Solar Net Metering India 2026 State-wise Policy & How It Works

How Net Metering Works in India — Step by Step

Net metering is a billing mechanism that allows rooftop solar system owners to use the electricity grid as a virtual battery. Here is how it works in practice: During daytime sunny hours, your solar panels generate electricity. This power is first consumed by your home (self-consumption). Any surplus electricity flows into the grid through the bi-directional meter, which records both import (grid to home) and export (home to grid). During nighttime or cloudy periods when solar isn't generating, you draw electricity from the grid normally (import). At the end of each billing cycle, the DISCOM nets your import against your export. If you imported 300 units and exported 200 units, you are billed for only 100 net units at the applicable slab rate. If you exported more than you imported, the excess credits roll forward to the next billing cycle. Most DISCOMs settle credits annually — any remaining credits at the end of the financial year are either paid out at a lower rate (avoided cost, typically ₹2-3/unit) or lapsed, depending on state policy. This makes it important to size your system to match annual consumption rather than over-producing.

State-wise Net Metering vs Net Billing Policy

India's net metering landscape varies by state: Delhi (BSES/Tata Power): Full net metering at retail rate. Credits roll over monthly, settled annually. Excess credits compensated at APPC (Average Pool Purchase Cost, approximately ₹3-4/unit). Very favorable for solar owners. Maharashtra (MSEDCL): Net metering at retail rate for residential systems up to 10 kW. Larger systems may be on net billing. Annual settlement with excess credited at APPC. Gujarat (UGVCL/DGVCL): Shifted to net billing for new installations — export credited at approximately ₹2.25/unit (much lower than retail rate of ₹3-5/unit). This significantly reduces the financial benefit of oversized systems. Self-consumption becomes critical. Karnataka (BESCOM): Net billing for new connections — export at ₹3.40-3.50/unit. Earlier installations on net metering are grandfathered. Tamil Nadu (TANGEDCO): Net metering at retail rate. Relatively favorable policy. Rajasthan (JVVNL): Net metering with annual settlement. Excess at APPC. UP (UPPCL): Net metering with reasonable terms. Kerala (KSEB): Net metering at retail rate, well-implemented. Telangana/AP: Net metering with varying terms — check current DISCOM order.

Application Process for Net Metering

The net metering application process is standardized across India but implementation timelines vary by DISCOM. Step 1 — Feasibility check: Ensure your rooftop has adequate shadow-free area and your sanctioned load can accommodate the proposed system size. The solar system capacity should not exceed your sanctioned load. Step 2 — Apply through DISCOM or PM Surya Ghar portal: Submit an application with property documents, electricity bill copy, proposed system design, and vendor details. Through PM Surya Ghar (pmsuryaghar.gov.in), the process is streamlined with vendor selection and subsidy application combined. Step 3 — DISCOM technical feasibility approval: The DISCOM checks transformer capacity and feeder loading. If the local transformer is already near capacity with solar connections, approval may be delayed or denied (rare for residential). Timeline: 15-30 working days. Step 4 — Installation and testing: Once approved, the vendor installs the system. DISCOM inspects the installation for compliance with CEA (Technical Standards for Connectivity) regulations. Step 5 — Bi-directional meter installation: DISCOM replaces your conventional meter with a bi-directional smart meter. Cost: ₹2,000-5,000 (paid by consumer in most states). Timeline: 15-30 days after inspection approval. Step 6 — Commissioning: System is officially commissioned and net metering begins from this date. Total process: 2-4 months depending on DISCOM efficiency.

Financial Impact of Net Metering — Savings Calculation

Net metering dramatically improves solar ROI because every unit exported is credited at the full retail rate (in net metering states) rather than the lower wholesale rate. Example — 3 kW system in Maharashtra (MSEDCL): Monthly generation: 370 units. Self-consumption (60%): 222 units saved at ₹7-10/unit (avoiding high slabs) = approximately ₹1,776 savings. Export (40%): 148 units credited at retail rate, offsetting approximately 148 units of night/cloudy import = approximately ₹1,184 in credits. Total monthly benefit: approximately ₹2,960. Without net metering (export at zero value): only ₹1,776 savings. Net metering adds ₹1,184/month or ₹14,208/year in additional value. For a system costing ₹72,000 after PM Surya Ghar subsidy, the payback with net metering is approximately 2 years versus 3.4 years without. Key optimization strategy: In net billing states like Gujarat and Karnataka where export value is low, maximize self-consumption by scheduling high-consumption activities (washing machine, water heater, EV charging) during solar hours (10 AM-3 PM). A timer on your geyser to run at noon instead of morning saves the difference between export rate (₹2-3/unit) and retail rate (₹5-8/unit).

Net Metering for Housing Societies and Group Installations

Housing societies can implement net metering through several models. Individual net metering: Each flat with rooftop access gets its own system and meter. Practically limited to top-floor flats or row houses within a society. Virtual net metering / Group net metering: Some states (Kerala, Rajasthan, Gujarat) allow virtual net metering where a single rooftop installation credits multiple consumers. A 50 kW society system can distribute credits to 20-30 participating flats proportionally. This is the most equitable approach for multi-story buildings. Common area net metering: The solar system offsets the society's common area consumption (lifts, corridor lighting, water pumps, garden lighting, clubhouse). Credits reduce the society's commercial electricity bill, lowering the monthly maintenance charge for all residents. A 10-20 kW system can often cover 50-80% of common area consumption, saving ₹10,000-30,000/month for the society. Third-party ownership (RESCO model): A solar developer installs and owns the system on the society rooftop. The society buys the generated electricity at a fixed per-unit rate lower than DISCOM tariff (typically 15-25% discount). No upfront investment for the society. The developer earns returns through the tariff differential. This model is growing in popularity for societies that want solar benefits without capital expenditure.

Common Problems and Solutions with Net Metering

Problem: DISCOM delays in net meter installation. Solution: Follow up through the DISCOM's designated solar cell. If delayed beyond 30 days, file a complaint with your SERC's consumer grievance forum. Document all correspondence. MNRE has issued guidelines mandating timely processing. Problem: Meter shows incorrect export readings. Solution: Cross-verify with your inverter's generation data (available through the inverter app). If there's a discrepancy, request DISCOM meter testing. The cost of testing is borne by the DISCOM if the meter is faulty. Problem: Excess credits lapsing at year-end. Solution: Size your system to match annual consumption, not monthly peak. A slightly undersized system (matching 80-90% of annual consumption) ensures all generation is valued at full retail rate with minimal credit lapse. Problem: Net metering rejected due to transformer capacity. Solution: Some feeders have reached their solar capacity limit. Options: request the DISCOM to upgrade the transformer (may take months), reduce your proposed system size to fit within available capacity, or install a hybrid system with battery to reduce export and stay within limits. Problem: State policy changed from net metering to net billing. Solution: Existing net metering connections are typically grandfathered for 25 years under the original terms. New connections must follow the current policy. If your state recently switched to net billing, maximize self-consumption to compensate for lower export credit values.

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