India has three distinct metering models for rooftop solar: net metering, gross metering, and net billing. Understanding the differences matters for three practical reasons: the financial outcome for the consumer is materially different under each model, state SERCs apply different models to different consumer categories, and the battery storage decision is closely linked to which metering model applies.
This guide explains each model clearly, compares them with worked examples, and identifies which states and consumer categories use which approach.
The Three Models: Clear Definitions
Net Metering
The bidirectional meter records two numbers independently:
- Import register: Total units consumed from the grid
- Export register: Total units exported to the grid from solar
The consumer’s bill is calculated on net consumption = import − export.
- Self-consumed solar units are worth the full retail tariff rate (they are not imported, so not billed)
- Exported surplus units earn the APPC credit rate
- If credits exceed consumption in a month, the credit carries forward (monthly or annual settlement depends on state)
The key advantage: Self-consumed solar is worth significantly more than the APPC export rate. A unit consumed onsite saves the consumer what they would have paid — typically Rs. 5–9/unit at residential tariff rates in most states. The same unit exported at APPC earns Rs. 3–4.50/unit. Self-consumption is 1.5–2× more valuable per unit than export under net metering.
Gross Metering
Separate meters (or a gross-capable bidirectional meter) record:
- Total solar generation: All solar output, regardless of whether consumed or exported
- Total consumption: All grid import
The consumer receives a FiT (feed-in tariff) for total generation and pays the full retail tariff for total consumption — even for electricity that is generated and consumed on the same premises simultaneously.
The key issue: Gross metering ignores the self-consumption benefit. A unit generated and consumed onsite earns only the FiT (typically Rs. 2.50–4.00/unit in most schemes that used gross metering) while the consumer simultaneously pays the retail rate (Rs. 5–9/unit) for that unit via separate billing — because gross metering counts all consumption as import.
Net Billing
A hybrid model where:
- Export is measured separately and compensated at a defined net billing rate (different from, usually lower than, retail tariff)
- Self-consumption is credited at full retail tariff rate (not billed as import)
- Monthly settlement, no carry-forward of credits
Net billing is essentially net metering with a lower export credit rate. Self-consumed units still save at the full retail rate; exported surplus earns at the (lower) net billing rate rather than APPC.
Financial Comparison: Worked Example
Scenario: 3 kW rooftop solar system. Monthly generation: 360 units. Monthly consumption: 400 units. Retail tariff: Rs. 7/unit. State APPC: Rs. 3.50/unit. FiT (for gross metering comparison): Rs. 3.00/unit.
Under Net Metering:
- Self-consumed: 360 units (assuming consumption exceeds generation continuously — 360 units offset)
- Grid import: 400 − 360 = 40 units
- Bill: 40 units × Rs. 7 = Rs. 280 (vs. Rs. 2,800 without solar)
- Monthly saving: Rs. 2,520 (Rs. 2,800 − Rs. 280)
Under Net Metering with surplus export (if generation > consumption in some periods):
- Self-consumed: 300 units (in periods when home consumption occurs)
- Exported surplus: 60 units at APPC (Rs. 3.50)
- Grid import needed: 40 units
- Net bill: 40 × Rs. 7 − 60 × Rs. 3.50 = Rs. 280 − Rs. 210 = Rs. 70
- Monthly saving: Rs. 2,730
Under Gross Metering:
- FiT income for 360 units generated: 360 × Rs. 3.00 = Rs. 1,080
- Retail import for 400 units consumed: 400 × Rs. 7 = Rs. 2,800
- Net bill: Rs. 2,800 − Rs. 1,080 = Rs. 1,720
- Monthly saving: Rs. 1,080 (Rs. 2,800 − Rs. 1,720)
Comparison summary:
| Model | Monthly Bill | Monthly Saving | Annual Saving |
|---|---|---|---|
| Without solar | Rs. 2,800 | — | — |
| Net Metering | Rs. 280 | Rs. 2,520 | Rs. 30,240 |
| Gross Metering | Rs. 1,720 | Rs. 1,080 | Rs. 12,960 |
Net metering delivers 2.3× more annual savings than gross metering in this example. The gap widens as the retail tariff increases (typical annual escalation of 3–5%) while FiT rates in old schemes often remain fixed.
Which States Use Which Model
Net Metering (residential, current default across India): All 10 major states covered in this section — Rajasthan, Gujarat, Maharashtra, Karnataka, Tamil Nadu, UP, AP, Telangana, MP, Punjab — use net metering as the standard residential rooftop solar metering model. This is consistent with the CERC model regulations.
Gross Metering (historical, specific schemes): Gross metering was used in some earlier state solar schemes:
- Karnataka: Some commercial and institutional solar schemes in the 2010s used gross metering with FiTs. These have largely transitioned to net metering or net billing
- Tamil Nadu: Some earlier wind and solar schemes used gross metering. Current residential rooftop is net metering
- Rajasthan: Some utility-scale solar PPAs structured as gross export (all generation sold to DISCOM); not applicable to rooftop net metering
Net Billing (some commercial/large systems): Some states apply net billing rather than full net metering for larger commercial systems (above specified thresholds) or where states want to move away from APPC-rate export credits. Check the current SERC order for the consumer’s state and tariff category.
State Migration from Gross to Net Metering
A notable policy trend in India has been migration from gross metering to net metering for rooftop solar:
Why states moved away from gross metering:
- Gross metering with FiTs required DISCOMs to pay fixed rates regardless of market conditions — creating budget pressure as FiTs exceeded APPC over time
- Net metering is self-financing for the DISCOM: credits are at APPC (what the DISCOM would pay for equivalent generation), so net metering doesn’t create additional cost
- Net metering better incentivises rooftop solar (2–2.5× better economics for consumers) without requiring DISCOM budget expenditure
Current status: For new residential rooftop solar installations in all major Indian states, net metering at APPC is the applicable model. Gross metering for rooftop solar is essentially a legacy issue — existing installations on old gross metering schemes may still operate under those terms, but new applications are net metering.
Battery Storage and Metering Model Choice
Battery storage changes the optimal strategy under each metering model:
Under net metering (export at APPC, self-consumption at retail tariff):
- Battery storage is financially attractive because it shifts solar generation from daytime (when household may not consume all of it, exporting at APPC) to evening (when household consumes from grid at full retail rate)
- Effective value of storage: the difference between retail tariff and APPC (Rs. 2–5/unit), multiplied by battery charge/discharge cycles
- Battery ROI improves as retail tariffs rise relative to APPC
Under gross metering (all generation exported at FiT, all consumption billed):
- Battery storage has no financial benefit under pure gross metering — all generation is exported regardless of whether the household consumes it. A battery does not change the gross generation metered
- (Unless the system is modified to first fill the battery before exporting surplus — which requires a different metering arrangement)
Conclusion: Battery storage is most valuable under net metering. Under gross metering, batteries add cost without financial benefit.
Pro Tip: Model Metering Correctly in Your Proposals
Many Indian solar proposals incorrectly model the financial return — either using retail tariff for all exported units (overstating savings) or using APPC for all units (understating self-consumption value). The correct model separates self-consumed units (save at retail tariff) from exported units (earn at APPC). Use solar design software that separately calculates self-consumption and export for accurate financial projections.
Model Net Metering and Self-Consumption Accurately for Any Indian State
SurgePV’s financial model separates self-consumed and exported units, applies state-specific APPC rates, and correctly calculates annual savings under India’s net metering framework — not a generic export rate.
Book a DemoNo commitment required · 20 minutes · Live project walkthrough
Settlement Period: Monthly vs Annual
Independent of the metering model, the settlement period affects how surplus credits are handled:
Monthly settlement (Maharashtra, Tamil Nadu, UP, AP, Telangana, MP, Punjab):
- Surplus credits at end of month are paid out at APPC or reset to zero (varies by DISCOM/state)
- Month-to-month variation in generation affects bill variation
- Not beneficial for high-generation summer months where surplus may be wasted
Annual settlement (Gujarat, Karnataka, Rajasthan):
- Surplus credits accumulate across all months of the year
- Year-end reconciliation pays surplus at APPC or carries to next year
- Strongly favours consumers in high-irradiance states where summer generation far exceeds summer consumption
- Smooths the billing relationship: summer generation credits offset winter consumption
Annual settlement is generally more favourable for consumers in high-irradiance states. The difference can be significant: a Rajasthan consumer on annual settlement may bank 200+ surplus units per summer month, offsetting winter bills entirely.
Frequently Asked Questions
What is net metering?
Surplus solar export offsets import in the same billing period. Bill is based on net consumption (import − export). Export earns at APPC rate; self-consumption saves at full retail rate.
What is gross metering?
All solar generation is exported at a fixed FiT; all consumption is billed at full retail tariff. No self-consumption benefit. Less common now — most Indian states use net metering for residential rooftop.
What is net billing?
A hybrid: self-consumed solar saves at retail rate; surplus export is compensated at a specific net billing rate (typically lower than APPC or retail rate). Monthly settlement, no carry-forward.
Which model is better for Indian consumers?
Net metering — almost always. Self-consumed units save at full retail tariff (Rs. 5–9/unit) which is significantly more valuable than the FiT paid under gross metering for the same unit.
Does battery storage help under net metering?
Yes. Battery storage under net metering converts daytime excess (which would export at low APPC) to evening self-consumption (which saves at high retail rate). The financial benefit is the retail–APPC spread per stored unit.
