISCOM category (home/commercial), and system size.

Net metering (unit adjustment)

• Exported solar units are deducted from imported units in kWh
• Bill is based on net units (plus fixed/minimum charges)

Net billing / net feed-in (money adjustment)

• Import is valued at your retail tariff
• Export is valued at a feed-in tariff
• Bill is calculated as: Import value − Export value

This is usually less beneficial than net metering if your feed-in tariff is much lower than your retail rate (common in many states).

Gross metering (sell all, buy all)

• Your entire solar generation is sold at a tariff
• Your entire consumption is billed separately at retail tariff

A simple “day in the life” of net metering

• Daytime: Solar runs your home loads first (fan, fridge, washing machine).
• Extra solar: Goes to the grid → counted as export.
• Night: You draw from grid → counted as import.
• Bill: DISCOM nets import and export (and handles carry-forward/settlement as per your state rules).

What charges does net metering NOT remove?

Even if your net units become zero, many bills still include:

• Fixed / minimum charges (monthly minimum bill is common)
• Meter rent / service charges
• Electricity duty / taxes (varies by state)
• Other regulatory charges (varies by DISCOM/category)

Some state rules explicitly mention a monthly minimum bill even when export exceeds import.

Billing Examples (easy numbers, realistic structure)

These are illustrative examples to help you understand the logic. Your slab rates, duties, and fixed charges vary by state/DISCOM.

Assume:

• Retail tariff (average): ₹6/unit
• Feed-in tariff (for net billing examples): ₹3/unit
• Fixed charges: ₹150/month
• Meter/service charges: ₹20/month
• Electricity duty/tax: 5% (example)

Example 1: Import is higher than export (most common case)

Import: 400 units

Export: 250 units

Net units billed: 400 − 250 = 150 units

Energy charges: 150 × ₹6 = ₹900

Fixed charges: ₹150

Meter/service: ₹20

Subtotal = ₹900 + ₹150 + ₹20 = ₹1,070

Tax (5%) = ₹53.50

Total bill ≈ ₹1,124

What you should notice: You didn’t pay for 400 units—only for 150 net units.

Example 2: Export is higher than import (credit carry-forward)

Month 1

Import: 250

Export: 350

Net = 100 units surplus (credit) → carried forward (as per your state rules).

You may still pay minimum charges, e.g.:

Fixed ₹150 + Meter ₹20 + taxes (example) → small bill even with surplus.

Month 2

Import: 500

Export: 200

Net import this month = 500 − 200 = 300

Apply previous credit 100 → billable net = 300 − 100 = 200 units

Energy: 200 × ₹6 = ₹1,200

• Fixed ₹150 + Meter ₹20 = ₹1,370
• Tax 5% = ₹68.50
• Total bill ≈ ₹1,439

Example 3: Settlement at the end of a settlement period

Most DISCOMs don’t let credits roll forever. They settle periodically (often annually; in some places half-yearly), and the surplus is paid at a rate decided by the regulator (often linked to cost of power purchase/feed-in tariff).

Let’s say after settlement you still have 300 surplus units and your settlement rate is ₹3/unit:

Payout/credit = 300 × ₹3 = ₹900 (either adjusted in bill or paid to bank, depending on rules).

How the same month looks under Net Billing (why people get confused)

Take Example 1 again:

Import: 400 units at ₹6 → ₹2,400

Export: 250 units at ₹3 → ₹750

Net billing amount = ₹2,400 − ₹750 = ₹1,650

Add fixed ₹150 + meter ₹20 = ₹1,820

Tax 5% = ₹91

Total bill ≈ ₹1,911

Compare:

• Net metering bill ≈ ₹1,124
• Net billing bill ≈ ₹1,911

That difference happens because net billing values export at a lower tariff.

Why rules differ from state to state (and what’s common across India)

Central rules define these mechanisms and clarify that the detailed arrangement is driven by State Electricity Regulatory Commissions (SERCs). They also allow net metering up to 500 kW or sanctioned load (whichever is lower) where applicable.

So always verify:

• Is your state offering net metering or net billing for your consumer category?
• What is the settlement period (monthly carry-forward + annual/half-yearly settlement)?
• What is the settlement rate for surplus units?
• Do minimum charges apply even when net units are zero?

Practical tips to maximise savings under net metering

1. Shift usage to daytime: run washing machine, ironing, water pumping, etc. when solar is generating.
2. Right-size your system: oversized systems may create surplus that gets settled at a lower rate later.
3. Track import/export monthly: your bill should show import, export, net, and carry-forward clearly.
4. Consider batteries only if your goal is backup/ToD optimisation: net metering already gives strong savings without batteries (battery economics depend on outages and ToD rules).

Quick FAQ

• Does net metering mean “zero bill”?
  Sometimes your energy charges can drop near zero, but fixed/minimum charges usually remain.
• What meter will be installed?
  A single bi-directional net meter at the point of supply; DISCOM may also install a solar generation meter for specific compliance needs.
• Can the rules change?
  Yes—tariffs and settlement rates do change over time (state regulators revise them periodically).