Net metering vs gross metering for rooftop solar in India: how each state decides
How net metering, gross metering and net billing work for home rooftop solar in India, what the Consumer Rules say about the 500 kW limit, and how to read your state's rules.
With net metering, the units your rooftop system exports are set off against the units you import from the grid, and you pay only for the net. With gross metering, all the solar units are sold to the DISCOM at a fixed feed-in tariff and you buy everything you consume at your normal tariff. For most homes, net metering gives the better saving, because each solar unit replaces a unit you would have bought at your retail rate. The Electricity (Rights of Consumers) Rules, 2020, as amended, provide for net metering for prosumers up to 500 kW (or the sanctioned load, if lower), and leave the detail of settlement, rates for surplus and timelines to each State Electricity Regulatory Commission (SERC). That is why the same 3 kW system can save different amounts in two neighbouring states.
The three arrangements
| Arrangement | How the bill is worked out | Effect on your saving |
|---|---|---|
| Net metering | Export units set off against import units; net import billed at your tariff | Each self-used or offset unit is worth your retail rate |
| Gross metering | All generation sold at a feed-in tariff; all consumption billed normally | Saving = generation × feed-in tariff, which may be below your retail rate |
| Net billing / net feed-in | Imports billed at your tariff; exports credited at a separate, often lower rate | Self-consumption saves at retail rate; exports earn less |
The meter you need is a bi-directional (net) meter for net metering and net billing. For gross metering, a separate generation meter records all solar output.
What the central rules say
The Electricity (Rights of Consumers) Rules, 2020 were made by the Ministry of Power under the Electricity Act, 2003. They recognise a prosumer: a consumer who also produces electricity from a rooftop system. In summary, as amended:
- Net metering is available for systems up to 500 kW or the consumer's sanctioned load, whichever is lower.
- For larger systems, the rules allow gross metering or net billing/net feed-in arrangements.
- The Electricity (Rights of Consumers) Amendment Rules, 2024, notified on 22 February 2024, made complete applications for systems up to 10 kW deemed accepted without a technical feasibility study, cut the time for DISCOMs to commission rooftop systems to 15 days, and require DISCOMs to carry out any needed network strengthening for systems up to 5 kW at their own cost.
- The SERC frames regulations on matters such as settlement, banking and the rate for surplus units.
Because the rules have been amended more than once, read the current consolidated text on the Ministry of Power's website and your SERC's latest rooftop solar regulations rather than relying on summaries.
Where states differ
Your SERC's rooftop or net metering regulations decide the details that move rupees. Questions to check:
- Settlement period: Are surplus units carried forward month to month and settled once a year (often at the end of the financial year), or settled every billing cycle?
- Rate for surplus units: Is the leftover export paid at a feed-in tariff, an average power purchase cost, or not paid at all?
- Fixed charges and duty: Do they remain on the bill even if net units are zero? Usually yes.
- Capacity limit: Can you install more than your sanctioned load? Some regulations cap capacity at the sanctioned or contract load.
- Transformer limit: Some DISCOMs limit the total rooftop capacity on a distribution transformer, which can delay approvals in areas with many systems.
- Time-of-day tariffs: If your connection is on a ToD tariff, check how exports during solar hours are valued against imports at peak hours.
- Group or virtual net metering: Some states allow a housing society or a group of consumers to share credits from one system. See housing society and RWA rooftop solar.
Worked example: why the settlement rule matters (illustrative)
A household on net metering has a 3 kW system producing 3,900 units a year and uses 3,600 units a year. Monthly, it exports more in sunny months and imports more in monsoon and winter evenings.
- Annual settlement with carry-forward: the 300-unit surplus over the year is settled at the end. If the state pays an illustrative ₹2.50 per surplus unit, the household gets ₹750 for those units, and every other solar unit offsets a unit at its retail rate.
- Monthly settlement without carry-forward: surplus in sunny months might be paid at that lower rate each month, while monsoon-month imports are billed at full tariff, so more of the solar units end up valued at ₹2.50 instead of the retail rate.
The yearly saving under the second arrangement can be noticeably lower even with identical generation and consumption. That is why sizing to your own use matters more than filling the roof.
Gross metering: when it appears
Gross metering is used where the state offers it as an option or requires it, more often for larger systems or specific programmes. For a household, it makes sense only if the feed-in tariff is close to what you pay for your top-slab units. Check the current tariff in your SERC's order before choosing it.
How net metering shows on your bill
A net metered bill should show:
- Import units (from the grid), export units (to the grid) and net units;
- any banked or carried-forward units from earlier months;
- the energy charge on net units, plus fixed charges, duty and surcharges;
- at settlement, the credit for surplus units.
If the first bill after commissioning shows only import, or treats you as a normal consumer, the meter may not have been configured correctly; see DISCOM inspection and net meter delays.
Mistakes to avoid
- Oversizing beyond your annual use in a state that pays little for surplus.
- Assuming fixed charges disappear. They usually do not.
- Ignoring load limits. Installing more than your sanctioned load can lead to rejection or extra charges.
- Not reading the SERC regulation. Vendor summaries can be out of date.
Back to the pillar guide: rooftop solar cost and payback. Related: PM Surya Ghar application steps, payback examples for 1, 3 and 5 kW.
Frequently asked questions
Is net metering compulsory for PM Surya Ghar?
The scheme is for grid-connected systems, and commissioning involves installation of a net meter by the DISCOM. The exact arrangement follows your state's regulations.
Can I get paid for all my exported units?
Only for surplus left after set-off, and at the rate your SERC fixes. Exported units that offset your own imports are "paid" at your retail rate through the lower bill.
Do I lose my free units scheme if I install solar?
That depends on the state scheme's terms. Ask your DISCOM in writing before installing.
Who owns the net meter?
Rules differ: in some states the DISCOM supplies it, in others the consumer buys a tested meter. Check your DISCOM's charge schedule.
Official sources
- Ministry of Power — Electricity (Rights of Consumers) Rules, 2020 and amendments
- Forum of Regulators — links to every SERC and JERC
- Central Electricity Authority — technical standards for connectivity of distributed generation
- PM Surya Ghar national portal — net meter step in the application
