Understanding Net Metering in India: How Your Solar Panels Can Earn You Money
TL;DR: Net metering is the billing mechanism that makes grid-connected residential solar financially compelling. Every unit your panels send to the grid is banked as a credit against your bill — so you only pay for net electricity used. In Karnataka and Telangana, it is well-established and managed end-to-end by your installer.
What Is Net Metering?
Net metering is a billing mechanism that allows solar panel owners to send excess electricity back to the grid and receive credits against their bill. Think of it like a bank account for electricity: you deposit units during sunny afternoons and withdraw them at night.
The “net” in net metering means you pay only for the net energy consumed — imported minus exported. If you export more than you import in a billing cycle, your bill can reach zero. Net metering only applies to on-grid solar systems.
How Net Metering Works Step by Step
Your Panels Generate Electricity
From sunrise to sunset, your panels convert sunlight to DC electricity, which your inverter converts to AC. During peak sun hours (4–8 hours per day), panels likely generate more than your home consumes.
Your Home Uses What It Needs First
Solar powers your appliances first. Only surplus generation beyond your real-time consumption flows outward to the grid.
Surplus Flows to the Grid and Gets Credited
Surplus electricity travels through your bidirectional net meter into the grid. The electricity company credits your account for every unit you export.
You Draw From the Grid at Night Using Your Credits
The meter subtracts exported units from imported units. Your credits offset nighttime consumption, so you draw from the grid without incurring additional charges up to your banked amount.
At the End of the Billing Cycle, You Pay Only the Net Difference
If you exported more than you consumed, your bill is zero. Surplus credits carry forward to the next month.
A Real Numbers Example: What Net Metering Looks Like on Your Bill
Consider a Bangalore household with a 5 kW solar system:
| Item | Units |
|---|---|
| Monthly household consumption from grid | 400 units |
| Monthly solar generation | 500 units |
| Directly consumed from solar during day | 350 units |
| Surplus exported to grid | 150 units |
| Units drawn from grid at night | 50 units |
Net Metering Calculation:
Credits from export: 150 units
Grid import: 50 units
Net units billed: 50 minus 150 = net credit of 100 units
Result: Pay for only 50 units instead of 400 — an 87.5% bill reduction. Monthly bill reaches only fixed charges (a few hundred rupees).
What Is a Bidirectional Net Meter — and Who Installs It?
Your existing single-direction meter is replaced with a bidirectional meter that records both consumption and export. The DISCOM installs and tests it — you do not purchase the meter yourself. There is a one-time charge typically between ₹1,500 and ₹5,000 depending on your state and DISCOM. Your solar installer handles the application process.
Net Metering Rules in India: The National Framework
Net metering is governed at the national level by the Ministry of Power and MNRE, with implementation managed by state electricity regulatory commissions. The general framework for residential consumers:
- •Residential systems up to 10 kW are eligible for net metering
- •Monthly credits carry over on an annual settlement basis
- •Three categories exist: gross metering (all power sold to grid), net billing (monetary credits at a different rate), and traditional net metering (most popular for residential)
Net Metering in Karnataka (BESCOM): What Bangalore Homeowners Need to Know
Karnataka is among the states with the most mature net metering policies in India. Key specifics for 2026:
- •Residential net metering available for systems up to 1 MW
- •Credits settled on an annual basis (financial year)
- •Surplus credits compensated at feed-in tariff rate or adjusted per current BESCOM policy
- •Virtual Net Metering (VNM) available for housing societies with minimum 5 kW
- •DISCOM is legally required to complete connection within 30 working days; delays can be escalated through the PM Surya Ghar portal grievance section
Net Metering in Telangana (TSSPDCL / TSNPDCL): What Hyderabad Homeowners Need to Know
TSSPDCL covers most of Hyderabad; TSNPDCL covers northern and other Telangana regions. Key specifics for 2026:
- •Applications and incentive payments processed within 30 days of claim submission
- •Capacity limit: 1 MW for residential and commercial consumers
- •Annual settlement of surplus credits at applicable feed-in tariff rates
- •Subsidy process runs parallel with net metering application for PM Surya Ghar consumers
An Important 2026 Policy Signal: Why You Should Install Solar Now
The Draft National Electricity Policy 2026 signals a potential future shift for new consumers with systems above 5 kW. Net metering may eventually be replaced by gross metering for new connections.
Under gross metering, you would sell all generation at a lower feed-in tariff while buying all consumption at the full retail rate — significantly less financially attractive than net metering. Existing net metering consumers are grandfathered and keep their current benefits for the life of their system.
Implication: install now to lock in current net metering benefits for the life of your system.
Net Metering vs Net Billing vs Gross Metering: What Is the Difference?
Net Metering
Credits are given in energy units (kWh) at the full retail rate. You pay only for net consumption (imports minus exports). This is the most beneficial arrangement for residential consumers.
Net Billing
Monetary credits are given for exports at a predetermined feed-in tariff — typically 30–50% lower than the retail rate. You pay for your full consumption and receive a separate payment for exports.
Gross Metering
All solar generation is fed to the grid at the feed-in tariff rate. You separately buy all your electricity at retail rates. Generally makes solar less financially attractive for residential consumers.
Net metering remains the dominant and most beneficial arrangement for individual homeowners in India in 2026.
How to Apply for Net Metering: The Process
Choose an MNRE-Empanelled Installer
Only MNRE-approved vendors are eligible for the PM Surya Ghar subsidy and the associated net metering application process.
DISCOM Site Inspection
A Junior Engineer visits your property to assess technical feasibility. This typically occurs within 15–30 working days of application.
System Installation and Documentation
Install per approved specifications and submit installation certificates and property papers.
Net Meter Installation by DISCOM
The DISCOM installs and tests the bidirectional meter. From this point, every exported unit is tracked. Timeline: 2–12 weeks from application to active net meter, depending on state and documentation completeness.
What Happens to Surplus Credits at the End of the Year?
Credits roll forward month to month within the financial year. At annual settlement, the treatment of remaining surplus varies by state — some states compensate at the feed-in tariff in cash; others allow surplus credits to lapse at year-end. Consult current BESCOM or TSSPDCL guidelines for your specific situation.
Practical implication: size your system so that annual generation closely matches annual consumption to minimise uncompensated surplus.
Does Net Metering Work With a Hybrid Solar System?
Yes — hybrid systems can also be configured for net metering. The battery charges first; only after the battery is full does surplus flow to the grid. This means you use your own stored solar electricity at night first (free), exporting only what your battery cannot absorb. With a larger battery bank, you export less but use more of your own electricity directly — a similar or better financial outcome to standard net metering.
How Arkahub Handles Net Metering for Homeowners
Net metering application, documentation, inspection scheduling, and meter installation follow-up are all managed by the Arkahub team. Homeowners do not need to visit a DISCOM office or track their application independently. Most Arkahub installations are commissioned with net metering active within 14 days.
Get a free consultation and net metering assessment → www.arkahub.in/design
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