Net Metering in India: How It Works, State-Wise Rules and Common Delays

Net metering is an integral part of the rooftop solar economics in India. It enables eligible users to utilize solar energy produced in their premises, while also getting credits for any surplus electricity supplied back to the grid. But the financial advantage of net metering does not solely depend on the size of the installed solar installation.

Net metering rules in India must be understood by residential users, commercial establishments, solar EPC contractors and developers before sizing rooftop systems.

Even though the broad principle is well accepted, there are specific procedural differences.

While the broad principle may be similar across the country, the states' mechanisms for net metering may differ. SERCs lay down the framework while DISCOMs implement the procedures.

1. How Does Net Metering Work?

A rooftop solar system connected to the grid produces electricity during the day. The energy consumed by the building is used first while the excess power can be fed into the grid.

The bi-directional energy meter measures the electricity obtained from the utility and the electricity supplied by the solar system. The readings from this meter are used by DISCOM to create a bill for the service according to the laws of the state.

Let’s take an example, if a building buys 400 units from the grid and sells 250 units, it means the net consumption of energy is 150 units in the case of net metering.

However, the final bill may be based on other fixed charges, taxes, etc. The export credit and surplus energy accounting variable in different states.

It is necessary to differentiate net metering from gross metering, where the generated electricity is counted separately from the imported units and net billing where the imported and exported energy is assessed differently.

2. State-Wise Net Metering Rules in India

There is no single set of net metering rules applicable across India. State Electricity Regulatory Commissions determine the regulatory framework, while DISCOMs implement the procedures, technical requirements and billing arrangements.

The following examples illustrate how the framework differs across major solar markets.

 For project developers, the key point is that capacity limits, eligible consumer categories, export compensation and settlement periods must be checked against the latest applicable state regulations. A system permitted in one state may not qualify under the same arrangement in another.

The relevant DISCOM also matters. Different distribution areas within a state may have separate application portals, technical procedures and implementation requirements.

3. Net Metering Application Process

The steps involved in the application for a residential solar installation on a roof typically comprise the following:

• Submission of the application: Participation through the National Portal for Rooftop Solar is either mandatory or to go through the DISCOM portal.
• Eligibility verification: The sanctioned load, allowed system capacity and project metering have to be verified.
• Approvals acquisition: Perform all necessary checks and tests.
• Installation of the system: Apply the equipment and commercial practices meeting the respective requirements.
• Request for inspection: Provide information on the installation.
• Installation of the meter: The meter will be installed by the DISCOM.
• Commissioning of the system: Installation is connected to the solar grid after approval is received.

In addition to the above-mentioned, the government has put in place different schemes to assist eligible residential consumers to be able to provide application for subsidy through National Portal under the PM Surya Ghar programme.

4. Why Net Metering Applications Get Delayed

Even with the use of online application systems, delays can take place at various stages of the process.

Mismatch of sanctioned load: It is possible that the proposed solar capacity is greater than the sanctioned level for consumer connection. In this case, a load enhancement application may need to be lodged.

Incorrect documentation: Problems such as wrong details of the consumer, missing electricity bills, incorrect technical documentation or documents for the installed equipment can lead to the verification being stalled.

Technical problems: The local distribution network may need some checks or upgrades before the system can be connected.

Inspection delays: Although the installation is complete, the commissioning of the project cannot be done until the necessary inspection and commissioning processes are carried out.

Delay in the acquisition and installation of meters: The supply of the necessary equipment or delays in the commissioning of such equipment may lead to delays in the installation and commissioning process.

Failure to apply through the designated system: Other than the designated portals or processes mentioned in the communication, any deviations will result in unnecessary complications.

It is important for consumers to retain their application reference number, approval letter, inspection report, and any communications with DISCOM. In case of delay, consumers must follow up to determine timelines for service and the grievance redress process.

5. What EPC Companies Should Check Before Installation

For solar EPC companies, net metering is a matter of project planning as well as compliance. Verifying eligibility before proceeding with installation reduces the risk of completed systems awaiting approval.

Before finalising a project, the EPC team should verify the consumer's sanctioned load, permitted solar capacity, applicable metering arrangement, required documents and the local DISCOM's technical specifications.

The project schedule should also account for inspection, meter installation and commissioning. Customers should be told clearly that installing the solar system does not automatically mean that grid export has been authorised.

For commercial and industrial consumers, the financial model should distinguish between electricity consumed directly on-site and surplus power exported to the grid. The applicable settlement mechanism can materially affect projected savings.

Conclusion

In India, net metering offers a system whereby rooftop solar clients can balance the amount of electricity used against their solar output. The effectiveness of this set-up, however, will depend on the particular regulations set by different states, criteria to be met by consumers, the export settlement process, and implementation practices by the DISCOM.

When putting in place residential systems, it is very important for homeowners to understand the requirements applicable prior to starting installation to avoid problems with approvals and billing. For EPC companies and developers, it is essential to incorporate a regulation check in the project design phase, in the documentation of the customer, as well as in the planning of commissioning.

The growth of rooftop solar installation will make it imperative to be aware of the different net metering regulations applicable across states in order to successfully implement projects.