Rooftop solar has been gaining traction across India as more homeowners realize its benefits – lower electricity bills, a reduced carbon footprint, and increased home value. But did you know you can further reduce your bills through a billing mechanism called net metering?
In this article, we explain what net metering is, how it works, and the immense savings it can provide rooftop solar owners. Read on to learn how you, as a solar power producer, can benefit from net metering.
What is Net Metering?
Net metering allows rooftop solar owners to get credit for any excess energy their system produces and exports back to the grid. It’s a billing mechanism that essentially runs your electricity meter backwards when your solar panels produce more power than your home is using.
Here’s a simple example: Let’s say your typical electricity usage is 20 kilowatt-hours (kWh) per day. But on a sunny day, your 5 kilowatt (kW) rooftop solar system may produce 30 kWh. So after powering your home appliances and devices, you have 10 kWh of extra solar energy that gets fed back into the grid.
With net metering, your utility grid tracks this 10 kWh export and gives you a 10 kWh credit on your electricity bill. So your net energy consumption for that day is only 10 kWh instead of 20 kWh — essentially cutting your electricity bill in half!
Over a year, these exports can really add up, reducing your energy bills substantially.
How Does Net Metering Work?
A regular electricity meter only tracks how much energy you consume from the grid. To enable net metering, your utility will replace it with a bi-directional net meter that can track both electricity usage and any surplus solar energy you export.
This net meter continuously spins forward when drawing grid power but backwards when your solar panels produce excess energy. At the end of each billing cycle, the utility simply subtracts your exports from imports to calculate your net energy consumption and bills you accordingly.
If you have produced more solar energy than you consumed from the grid over the billing period, your net consumption will be negative. However, instead of the utility paying you cash, they will simply roll over the credit balance to the next billing cycle.
Benefits of Net Metering for Rooftop Solar Owners
Net metering unlocks tremendous value from your rooftop solar investment:
1. Drastically Lower Electricity Bills
With net metering exports offsetting your grid energy usage, your monthly bills can potentially be reduced by 50 to 100% or more!
2. Shorter Payback Period on Solar System
By accounting for higher savings from net metering, your rooftop solar system’s payback period can be reduced from 5-6 years to just 3-4 years.
3. Receive Payment for Excess Solar Energy
Some states allow annual cash payments to solar owners for any net excess energy credits at the end of 12 months.
4. Lower Cost of Solar Batteries
Since you don’t lose surplus solar energy fed into the grid, there’s less need for expensive batteries to store it.
How Much Can You Save with Net Metering?
Your actual savings will vary depending on factors like your system size, energy usage, sunshine availability, state policies, etc.
Let’s look at two scenarios:
1. A 5 kW rooftop solar system in Mumbai, without net metering
You may generate about 22 units daily but consume 30 units from the grid.
* Monthly energy consumption: 30 x 30 days = 900 units
* Monthly solar production: 22 x 30 days = 660 units
* Net units consumed: 900 – 660= 240 units
* Units offset from solar: 660 units
* Electricity bill savings = 660/900 x 100 = ~55%
2. The same 5 kW system with net metering
You export surplus solar power, earning credits for any excess energy fed into the grid.
* Monthly energy consumption: 30 units x 30 days = 900 units
* Monthly solar production: 22 units x 30 days = 660 units
* Export to grid: 22 – 30 = 8 units daily x 30 days = 240 units
* Net meter consumption: 900 units – 240 unit exports = 660 units
* Units offset from solar: 660 units
* Electricity bill savings = 660/900 x 100 = ~100%
As you can see, net metering helps increase solar energy utilization dramatically by giving you credits — and hence higher savings — for all the excess power your system produces.
Solar Net Metering Policies in India
Net metering guidelines and regulations vary across Indian states. Here are some key aspects:
* System size limit: Most states allow net metering for rooftop systems up to 1 MW capacity.
* Net metering cap: States have a capped total rooftop solar capacity eligible for net metering, typically 5% of their overall peak demand.
* Net metering period: The duration over which net metered credits are valid before they are resettled. Usually one year.
* Net metering tariffs: The rate per kWh at which utilities buy excess solar energy from net metered owners.
* Cash payments: Very few states like Chandigarh allow an annual cash payout for net excess credits. Most carry over to next year.
Check the exact policies in your state before installing net-metered solar. We recommend sizing your rooftop system so that it doesn’t produce over 100% of your annual usage to maximize savings under net metering.
Going Solar? Partner with Waaree for Best ROI
As India’s leading solar brand with over 3 decades of experience.
• Customized rooftop solar systems to meet all your energy needs
• High quality solar panels and advanced micro inverters for maximum efficiency
• Special assistance to get net metering approval from your discoms.
• Pan-India service network for periodic maintenance
