Solar Net Metering Concept

We live in an age where people across the world are becoming increasingly conscious of the environment. Governments are urging and incentivizing companies and citizens to embrace renewable sources of energy. As more and more people are deciding to go green, there are a few terms that have crept into our lexicon. One of them is Net Metering.

What is Net Metering?

Net Metering is a system that gives solar energy owners credits for the power that they add to the grid. When solar panels produce excess power, that power is sent to the grid. And this power can be ‘taken back’ when the solar plants are not functioning – example, during the night. When a unit of solar energy that has been ‘net metered’, the bi-directional electricity meter will run backwards. Customers are billed only for the ‘net’ energy use.

How does Net Metering Work?

The solar power systems are connected to the utility grid via the customers’ main service panel and meter and, when generating more power than is needed at the site, return excess electricity to the grid through the power meter, reversing the meter from its usual direction. Thus, a bi-directional meter is needed to avail net metering. Since the meter works in both directions (i.e. bi-directional meter)– one way to measure power purchased (when on-site demand is greater than on-site power production), and the other way to measure power returned to the grid – the customer pays the “net” of both transactions.

The net metering policy makes solar energy more attractive and affordable for users. It not only brings down the energy cost drastically, but also helps create small power generation units in almost every nook and corner of the country. Here are some of the benefits of net metering policy:

What Net Metering does is that it gives customers an opportunity to generate clean and efficient electricity. During sunlight hours, most solar customers produce more than they can consume – this surplus is exported to the grid reducing electricity bills.

1. Value addition to DISCOMs: One of the biggest advantages of Net Metering is that it helps trim peak load demand during the day and reduces load shedding. Further it helps State DISCOMS reduce their T&C wheeling losses.

2. Value addition to end-users: Net Metering helps corporates, industrial establishments and educational research institutes save money on electricity bills. The money saved can be invested into in their existing business or can be used to improve educational infrastructure in universities and schools.

In Net Metering, the grid acts as a huge ‘bank’ and ‘stores’ your extra solar power for times when you don’t have enough. This eliminates the need for an expensive battery bank. A small battery backup system should be sufficient for power outages.

The major components you need for a grid-tied net metering system are solar modules, that produce power and an inverter that converts the DC power from the solar panels to the standard AC power produced by the utility. Both these components require little maintenance because there are no moving parts. Modules have a long warranty and are manufactured from a semiconductor material that is usually protected by a tempered glass front.

Net metering records the energy generated and sent to the grid and consumed from the grid, providing vital data. Your electricity bill is the net difference of the two, accounting for any time of use plans you might select and other charges.

As solar energy systems are connected to the state’s distribution system, the demand for electricity generated by traditional methods will reduce – thus preserving the environment.

Major challenge with net metering policy in India is that:

While many states in India have created net metering policies, the implementation has almost been universally slow and there are arbitrary constraints and limits. For example, some states don't allow net-metering for HT power consumers i.e. large off-takers of power and in most states, there is a cap on the size of the solar plant that can be availed under net metering.

Many industries have lots of idle space on roofs which can be used for solar plants. But very few do so because of several issues, one of them being unfriendly net-metering rules. Rooftop solar sector has not really taken off mainly due to the poor implementation of net metering policy.

Despite these challenges, CleanMax has helped 150+ corporates in India in their solar journey - making us India’s leading Solar Company.

State Level Net Metering Data

States Year of release of Net Metering policies Gross / Net Metering Specifications on capacity Specifications for grid integration (electricity or power)
Range allowed Max. capacity w.r.t sanctioned load Limitations on transformer capacity Export of electricity allowed when compared to consumption Billing period for settlement Compensation period for surplus
Maharashtra 2015 Net 1kw –1 MW 100% 40% Above 100% Monthly Yearly
Uttar Pradesh* 2019 Both 1 kW–2 MW 100% 25% Above 100% Monthly Yearly
Rajasthan 2015 Net 1 kW–1 MW 80% 30% Above 100% Monthly Yearly
Karnataka 2016 Both 1 kW–1 MW 100% 80% Above 100% Monthly Monthly
Haryana 2014 Both 1 kW–1 MW 100% 30 % for LT and 15% for HT 90% Monthly Yearly
Tamil Nadu 2019 Net Consumers under Low Tension category except Hut and Agricultural category of tariff – Not sure 100% 90% 90% Bi-monthly Yearly
Delhi 2014 Net 1 kW – NA; for group / virtual metering 5 kW – 5 MW 100% 20% Above 100% Monthly Yearly
Telangana 2016 Both 1 kW–1 MW Residential: 100% Others: 80% 80% Above 100% Monthly Half-yearly
Gujarat 2016 Both 1 kW–1 MW Residential- Above 100%; Non- residential 50 % (for initial two years) 65% Above 100% Monthly Yearly
Andhra Pradesh 2015 Both 1 kW–1 MW 100% 80 % Above 100% Monthly Quarterly
West Bengal 2013 Net 5 kW–not specified NA NA 90% Monthly Yearly
UTs – Andaman & Nicobar, Chandigarh, Dadar and Nagar Haveli, Daman & Diu, Lakshadweep, Puducherry 2019 Both NA–500 kWp; for group/ virtual net metering 5 kWp–NA 100% 75% Above 100% Monthly Yearly
Madhya Pradesh 2015 Net NA–1 MW 100% 30%, as per amendment in 2017 Above 100% Monthly Yearly
Punjab 2015 Net 1 kW–1 MW 80% 30% 90% Monthly Yearly
Jammu and Kashmir 2015 Net 1 kW–1 MW 50% 20% 90% Monthly Yearly
Orissa Amended in 2018 Net Up to sanctioned load 100% 75% 90% Monthly Yearly
Kerala 2014 Net 1 kW–1 MW NA 80% Above 100% Monthly Yearly
Assam 2015 Both 1kW–1 MW 80% 20% 90% Monthly Yearly
Jharkhand 2015 Both 1 kW–2 MW 100% 100% Above 100% Monthly Yearly

* The applicable rate will be 30 % of the weighted APPC rate at which the DISCOM has purchased power from the ground mounted solar PV plant up to 5 MW capacity

Source: Centre for Energy Finance

Disclaimer: The information presented above is for educational purposes only. All the data provided in the article above are approximate values derived from third party sources, research articles or on ground experience and CleanMax would take no responsibility or have any obligation over the correctness of data. The regulatory policies get updated from time to time and it is highly encouraged that you head over to individual DISCOM sites to refer the latest changes.


Acronyms Used:

APPC Average Power Purchase Cost

The Way Ahead

While a greener environment is the overall benefit of solar energy, introducing progressive net-metering policies will make the sector grow exponentially. The union government must come up with better ways to implement the policy framework on net-metering so that 40 GW solar target can be reached by 2022.