Net Metering Calculation Explained: How It Works in India (2026)

Imagine receiving your monthly electricity bill and seeing a negative number under "Units Consumed." For thousands of homeowners across India, from the leafy lanes of Vasant Kunj to the modern apartments in Noida Extension, this isn't a dream—it is the reality of net metering.

As electricity tariffs in cities like Delhi and Mumbai climb toward ₹8–10 per unit, the net metering calculation India uses has become the single most important factor for solar ROI. Whether you are wondering how net metering works or how to interpret your first solar-integrated bill, this guide provides the 2026 roadmap for mastering your energy credits.

What is Net Metering and How Credits Work?

Net metering is a billing mechanism that credits solar energy system owners for the electricity they add to the grid. In India, under the PM Surya Ghar Yojana, net metering is the standard for residential rooftop systems.

The Flow of Energy

When your solar panels generate electricity during the day, your home uses that power first. This is called "self-consumption." If your panels produce more than you need (say, on a sunny Sunday afternoon), the excess flows back through your meter into the DISCOM's grid.

Conversely, at night when your panels are dormant, you pull electricity back from the grid. A specialized bi-directional meter (Net Meter) tracks both flows.

How Credits Work

1. The Monthly Cycle: At the end of the billing month, your DISCOM subtracts the exported units from the imported units.
2. Carry-Forward: If you exported more than you imported, the surplus is "carried forward" to the next month as credit units.
3. The Settlement Period: Usually, in March or April, the DISCOM does an annual "true-up." If you still have surplus credits, the DISCOM pays you for them (usually at a lower APPC rate).

Step-by-Step Net Metering Calculation

To understand the net metering formula India uses, you must look at your bill through the lens of three variables:

• Import (I): Units taken from the grid.
• Export (E): Excess solar units sent to the grid.
• Net Units (N): The taxable units (I - E).

The Net Metering Formula

Note: If 'E' is greater than 'I', your billable units are zero, and you only pay fixed charges (based on your sanctioned load) and taxes like the PPAC surcharge in Delhi.

Understanding Generation vs. Export

One common mistake is thinking "Export" equals your total solar generation. It doesn't.

• Total Generation: What your solar inverter produces.
• Self-Consumption: What your home uses immediately.
• Export: (Total Generation) - (Self-Consumption).

How to read your solar electric bill correctly requires looking at the "Export" reading on the meter, not just the inverter display.

Net Metering Bill Calculation Example (Monthly)

Below is a net metering bill example for a typical 5kW solar system in Gurgaon or Delhi, assuming an average generation of 600 units per month.

In this scenario, the homeowner reduced their bill from ₹6,400 (for 800 units) to just ₹1,600 plus fixed charges—a 75% reduction. You can verify your specific numbers using our Solar Calculator.

State-wise Net Metering Policy Comparison (2026)

Different states have varying rules regarding the maximum system size and how they pay you for surplus. Here is how the major regions compare:

In Delhi, the Delhi Electricity Regulatory Commission also provides a Generation-Based Incentive (GBI) of ₹3/unit for residential systems up to 3kW, making the net metering calculation India offers in the capital particularly lucrative.

Real Example: A 3BHK Home in Noida

A family in Indirapuram with a monthly bill of ₹7,000 (approx. 900–1000 units in summer) installed a 7kW system.

• System Cost: ₹3,85,000 (after subsidies).
• Monthly Generation: ~840 units.
• Net Units: In months where they use 1,000 units, they only pay for 160 units.
• Savings: ~₹6,200 per month.
• Payback: Their system will pay for itself in less than 4.5 years.

This homeowner utilized an SBI Solar Loan to fund the installation, making the monthly EMI almost equal to the savings generated.

Common Net Metering Myths Debunked

Myth 1: If the grid goes down, I still have solar power.

Fact: Standard on-grid net-metered systems shut down during power cuts for safety (Anti-Islanding). If you need power during outages, you need a Hybrid Solar System.

Myth 2: The DISCOM pays me my consumption rate for surplus units.

Fact: No. If you import at ₹8/unit but export a surplus, the "true-up" payment at the end of the year is usually at the APPC rate (approx. ₹3-4). This is why we recommend sizing your system to cover your consumption rather than aiming for "profit."

Myth 3: Net metering is the same as Gross Metering.

Fact: In Gross Metering, all your solar generation is sold to the grid at a fixed feed-in tariff, and you buy all your power back at the retail rate. For Indian homeowners, Net Metering is almost always more profitable because it offsets high-slab retail tariffs.

How to Apply for Net Metering in India

1. Feasibility Study: Check if your sanctioned load supports your desired solar capacity.
2. Solar Installation: Choose an empanelled vendor like Bridgeway Power.
3. Application: Submit the net metering request on the National Portal for Rooftop Solar.
4. Inspection & Metering: The DISCOM inspector verifies the site and replaces your old meter with a Uni-directional/Bi-directional meter.
5. Commissioning: Once the "Green Certificate" or Commissioning Report is issued, your Net Metering billing begins.

Frequently Asked Questions

What happens to my solar credits at the end of the month?

In the Indian net metering system, any surplus units you generate are carried forward to the next billing month. Use them to offset higher consumption during peak summer months or family functions.

Is there a limit to how much solar I can install for net metering?

Yes, most states (like Delhi, UP, and Haryana) limit the solar system size to 100% of your sanctioned load. For example, if your meter load is 5kW, you can usually install up to a 5kW solar plant.

Can I get net metering if I live in an apartment?

Yes, through Virtual Net Metering (VNM). This allows residents of societies in Delhi and other states to install a common solar plant and have the credits divided among individual electricity bills.

Does net metering work during rain or cloudy days?

Yes, but the efficiency is lower. Your bi-directional meter will simply record more "Import" units during these days. The how net metering works benefit is that your sunny day "Exports" will offset these "Imports" over the billing cycle.

How much does a net meter cost in India?

Usually, the cost of the meter and testing (RCT) ranges from ₹2,500 to ₹10,000 depending on whether it is single-phase or three-phase and the specific DISCOM charges.

Conclusion

Understanding net metering calculation India rules is the key to unlocking the full financial potential of your roof. By effectively "banking" your units with the grid, you can effectively bring your electricity bill down to zero, even including the BSES bill increases we see annually.

At Bridgeway Power, we handle the entire net metering paperwork and DISCOM coordination for you, ensuring your system is commissioned in record time.

Ready to see your meter run backward? Contact us today for a free site survey and a customized savings roadmap. Brom Noida to Faridabad, we've helped 5,000+ homeowners go solar with confidence.

© BRIDGEWAY POWER

FAQ

How is net metering credit calculated month to month?

Units generated minus units imported. If generation exceeds import, the surplus rolls over to next month at full retail tariff for 12 months. Any leftover at year-end is settled by the discom at avg pooled cost (~₹2.85/unit in Delhi 2026).

What is gross metering vs net metering?

Gross meters record every unit your solar produces and pay a fixed feed-in tariff (usually low, ₹2.85–3.50/unit). Net metering only counts import minus export at your retail slab rate — always more profitable for households.

Is there a system-size cap for net metering?

Yes. Delhi allows net metering up to 100% of sanctioned load or 1 MW, whichever is lower. Domestic connections up to 10 kW get net metering by default; larger systems need discom approval upfront.

Does net metering apply to prepaid meters?

Yes, but the meter must be replaced with a bidirectional (import + export) meter. Discom does this free after inspection; the swap typically takes 15–25 days after commissioning.