Net Metering in India: How It Works and What’s Changed

Regulator: State Electricity Regulatory Commissions (each state sets its own detailed rules within central guidelines)

Net metering is the mechanism that makes rooftop solar financially attractive for most households: a bidirectional meter tracks both the power a household draws from the grid and the surplus it exports back, with the DISCOM billing only the net difference over a billing cycle.

How it typically works: During sunny daytime hours, a home’s solar system often generates more power than the household is using — that surplus flows to the grid and is credited. In the evening, when solar generation drops to zero but consumption rises, the household draws power back from the grid, effectively “spending” the credit it built up during the day.

What varies by state: Maximum sanctioned load eligible for net metering, whether unused credits carry forward to the next billing cycle or lapse, the compensation rate for any surplus exported beyond what’s consumed, and the specific capacity slab (often capped around 1 MW or a percentage of sanctioned connected load for larger installations).

Homeowners and installers should always check their specific state DISCOM’s current net metering regulation before finalizing a system size, since oversizing beyond what net metering rules credit can reduce the financial return on the investment.