What is Solar Net Metering? Explore Steps to Apply For a Net Metering System Under PM Surya Ghar Yojana For Homes in 2025

Solar net metering is a billing mechanism where DISCOM installs a bidirectional net meter/ smart meter to record both import (power a solar system takes from the grid) and export (extra electricity units the system sends to the grid) between a solar PV system and the utility grid. The solar bill shows the net difference between the import and export. The entire process of tracking and recording the energy exchange between a grid-connected solar system and the main utility grid is known as solar net metering. 

The bidirectional net meter/ smart meter, also known as a net metering system or a solar meter, is the key component in solar power net metering that records the unit exchange. 

• When solar panels produce more power: The excess energy is sent to the grid through the net meter.
• When solar power is low: The solar meter imports electricity from the grid to keep the load running.
• The net difference between import and export is recorded: If the solar system sends more electricity to the grid, the consumer gets credits, which are either settled at the end of the month or the end of the year. If more electricity is imported than exported, the consumer gets a solar bill for the extra electricity grid used. 

Some states settle the net carryover monthly, while others do a final yearly settlement. The state regulator sets the exact method, so it can differ by location.  

• Net metering policy: Every state has its own electricity regulatory commission, so net metering (NM) policies differ across states. In most cases, solar systems from 1 kW to 1,000 kW are eligible for net metering, though some states restrict it to 500 kW, based on the sanctioned load. For homes, the average rooftop solar capacity is usually 4-5 kW, while for housing societies (GHS/RWA), it is generally between 100-200 kW.   
• Application procedure to get net-metering approval: For subsidy projects, the Indian government/MNRE, have launched a very simplified National Portal, currently known as PM Surya Ghar Portal. Consumers can apply for the net metering system on their own through this portal. 

Solar net metering is beneficial for residential installations, as it eliminates the need to purchase expensive lithium batteries for storing excess solar energy. That’s because there’s generally no limit to how many units of electricity can be exported to the grid. So, no matter how many extra units of electricity an on-grid solar system produces, they will be sent to and stored in the grid. 

In this blog, we will explain what solar net metering is and how it works, the process to apply for a net metering system, the differences between net and gross metering, the cost of solar meters in India, and the benefits of solar net metering. 

We will also walk you through the reasons why installing on-grid rooftop solar panel systems for homes and housing societies is better than opting for off-grid solar systems or hybrid solar systems.  

TL;DR Summary Box: What is the Net Metering Policy For Homes Under PMSGY in 2025?

The Net Metering Policy for homes under the PM Surya Ghar Yojana (PMSGY) in 2025 is decided by each state’s electricity regulatory commission. Hence, the rules vary across states. 

• Most states allow net metering for rooftop solar systems ranging from 1 kW to 1,000 kW.
• Some restrict it to 500 kW, depending on the sanctioned load. 

On average, residential rooftops have a solar capacity of 4-5 kW, and housing societies (GHS/RWA) usually install PV systems between 100-200 kW.

Here are the main topics covered in this blog in detail:

*Please note: The cost of the solar meter varies widely across states and DISCOMs and can change without notice. The figures shared here are indicative only and may differ by city, sanctioned load, phase (single vs three), meter type (net vs smart), make/model, stock, and current DISCOM policy. In some states like Maharashtra, the meter is supplied by the utility at minimal cost to the customer, while in others it must be purchased through empanelled solar vendors. Always confirm the latest price, inclusions/exclusions, and process with your local DISCOM and your installer before budgeting or placing an order. This information is not a quotation or a commitment to supply.

What is Solar Net Metering?

Solar net metering refers to the net difference between the solar electricity your rooftop solar system generates and the total electricity your household consumes. The discom installs a bidirectional net metering system/smart meter to track and record the electricity produced by the solar system, as well as the amount it exports and imports to and from the grid. 

• If the net units exported are more: You will earn credits because you supplied more electricity to the grid.
• If the net units imported are more: You will have to pay for the net additional units you used from the grid on top of what your solar system generated.

How Does Solar Power Net Metering Work?

The process is straightforward, where the bidirectional solar meter allows and records the electricity exchange between the grid-connected solar system and the grid.   

Let’s check out how solar power net metering works in simple steps: 

• Step 1 – Solar panels generate usable electricity: Solar PV cells in solar panels capture solar radiation and turn it into direct current (DC) output. The DC output is converted to an AC output for running household appliances. 
• Step 2 – Excess energy not consumed in real time is sent to the grid: If the solar panels produce excess energy during peak sunshine hours, the net metering system/ smart meter sends those extra units straight to the grid. 
• Step 3 – Grid electricity is imported at night or in low-sunlight conditions: Wherever needed, the solar meter imports electricity from the grid to keep the load running.
• Step 4 – A solar bill is generated based on the net difference: The net metering system has a record of all the imports and exports that took place throughout the month between your solar system and the grid. It calculates the net difference based on the unit exchange.
• Step 4A – If your solar system exported more electricity units to the grid than what it imported: The total additional units will be carried forward every month, and you’ll earn a final credit or settlement at the end of the financial year*. 
• Step 4B: If your solar system imported more electricity units to the grid than what it exported: You will receive a bill for the additional units you consumed. 

*Please note: The settlement of carried forward units can be monthly or yearly, based on your state and net metering state policy. For instance, states like Gujarat, Karnataka, and Tamil Nadu settle the net units on a monthly basis. On the contrary, if you export more units in states like MP, UP, Delhi, and Haryana, they’re carried forward every month and adjusted at the end of the financial year. 

How to Apply for a Net Metering System?

Apply for solar power net metering through the PM Surya Ghar National Portal. Under the PM Surya Ghar Yojana, if you apply for a rooftop solar system of up to 10 kW for your home, you don’t need to wait for your DISCOM to check and confirm whether your roof is technically suitable. It is treated as deemed feasible, which means the approval is given automatically as per the Electricity (Rights of Consumers) Rules, 2020. 

In short, for solar systems up to 10 kW, the technical clearance for net meter installation under PMSGY is assumed to be granted right away.

Above 10 kW, your DISCOM will run a technical feasibility (TF) check. After TF approval, you have to pick an empanelled solar installer for your DISCOM on the portal. The installer will install the solar system and help file the net-meter application. The DISCOM will finally inspect the rooftop solar system and install the solar meter on your property. 

Who is Eligible for Net Metering?

Here are the basic eligibility conditions across all states:

• Valid electricity connection: You must have a valid electricity connection from your local discom company in your name.
• Legal property and rooftop: The rooftop where you’re planning to build the solar system should be in your name. In short, you must own the place where the system will be installed.
• MNRE/DISCOM guidelines must be followed without a glitch: Make sure the panels, inverter, earthing, and the AC and DC distribution boxes are installed as per MNRE guidelines.
• The system being installed should be grid-tied: Solar net metering is only provided when the PV system is grid-tied. If you’re installing an off-grid solar system, net metering will not be approved. 

Steps to Apply For a Solar Meter

Let’s check out how a net metering application is applied for and approved, step by step:

• Step 1 – Consumer registers on the PM Surya Ghar Muft Bijli Yojana Portal: Once you sign up on the portal, submit the RTS (rooftop solar) application form.
• Step 2 – DISCOM checks the technical feasibility (TF) if the systems are above 10 kW: After you submit the form, the DISCOM reviews your site and loads. If they meet the rules, they email you a TF approval. If the system is up to 10 kW, the approval is given automatically, without the technical feasibility visit, as per the Electricity (Rights of Consumers) Rules, 2020.
• Step 3 – Consumer selects an empanelled solar installation company: You must choose an installer, such as SolarSquare, which is listed for your DISCOM area on the National Portal. Share your system plan and details with the DISCOM.
• Step 4 – The solar installation company installs the solar system and uploads system details: Once the system is installed, all installation documents are uploaded on the PMSGY National Portal.
• Step 5 – The DISCOM arranges for a site inspection: DISCOM sends its officials to visit your home. If the solar system follows the technical standards, they clear it.
• Step 6 – The net metering system is installed: After approval, the DISCOM fits the bidirectional net meter/smart meter at your site. The system can now be switched on. If you already have a smart meter in your property, the DISCOM officials enable the export feature, which measures the electricity going into and coming from the grid.
• Step 7 – Commissioning is shown on the portal: The DISCOM updates your meter details online. Your commissioning certificate appears in your portal account.
• Step 8 – You receive a subsidy under the PM Surya Ghar Muft Bijli Yojana: If you’re a homeowner or a housing society and you have installed an on-grid rooftop solar system, you need to enter your bank details and upload a cancelled cheque on the portal to receive your subsidy. After verification, the subsidy is sent to your bank within 30 days.

What is the Cost of a Solar Meter Used for Net Metering?

The cost of a solar meter varies from DISCOM to DISCOM and city to city. For instance, in Maharashtra, the meter is supplied by the utility company (DISCOM), and customers have to pay a minimal cost. In some other cities/states, customers have to buy solar meters through empanelled solar vendors. 

Here’s a tabulated snapshot of the estimated cost of a solar meter in different states in India in 2025:

*Please note: The cost of the solar meter varies widely across states and DISCOMs and can change without notice. The figures shared here are indicative only and may differ by city, sanctioned load, phase (single vs three), meter type (net vs smart), make/model, stock, and current DISCOM policy. In some states like Maharashtra, the meter is supplied by the utility at minimal cost to the customer, while in others it must be purchased through empanelled solar vendors. Always confirm the latest price, inclusions/exclusions, and process with your local DISCOM and your installer before budgeting or placing an order. This information is not a quotation or a commitment to supply.

What Are the Benefits of Solar Power Net Metering?

Solar power net metering makes installing on-grid rooftop solar systems for housing societies and homes very economical. Unlike off-grid solar systems or hybrid PV systems, which use a lithium battery bank to store excess solar energy, net metering utilizes the grid as the battery. It means that you don’t have to invest in buying expensive batteries because net metering allows exporting as many units to the grid as required.

Let’s check out all the benefits of solar net metering in detail:

• Makes solar installation cheaper: Since the grid stores all excess solar energy, net metering makes solar installation cheaper by eliminating the requirement for expensive battery storage systems. As a result, on-grid solar systems are the most economical PV systems for homes and housing societies. 
• Reduces monthly electricity bills: Since net metering prioritizes using solar energy first, the reliance on expensive grid electricity drops. On-grid rooftop solar systems can lower electricity bills by 90% or more. 
• Eliminates the need for a lithium battery bank: The grid serves the function of a storage bank, as all excess solar energy is safely sent to the grid through net metering. Hence, you don’t have to buy any additional storage system to store solar energy for use at night.
• Is eligible for a subsidy under the PM Surya Ghar Muft Bijli Yojana: Homeowners and housing societies installing on-grid rooftop solar systems with a smart meter are eligible to receive a subsidy. However, you must remember that a subsidy is only provided for residential installations. You won’t get it if you install commercial rooftop systems, ground-mounted solar systems, or off-grid solar systems.
• Beneficial for the environment: Installing solar is already beneficial for the environment since it offsets carbon dioxide. Solar power net metering makes solar even more eco-friendly because it eliminates the need for batteries, which can pollute the environment. 

Let’s give you a cost comparison between rooftop on-grid solar systems in India and off-grid solar systems that need batteries to prove how solar net metering makes on-grid solar more economical and better than off-grid solar.

*Please note: The above-mentioned solar plate price for on-grid solar systems is indicative as of 10th September 2025 for the SolarSquare Blue 6ft variant. The final cost of installing an on-grid rooftop solar panel system at home depends on your DISCOM charges, product variant opted for, panel type, inverter type, mounting structure height, type of after-sales service, savings guarantee, roof height, etc. Prices are subject to change. Also, the off-grid solar system price list mentioned above is based on standard market research. The actual final cost of off-grid solar can significantly vary from the given range based on the panel type, battery type, battery capacity, inverter type, panel brand, inverter brand, etc. SolarSquare does not install off-grid solar systems. We only install on-grid rooftop solar panel systems at homes, housing societies, commercial buildings, and industries.

Want to check out how much money an on-grid solar system with solar net metering saves for you in 25 years? Use SolarSquare’s free solar panel calculator to get an estimate of solar savings vs installation cost. 

For demonstration purposes, here’s an estimate of the cost of installing a rooftop solar system in a city like Nagpur vs the money this system saves in 25 years of its life:

*Please note: The above-mentioned solar panel price of on-grid solar is indicative as of 10th September 2025 for the SolarSquare Blue 6ft variant. The final cost of installing an on-grid rooftop solar panel system at home depends on your DISCOM charges, product variant opted for, panel type, inverter type, mounting structure height, type of after-sales service, savings guarantee, roof height, etc. Prices are subject to change. Additionally, while calculating savings, we have considered the annual tariff escalation at 3% and the annual degradation at 1%. The actual final savings from solar panel installation depend on the types of solar panels you’ve installed and their efficiency, intensity of sunlight your rooftop receives, orientation of the panels and tilt angle, the pollution level and weather conditions in your city, the temperature, shadow on the roof, impact of dirt/dust, and how well you maintain your panels after installation.

Net Metering vs Gross Metering: What’s the Difference? 

In solar power net metering, you consume the solar electricity generated by the solar PV system yourself, and any excess energy is sent to the grid. You have to pay a solar bill only if the net units imported are more than the units exported. 

On the other hand, in gross metering, you export all the electricity generated by the solar panels straight to the grid. Then, electricity is imported from the grid to run loads. 

Simply put, you’re a producer in gross metering but a producer and consumer in net metering. 

• Net metering: Here, solar serves the place first. Imports are billed on net imports within the billing cycle, and any net export is credited as per state/DISCOM rules.
• Gross metering: All solar is exported at a feed-in tariff, and all use is imported at the retail tariff. The settlement shows an import bill and a separate export credit.

Here’s a side-by-side comparison of both types of solar metering in detail:

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Conclusion 

Solar net metering makes solar system installation more affordable because consumers don’t have to invest in buying expensive lithium batteries to store excess solar energy generated by the solar panels. That’s because solar power net metering allows unlimited export to the grid. No matter how many extra electricity units your rooftop solar system generates on a sunny day, they will all be sent to the grid through the solar meter.

Different states have different net metering rules on how they carry forward units and settle credits. Therefore, it’s highly recommended that consumers be aware of their state’s net-metering rules. If you have any questions regarding rooftop solar installation or solar power net metering rules in your state, book a free solar consultation call with SolarSquare today.

FAQs

Q1. What are the different types of solar metering?

Ans. The two main types of solar metering are solar net metering and gross metering. In solar power net metering, you consume electricity generated by the panels directly and export only the excess energy generated. In gross-metering, all solar electricity is first exported to the grid, and consumption is always imported from the grid.

Q2. What is the difference between a smart meter and a net meter?

Ans. A smart meter is a digital meter that can record detailed usage and often supports two-way measurement. A net meter specifically records imports and exports for solar settlement. Smart meters can also be configured to work as net meters, subject to DISCOM practice.

Q3. What are the drawbacks of solar net metering?

Ans. The only limitation in solar power net metering is that the solar system stops working when the grid is down. It means you won’t get a power supply during a power outage. This is done to ensure that linemen working on fault sites are not electrocuted.

Q4. How is solar net metering calculated?

Ans. Within a billing month, net import = imports − exports. The solar bill uses the retail tariff to net imports. If exports exceed imports, the surplus is carried forward or credited as per the state/DISCOM order.