Quick definition: Net metering is a billing mechanism that credits solar energy system owners for the electricity they contribute to the grid, effectively reducing their electricity bills by offsetting their consumption with self-generated power.
Table of contents
- Understanding net metering
- India-specific context & examples
- Practical applications
- How Neufin can help?
- Related terms
- Frequently asked questions
- Additional resources
Understanding net metering
Net metering offers four significant ways to save money:
- Direct bill reduction: When your solar panels generate excess electricity during peak sunlight hours, this surplus is fed back to the grid. Your meter runs backwards, reducing your overall consumption reading and lowering your monthly bill.
- Peak hour savings: During peak consumption hours when electricity rates are highest (typically 10 AM – 5 PM), solar generation is also at its peak. This optimal timing maximizes your savings as you’re offsetting electricity when it’s most expensive.
- Energy banking: Excess units generated can be banked for future use. For example, extra generation during summer months can offset higher consumption during monsoon season when solar generation might be lower.
- Demand charge reduction: For commercial consumers, net metering helps reduce maximum demand charges by lowering the peak power drawn from the grid during business hours.
India-specific context & examples
In India, net metering regulations vary by state. Maharashtra allows banking of excess units for up to one year, while Gujarat permits banking for the same billing cycle only. Delhi offers particularly favorable rates for net metering, making it highly attractive for residential consumers.
Example savings calculation for a 5kW system in Maharashtra:
- Average daily generation: 20 units
- Monthly generation: 600 units
- Average electricity rate: ₹8/unit
- Monthly savings: ₹4,800
- Annual savings: ₹57,600
Practical applications
Net metering is particularly beneficial for:
- Residential rooftop solar installations (1-10kW)
- Commercial establishments with daytime operations
- Educational institutions with large roof areas
- Industrial units with consistent power requirements
How Neufin can help?
Neufin’s energy experts help you maximise net metering benefits by detailed consumption analysis, optimal solar system sizing, and ROI calculations for your net metering system. Our expert team assists in navigating state-specific regulations and ensures compliance with local DISCOM requirements.
Related terms
- Gross metering
- Bi-directional meter
- Solar banking
- Feed-in tariff
Frequently Asked Questions (FAQs)
What is the minimum system size required for net metering in India?
The minimum system size varies by state, but generally, any solar system above 1kW capacity is eligible for net metering in most Indian states.
How long can I bank my excess solar units?
Banking period varies by state – from one month to one year. Maharashtra allows one year, while Gujarat restricts it to the current billing cycle.
Do I need special permission for net metering?
Yes, you need approval from your local DISCOM and must comply with state regulations regarding system size and technical specifications.
Additional resources
- Ministry of New and Renewable Energy (MNRE) guidelines
- State electricity regulatory commission websites
- Solar energy corporation of India (SECI) documentation
Last updated: February 2025
Disclaimer: Regulations and tariffs mentioned are subject to change. Please consult your local DISCOM for current rates and policies.
