What Is Net Metering & How Can It Save You Money?

As solar energy adoption continues to rise across India, one policy that has played a major role in making solar power more attractive is net metering. Whether you are a homeowner or a business owner, understanding how net metering works can help you maximize your savings and make the most of your solar investment.

What Is Net Metering?

Net metering is a billing arrangement between solar energy users and the local electricity distribution company (DISCOM). It allows you to generate your own electricity using solar panels and send any excess power back to the grid.

When your solar system produces more electricity than you consume (especially during sunny hours), the surplus energy is fed back into the grid. In return, you receive a credit on your electricity bill. Later, when your solar system isn’t producing enough electricity (like at night or during cloudy days), you can use those credits to offset the cost of drawing power from the grid.

This way, your electricity bill reflects only the net amount of energy you consumed—hence the name "net metering."

How Net Metering Saves You Money

1. Reduced Electricity Bills: Every unit of excess solar energy you send back to the grid earns you credits that reduce your future bills. Over time, this can significantly lower your monthly electricity expenses.

2. Faster Payback Period: By offsetting both your energy consumption and selling surplus power, net metering helps you recover your initial investment faster—typically within 3–5 years for most residential and commercial installations in India.

3. Better ROI for Larger Installations: For businesses and industrial units with large rooftop or ground space, net metering maximizes the financial return by turning their property into a productive energy asset.

4. Protection Against Rising Electricity Costs: Energy prices in India continue to rise year over year. Net metering locks in the long-term value of your solar investment and insulates you from future rate hikes.

5. Encourages Sustainable Energy Consumption: By participating in net metering, you contribute to a cleaner grid and support India’s renewable energy goals while benefiting financially.

   
   

Net Metering in India: Key Policies

• Availability: Net metering is approved and regulated by most State Electricity Regulatory Commissions (SERCs) in India.

• Eligibility: Applies to residential, commercial, and industrial consumers.

• Capacity Limits: Typically ranges from 1 kW to 1 MW depending on state regulations.

• Settlement Period: Monthly or annually, depending on local policies.

Many Indian states, such as Gujarat, Maharashtra, Tamil Nadu, and Delhi, have progressive net metering policies in place, making solar installation even more attractive.

Conclusion

Net metering is one of the most effective ways to make your solar investment work harder for you. By turning your rooftop or property into a mini power plant and earning credits for surplus energy, you can enjoy lower bills, faster ROI, and long-term savings—all while contributing to India’s clean energy future.