Net metering gets mentioned in almost every solar quote and subsidy guide, and almost nobody explains what it actually does to your electricity bill. This guide covers how the bidirectional meter works, how net metering differs from gross metering, what you actually get credited for the power you export, and the DISCOM process from application to activation.
What net metering actually is
Net metering is the billing arrangement that lets a rooftop solar system use the grid as storage instead of a battery. During the day, your panels generate more power than your home uses, and the surplus flows out to the grid instead of going to waste. At night, when your panels produce nothing, you draw power back from the grid as usual. At the end of the billing cycle, your DISCOM nets the two against each other, and you are billed only for the difference.
This is why net metering matters more than almost any other single factor in solar economics: it means you do not need a battery to use solar power generated during the day for consumption at night, as long as your DISCOM operates on a monthly or bimonthly netting cycle.
How the bidirectional meter works
A standard electricity meter only counts power flowing one way, into your home. Net metering requires a bidirectional meter that tracks two separate numbers: units imported from the grid, and units exported to the grid. Your DISCOM replaces your existing meter with this bidirectional meter as part of the net metering activation process, generally at no cost to you under PM Surya Ghar-linked installations.
Your bill then shows both numbers, and what you actually pay is based on the net of the two, not the gross amount you consumed.
Net metering vs gross metering
| Net metering | Gross metering | |
| How it is billed | Import and export are netted against each other at the retail tariff | All solar generation is sold to the DISCOM separately; all consumption is billed separately at full retail rate |
| Best for | Most residential and small commercial systems | Large systems built specifically to sell power, not to offset a bill |
| What you keep | Effectively the full retail value of every unit you generate and use, plus credit for what you export | Only the (usually lower) feed-in tariff for every unit generated, regardless of how much you actually consume |
| Battery needed? | No, the grid absorbs daytime surplus | Not required, but consumption and generation are financially unrelated either way |
For almost every homeowner and small business, net metering comes out ahead because retail electricity tariffs are higher than the feed-in tariffs DISCOMs pay for gross-metered generation. Gross metering only tends to make sense for large, purpose-built generation assets rather than a rooftop system sized to offset your own bill.
What you get credited for exported units
This is the part that varies most by state and DISCOM, and it is worth checking directly rather than assuming a single national rate. Some DISCOMs credit exported units at the same retail tariff you pay for imported units, which is the most favourable form of net metering. Others settle exported units at a separate, typically lower, regulated rate once your export exceeds your import for the cycle. Either way, correctly sizing your system to your actual consumption, rather than maximising generation, is what determines whether this distinction matters to you at all. Our solar panel price guide covers how to size a system to your bill rather than your roof space.
Who qualifies for net metering
Under PM Surya Ghar, residential rooftop systems up to 10 kW are granted standard bidirectional net metering in nearly every Indian state, as part of the subsidy eligibility. Larger residential and commercial systems can still apply for net metering through their DISCOM, though some states cap the net-metered capacity or route larger systems through gross metering or open-access arrangements instead. Confirm your state's current capacity cap with your DISCOM before sizing a system above 10 kW specifically for net metering.
The DISCOM application process
- Complete installation. Net metering is applied for after your solar system is installed, not before.
- Submit the net metering application. This is usually filed through your DISCOM's online portal, or automatically as part of the PM Surya Ghar national portal process for residential systems.
- Site inspection. A DISCOM representative verifies the installation matches what was applied for.
- Bidirectional meter installation. The DISCOM installs the net meter, typically replacing your existing meter.
- Commissioning certificate. Once the meter is active, you receive a commissioning certificate confirming your system is grid-connected and net-metered.
Our installation cost guide breaks down where net metering fees fit into the overall project budget.
What changed in 2026
All DISCOMs remain mandated under the Central Electricity Regulatory Commission (CERC) framework and state electricity regulatory commission rules to offer net metering, and this has not changed. What is worth watching is the draft National Electricity Policy 2026, which has signalled a possible future shift away from net metering for new installations above 5 kW, with battery storage promoted as the alternative instead. Existing net-metered systems would be grandfathered under the current rules even if this policy change goes ahead. Nothing has been finalised as of October 2026, but it is a reasonable factor to weigh if you are deciding between a 5 kW system and a larger one purely to maximise future net metering benefits.
Final word on net metering
Net metering is what makes solar work financially for most Indian homes without a battery: the grid absorbs your daytime surplus and credits it against what you draw back at night. The exact credit rate for exported units varies by DISCOM, so check your local tariff order rather than assuming the national average applies, and size your system to your actual consumption rather than your roof's maximum capacity. For the subsidy rules that activate standard net metering automatically on residential systems, see our PM Surya Ghar Yojana guide.
To size a system correctly for your consumption and get the net metering process handled as part of installation, contact our team.
Frequently asked questions
What is net metering in simple terms?
Net metering lets your DISCOM net the power you export to the grid against the power you import, so you are billed only for the difference. It effectively turns the grid into free storage for solar power you generate during the day but use at night.
What is the difference between net metering and gross metering?
Net metering nets your import and export against each other, giving you the full retail value of power you generate and use yourself. Gross metering sells all your generation to the DISCOM at a separate, usually lower, feed-in tariff while billing your consumption separately at full retail rate.
Do I need a battery with net metering?
No. Net metering uses the grid itself as storage for daytime surplus, which is why most grid-connected residential systems in India skip a battery entirely and rely on net metering instead.
How much does net metering cost to set up?
Under PM Surya Ghar, the bidirectional meter and net metering activation are generally included at no extra cost for eligible residential systems up to 10 kW. For larger systems, check with your DISCOM, as fees can vary by state and system size.
What is the net metering process after installation?
Your installer submits a net metering application to your DISCOM, a site inspection confirms the installation, the DISCOM installs a bidirectional meter in place of your existing one, and you receive a commissioning certificate once the meter is active and grid-connected.
Is net metering available for all system sizes?
Residential systems up to 10 kW get standard net metering nearly everywhere in India under PM Surya Ghar. Larger systems can still apply through the DISCOM, but some states cap net-metered capacity or route bigger systems through gross metering or open-access arrangements instead.
