Net Metering in India: How It Works & How to Apply

Quick answer: Net metering lets a home or business with rooftop solar send its extra electricity to the grid and get it adjusted against the electricity it takes from the grid. A bidirectional "net meter" records both directions, and you pay only for the net units you used. National rules allow net metering for systems up to 500 kW or your sanctioned load, whichever is lower. Homes up to 10 kW do not need a feasibility study, and DISCOMs must commission rooftop systems within 15 days. How leftover units are paid for, and the exact fees, depend on your state.

Most rooftop solar systems produce the most power around noon, when many families are out at work or school. Without net metering, much of that power would be wasted or would need expensive batteries. Net metering turns the electricity grid into a kind of free battery: what you do not use during the day goes to the grid, and you take it back at night.

It is the reason a well-sized rooftop system can bring an electricity bill close to zero. It is also where many new solar owners get confused: Why is my bill not zero? What happens to extra units at the end of the year? Who pays for the meter? This guide answers those questions with real examples, explains the national rules and the application steps, and uses Madhya Pradesh as a worked example of how state rules fit in.

How net metering works

A normal electricity meter only measures power coming into your home. A net meter, also called a bidirectional meter, measures two things separately:

Import: units you take from the grid (for example at night or on cloudy days).
Export: units your solar system sends to the grid when it produces more than you are using.

At the end of each billing cycle, the DISCOM subtracts export from import. If you imported more, you pay for the difference. If you exported more, the extra units are carried forward to the next bill as a credit, and are settled at the end of the year according to your state's rules.

A simple example

Suppose a family in Bhopal has a 3 kW system and a monthly bill period looks like this:

Units Solar generation in the month360 Used directly in the house while the sun is up140 Exported to the grid (360 − 140)220 Imported from the grid at night and on cloudy days190 Net units billed (190 − 220)0 (30 units carried forward as credit) The family's total use that month was 330 units (140 + 190), but they pay energy charges on zero units. In a month with lower generation, say during the monsoon, they would use the 30 banked units first, then pay for anything above that.

Why your bill may still not be zero: net metering only offsets the per-unit energy charges. Fixed charges (based on your sanctioned load), electricity duty, meter rent and some other components are usually still billed. So a "zero bill" often means a small bill made up only of fixed charges and taxes.

Net metering vs gross metering vs net billing

ModelHow it worksWho it suits Net meteringExported units are adjusted against imported units, unit for unitHomes and small businesses; the most common model for rooftop solar Gross meteringAll solar units are sold to the DISCOM at a fixed tariff; all your use is billed at the normal tariffOwners who want to sell power, or larger systems where net metering is not allowed Net billing / net feed-inExport and import are valued separately in rupees, often at different ratesUsed in some states and for some consumer categories Group / virtual net meteringOne solar system's export is credited to several connections, such as flats in a society or branches of a businessHousing societies, owners of multiple premises; rules vary by state The national rules in simple words

Net metering in India is governed by the Electricity (Rights of Consumers) Rules, 2020, made by the Ministry of Power, and by each state's electricity regulatory commission. The main national points are:

Capacity limit: a 2021 amendment allows net metering for systems up to 500 kW or the sanctioned load, whichever is lower (Mercom). For most homes this means your system cannot be larger than your sanctioned load without first increasing the load.
No feasibility study up to 10 kW: a 2024 amendment removed the technical feasibility study for rooftop systems up to 10 kW. For larger systems the study must be done within 15 days, down from 20 (Mercom).
Faster commissioning: the same amendment requires DISCOMs to commission rooftop systems within 15 days, down from 30.
Grid upgrades: for rooftop systems up to 5 kW, the DISCOM bears the cost of any needed strengthening of the distribution system (summary of the 2024 amendment).

Your state commission then decides details such as application fees, meter specifications, how surplus units are settled and at what rate, and limits on how much solar a local transformer can take.

How to apply for net metering

If you are installing under PM Surya Ghar, net metering is part of the same online process on the national portal; our step-by-step PM Surya Ghar guide walks through it. If you are installing without the scheme, apply through your DISCOM's portal or office. The steps are broadly the same everywhere:

Check your sanctioned load on your bill. If it is lower than the solar capacity you want, apply for a load increase first.
Submit the net metering application with your bill, ID, proof of ownership or roof rights, and the system's technical details (your installer usually prepares a single-line diagram and component list).
Feasibility / approval: automatic or quick for systems up to 10 kW; within 15 days for larger systems.
Installation by your installer, followed by an installation or work completion report.
Agreement: a net metering connection agreement with the DISCOM. Many states now include it in the online application.
Meter installation and inspection: the DISCOM tests and installs the bidirectional meter, inspects the system and commissions it.
Billing starts from the commissioning date. Check your next bill to make sure it shows import and export readings separately.

Ask your installer to handle the paperwork and to give you copies of everything submitted. A reliable installer will also tell you the expected timeline for your DISCOM. You can compare rooftop solar installers on PeopleList and ask them directly about their net metering experience.

Worked example: net metering in Madhya Pradesh

Madhya Pradesh has three DISCOMs: the East zone (Jabalpur), the Central zone (Bhopal) and the West zone (Indore). Net metering is governed by the Madhya Pradesh Electricity Regulatory Commission (MPERC) regulations for grid-interactive renewable energy systems, revised in 2024 and amended in 2026. Key points as described in public summaries of the regulations:

Size: from 1 kW up to 500 kW, limited by your sanctioned load or contract demand.
Transformer limit: total solar on a distribution transformer is capped at a share of its capacity and allotted first come, first served. In crowded areas this can delay approvals, so apply early.
Fees: a processing fee applies for regular applicants. For PM Surya Ghar applicants, MPERC's 2026 amendment removes processing charges and meter testing fees and moves the connection agreement into the online application (SolarQuarter, May 2026).
Settlement: surplus units are carried forward as units, and settled once a year. The settlement rate for surplus solar units is linked to a regulated rate that is much lower than the retail tariff you pay, so selling extra power is not very profitable.
Charges you still pay: fixed charges, electricity duty and similar charges are not offset by solar credits.

Rules and rates change, so confirm the current settlement rate, fees and meter cost with your DISCOM or on the MPERC website before you size your system. For other states, look for your state electricity regulatory commission's net metering regulations and your DISCOM's rooftop solar page.

How to size your system for net metering

Because extra units are usually settled at a low rate, the best financial result comes from a system that roughly matches your annual use, not one that produces far more.

Add up 12 months of units from your bills (most DISCOM apps show this).
Divide by 12 to get your average monthly use.
Estimate generation: in most of India, 1 kW of panels produces roughly 100–130 units a month, more in sunny months and less in the monsoon.
Choose the size that covers most of your use. For example, 300 units a month usually needs about 2.5–3 kW.

Average monthly useSuggested sizeApprox. monthly generation 100–150 units1–1.5 kW110–190 units 150–250 units2 kW220–260 units 250–350 units3 kW330–390 units 350–500 units4–5 kW440–650 units Oversizing has another catch: you cannot exceed your sanctioned load, and a higher sanctioned load can raise your fixed charges. Ask your installer to show you the calculation, and compare it with our rooftop solar cost and payback guide.

Common problems and how to avoid them

Bill shows no export: the old meter may not have been replaced, or export is not being recorded. Check the readings and call the DISCOM with your application number.
Credits seem to disappear: check your state's settlement period. In many states unused credits are settled once a year at a low rate.
Inverter trips often: local grid voltage may be too high when many homes export at midday. Ask your installer to check inverter settings within the allowed limits and report the issue to the DISCOM.
Long wait for the meter: under the national rules DISCOMs should commission within 15 days. Escalate politely with your application number, and use the DISCOM's grievance system or the national portal if you are under PM Surya Ghar.
Lower generation than promised: look for shade from new construction, water tanks or trees, and dust on the panels. Regular cleaning and maintenance helps.

Panels and net metering: one more rule to know

Since 1 June 2026, ALMM List-II requires approved Indian solar cells for many projects. Net-metering projects that are not taking the central subsidy have a temporary exemption from the cell rule until 31 December 2026, while subsidy projects under PM Surya Ghar must use DCR panels. Read our guide to DCR vs non-DCR panels and ALMM List-II before you choose panels.

Get help from local experts

A good installer will size your system correctly, file the net metering application and follow up with the DISCOM until your meter is installed. Compare solar companies on PeopleList, read reviews and contact them directly, or get free quotes from up to 3 installers in your city.

Frequently asked questions

Is net metering free?

Not always. Depending on your state there may be an application fee, meter cost and meter testing fee. Several states, including Madhya Pradesh, have waived some of these fees for PM Surya Ghar applicants.

Can I sell solar power to the DISCOM for profit?

Under net metering, surplus units are usually settled once a year at a regulated rate that is lower than the retail tariff. It is better to size your system to your own use than to plan on selling power.

What is the maximum system size for net metering?

Nationally, up to 500 kW or your sanctioned load, whichever is lower. Your state may set additional limits, for example on how much solar a transformer can take.

Do I need a battery with net metering?

No. With net metering the grid acts like a battery. A battery is only needed if you want backup during power cuts; on-grid systems switch off during a grid outage for safety.

Can a housing society use net metering?

Yes. Societies can use net metering for common areas, and many states allow group or virtual net metering to share one system's output across several connections. PM Surya Ghar also gives support for society common facilities.

How long does net metering approval take?

For homes up to 10 kW, there is no feasibility study, and DISCOMs must commission within 15 days of the system being ready. In practice, allow two to four weeks from installation to a working net meter.

This guide is based on national rules and state regulations as reported up to October 2026. Net metering rules, fees and settlement rates differ by state and change from time to time. Confirm the current rules with your DISCOM and state electricity regulatory commission before you install.