Net Metering in India: Definition, How It Works, and More

The increasing global warming concerns are making more people increasingly conscious about saving the environment. The Indian government has launched several campaigns to promote a clean and green India. Solar power adoption is one of those initiatives that generate electricity through rooftop solar panels that capture and convert sunlight to power homes and offices.

The power production is high during peak hours when the surface of the panels receives direct sunlight. However, power production depends on multiple factors like location, total hours of sunlight, weather conditions, and more.

Households throughout India can receive sunlight sufficient to meet the power requirements in the day or at night throughout the year even during cloudy or snowy days. With proper rooftop solar system maintenance and cleaning, solar panels can last between 20-30 years.   

If you have decided to go green with solar energy adoption, then you must know the concept of net metering policy or mechanism. Understanding this term and taking its benefits will help you get reliable electricity whenever required.

What is Net Metering?

Also known as NEM, a metering policy is a metering and billing process that allows solar power consumers to receive credits for the electricity they send to the grid. This policy is designed to observe and record the power between solar panels and the government grid.

When solar panels generate excess power, solar users can send that unused surplus power to the grid. This added power can be taken back by the user whenever they need it. For example, during the night or power outage, when solar panels are not working, etc.  

The bi-directional power meter will operate backward when solar energy units have been metered. Solar energy owners receive bills just for the ‘net’ power consumption. This seems to be the best economical alternative because users don’t require using costly solar batteries to store surplus energy.

Homeowners can make the best use of the metering billing mechanism by receiving power credits for solar electricity they transfer to the grid. These credits can be used when their solar power production is less than their energy demands.    

How Does Solar Net Metering Policy Work?

Solar power systems are connected to the electricity grid through a solar meter and the main circuit of a customer or a service panel. When more power is generated by solar panels than is required by a consumer, the power meter transfers excess electricity to the grid. This process reverses the power meter from its usual direction. This is why a bidirectional meter is needed to allow the metering arrangement.

The meter operates in both directions (import and export of power units) –

1) To determine the units of power purchased.

2) To measure the unit of power transferred back to the grid.

The solar power user pays the net of both directions. To access state-level net metering data, click here.

Advantages of Net Metering Mechanism

As mentioned above, the net metering policy reduces the need to purchase costly solar batteries for surplus electricity storage. This increases the cost saving through solar power. Alongside this monetary benefit, net metering benefits consumers in multiple ways including the following –

Control over electricity bills

Net metering offers customers a great opportunity to produce clean and renewable electricity during peak sunlight hours. They can generate electricity more than they can use. The excess power is exported to the electricity cutting down bills and the cost of expensive solar batteries. The consumer has to pay a nominal fee just for a bidirectional solar meter installation.  

Low maintenance cost

Net metering system proves a more cost-effective option than solar batteries requiring higher maintenance and replacement investment.

Data capture

Net metering tracks the record of the power produced and exported to the grid and imported from the grid. This provides important and updated data. The electricity bill generated is the net difference between the two, considering any time-of-use plans the consumer might choose and other charges.   

Financial benefits

Availing of a net metering policy increases savings on the monthly electricity bills. The received solar credits become a passive source of income for solar energy consumers. They can buy grid electricity when needed. The best part is that these monetary benefits continue for the whole lifespan of a rooftop solar panel i.e., 25-30 years.

Clean and green environment

Since solar panel systems are linked to the distribution system of the state, the demand for power produced by traditional sources of electricity will decrease. This reduces the air and water pollution caused by conventional sources.

No air pollution or harmful greenhouse gas emissions are produced during solar power generation and usage. By sending excess solar energy to the electricity grid through net metering, one can reduce the pressure of meeting power demands on coal plants, natural gas, or harmful fossil fuels-based sources.

Process of Net Metering Application and Installation in India

The process of installing a net metering system varies from state to state. However, you can expect the following common steps while applying for and installing a net metering system.

  1. Send an application asking for permission from your state DISCOM (distribution company) for a rooftop solar panel installation.
  2. An authorized DISCOM expert will do a site inspection within 3 days after application.
  3. You can receive approval within 15 days after application once a site inspection is done successfully.
  4. Visit the official website of DISCOM company in your locality and fill in the net metering application online.
  5. Sign a metering agreement given by the local DISCOM official within 3 days of the net metering application.
  6. After solar system installation, submit property papers, an installation certificate, a solar system certificate, and recommended net metering charges.
  7.  DISCOM officials once again conduct installed solar system inspections. A bidirectional meter is connected to the solar system when all necessary regulations are fulfilled.

Government Subsidy on Net Metering Solar Power System

Homeowners considering net metering solar power system installation can get eligibility for government solar subsidy. The Ministry of New and Renewable Energy is providing subsidy aid to housing societies and households for installing net metering solar systems for residential use. The subsidy amount differs based on the size of the solar system. So, before installing solar systems, find out what is sun number score of your property and what subsidy is available in your community. Get confirmed about this with the help of your selected solar installer.  


This is all you must know about net metering policy when thinking about solar power system installation in your home. Remember, applying for a solar net metering policy requires certain documents. To get the list of these documents and other prerequisites, contact your installer. You may consult Megamax Solar for concerns regarding net metering and installation of different types of solar systems.

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