Net Metering in India: State Rules, DISCOMs and PM Surya Ghar

India is one of the larger markets where true 1:1 net metering is still the norm - a notable position in 2026, when Pakistan, California and the Netherlands have all moved away from it.

The catch is that there is no single Indian net-metering policy. Electricity is a concurrent subject, regulation sits with state electricity regulatory commissions, and delivery sits with state DISCOMs. What you get depends heavily on your state.

Rules, caps and credit terms differ by state and are revised regularly. Confirm the current position with your own DISCOM before sizing a system.

How the Indian model works

The standard arrangement:

• A bidirectional meter records import and export.
• Exports offset imports at the retail rate.
• Net surplus in a billing period is carried forward as units, not cash.
• At the end of a settlement year, unused credit is usually either forfeited or bought out at a low rate.

That last point is the one that quietly decides your economics. Credits typically carry for up to 12 months, and a system sized to bank a large annual surplus may simply lose it at settlement. Sizing to your annual consumption rather than beyond it is usually the right call.

The three variables that differ by state

1. Capacity cap

States set a maximum system size for net metering, usually expressed as a percentage of your sanctioned load or connected load. Going above it does not mean you cannot install

• it usually means you are pushed onto a different scheme.

2. The gross-metering threshold

This is the big one. Several states apply net metering below a capacity threshold and gross metering above it.

The distinction matters enormously. Under gross metering, everything you generate is sold to the DISCOM at a fixed rate and everything you consume is bought at retail. Self- consumption gains you nothing, because the flows are separate.

If the gross rate is below your retail tariff - which it usually is - crossing that threshold can make a bigger system earn less than a smaller one. Always check where the line sits in your state before finalising capacity. We compare the schemes in net metering vs net billing vs gross metering.

3. Credit settlement

• How long credits carry (commonly up to a year).
• Whether leftover credit is paid out, and at what rate.
• Whether the settlement year aligns with the financial year.

PM Surya Ghar Muft Bijli Yojana

The central rooftop subsidy scheme has substantially increased residential installation volumes. Two things are worth understanding about how it interacts with metering.

Net metering is a prerequisite, not an optional extra. The scheme's promise depends on exporting surplus and receiving credit, so a grid connection with a bidirectional meter is part of the package. An off-grid system does not qualify.

Delivery is still through your DISCOM. The subsidy is central, but feasibility approval, metering and inspection are handled locally. In practice this means the central scheme's timelines are only as fast as your DISCOM's process.

Subsidy amounts are tied to system capacity, with the benefit concentrated in smaller residential systems - which aligns neatly with the advice to size for your own consumption rather than for maximum export.

Practical sequence for a rooftop connection

1. Check your sanctioned load. It caps your permitted system size in most states.
2. Find your state's net-metering regulation and the gross-metering threshold.
3. Apply for feasibility approval with your DISCOM.
4. Install through an empanelled vendor if you are claiming subsidy - eligibility usually depends on it.
5. Inspection and meter replacement. The DISCOM fits the bidirectional meter.
6. Commissioning certificate, then subsidy disbursement where applicable.

The step that most often stalls is feasibility approval, typically over distribution transformer capacity in your area - a constraint you cannot influence from your rooftop.

What to watch

Pressure on 1:1 netting. The cost-shifting argument that ended net metering in Pakistan and California is made in India too. Several states have already moved larger systems to gross metering, which is the same argument applied at the top end. Assume today's terms are not permanent, and check whether your state offers any grandfathering.

ALMM and equipment lists. Module sourcing rules affect which panels qualify, and exemptions have been extended more than once. If subsidy eligibility matters to you, confirm your equipment qualifies at the time of purchase rather than assuming.

Time-of-day tariffs. As ToD pricing spreads to residential consumers, when you import starts to matter as much as how much. That shifts the advantage toward daytime self-consumption and, eventually, storage.

Working out your own numbers

Whatever your state's rules, the arithmetic on your bill is the same shape: imports on one side, exports on the other, surplus carried forward.

Our free net metering calculator handles peak and off-peak imports separately, applies any export deduction, and carries your previous surplus - and it works in rupees. Enter your readings and you will see the net position for the cycle immediately.

For a walkthrough of taking the readings themselves, see how to read your net meter.

Frequently asked questions

Does India have net metering or net billing? Predominantly net metering, at the retail rate, for residential rooftop within the state capacity cap. Gross metering applies above certain thresholds in several states.

How long do my credits last? Commonly up to 12 months, with settlement at the end of the year. The exact treatment of leftover credit is state-specific.

Can I install a system larger than my sanctioned load? Usually not under net metering. You can often apply to increase your sanctioned load, which is a separate process with its own charges.

Is net metering required for PM Surya Ghar? Yes. The scheme assumes a grid-connected system exporting surplus, so a bidirectional meter and DISCOM approval are part of the process.