India’s solar journey has certainly moved beyond just installing panels. Today, the way your solar power is measured and billed plays a crucial role in deciding savings.
For anyone planning rooftop solar, understanding metering models is essential before installing the solar panels.
Metering models help decide whether you can save directly on your electricity bill or earn separately for the power you export to the grid.
Indian solar policies regulate both net metering and gross metering, but the benefits widely differ. Finding difficulties in picking the right option can only reduce your returns, even if your system performs well.
Keep reading to learn more about net metering and gross metering, the way each system works, how savings are calculated, and which option remains the better choice for homes and businesses in India. This clear comparison will help you make confident and informed decisions.
What Is Net Metering?
Net metering is a billing system where electricity produced by your solar system will be first used by your home or business. The extra generated power that you do not consume will be sent back to the grid.
Your electricity bill is calculated based on the net units you import from the grid after adjusting it with the exported units.
In net metering, one bi-directional meter helps track both electricity sent to the grid and electricity drawn from it.
If your solar panels have been generating more power than you use during the day, then the excess is credited. At night or during lower power generation, you can draw more power from the grid.
Net metering is commonly used by homes and small businesses, mainly because it maximises self-consumption. Since retail electricity rates remain higher than export tariffs, utilising solar power directly gives better savings.
This model is widely adopted with rooftop based solar panel installation in residential buildings where daytime consumption remains moderate, given bill reduction as your main goal.
How Net Metering Works
- Solar panels help generate electricity during sunlight hours
- Power is first consumed by electrical appliances within the home
- Excess electricity gets exported to the grid
- Monthly bills will adjust imported and exported units
Our in-house team of solar panel experts will help plan your residential net-metered system, design the right capacity, manage approvals, and ensure smooth integration with local DISCOM rules.
What Is Gross Metering?
Gross metering works differently from net metering. In this system, all electricity generated by the solar system will be sent directly to the grid itself. The consumer cannot use solar power directly for their own consumption.
Your home or business continues to receive electricity entirely from the grid, just like before installing solar.
An individual export meter helps record the total solar power generated and exported. The utility pays you for this power based on the fixed feed-in tariff as decided by the state government.
Gross metering is quite commonly used in large rooftops, commercial buildings, or locations where policies mandate grid-only export.
Since feed-in tariffs are usually lower when compared to retail electricity rates, savings remain on the lower rate as well.
This particular metering model heavily relies on state government regulations and tariff structures. It suits the best for users who have limited on-site consumption or where policy does not allow self-consumption.
How Gross Metering Works
- Entire solar output gets directly exported to the grid
- Grid manages and supplies 100% of consumption
- Separate meters will be installed to track export and import
- Settlement happens at feed-in tariff rates
If your solar project involves gross metering, our solar expert team will ensure the project supports policy-compliant system design and accurate export metering to maximise your returns under state tariffs.
Gross Metering vs Net Metering – Key Differences
Gross metering and net metering are two distinctive ways of measuring and billing electricity generated from a solar power system.
Although both these models let you connect your solar system to the grid, choosing the most effective metering option has a direct impact on your electricity bill and long-term returns.
| Factor | Net Metering | Gross Metering |
| Solar power usage | Solar power generated is directly used first by the consumer. | Entire solar power generated is sent to the grid. |
| Billing method | Billing is based on net units consumed after adjustment. | Consumption and export are billed separately. |
| Meter type | One bi-directional meter is used. | Two separate meters are required. |
| Savings potential | Savings are higher due to retail tariff offset. | Savings are lower due to fixed feed-in tariffs. |
| Ideal for | Best suited for homes and small businesses. | Better choice for large rooftops or mandated cases. |
Some noteworthy key differences are:
- Net metering really pays off for people who use most of their electricity during the day. You get to use your own solar power, so you see the savings right away. Gross metering doesn’t offer that as solar energy generated goes straight to the grid, and you will not be rewarded for what you use on-site.
- When electricity prices go up, net metering becomes even more valuable. You get to offset those higher rates with your own solar energy. Gross metering, on the other hand, depends on whatever fixed feed-in tariff the electricity board sets, and that’s often way less than what you would pay as a consumer.
- Net metering also gives you more flexibility if utility rates change in the future. Gross metering relies on whatever policy or tariff is in place, with no room to adapt.
Bottom Line: Solar systems with net metering usually pay themselves off a lot faster. With gross metering, the payback period drags out longer because you’re stuck with lower export rates.
Understanding all these differences helps you select a metering option that matches your usage pattern and local regulations.
Difference in Savings Between Net and Gross Metering
The savings you earn from a solar system depend largely on the metering model used. Net metering and gross metering calculate financial benefits in different ways, which directly affects monthly bills and long-term returns.
Understanding this difference helps you estimate realistic savings before choosing a metering option.
Savings Under Net Metering
Under net metering, savings come from using solar power directly within your home or business. Every unit of solar electricity you consume reduces the amount of power you buy from the grid at regular electricity tariff rates.
This results in higher monetary savings, especially for users with consistent daytime consumption.
Over time, rising electricity tariffs further increase the value of net metering savings, leading to a shorter payback period.
Savings Under Gross Metering
In gross metering, all solar power generated is exported to the grid and paid at a fixed feed-in tariff. Since this tariff is usually lower than standard electricity rates, your total savings will remain limited.
Your electricity bill remains largely unchanged, and returns depend mainly on policy-defined export rates rather than usage patterns.
Our team of solar experts will evaluate your electricity bills and consumption profile to recommend the best metering option that offers higher savings and a faster payback period.
Net Metering vs Gross Metering – Simple Calculation Example
A simple calculation helps explain how savings differ under net metering and gross metering.
Let us consider a 3 kW rooftop solar system that generates 360 units of electricity in one month.
Net Metering Example
Assume your home consumes 250 units during the day when solar power is available, and the remaining 110 units are exported to the grid. In this case, the 250 units are used directly, reducing the electricity you buy from the grid at normal tariff rates.
Your monthly bill is calculated only on the balance units you import after adjusting exported units.
This results in higher savings because most solar power offsets regular electricity charges.
Gross Metering Example
Under gross metering, all generated units, for example, 360 units generated in a day will be exported to the grid at a fixed feed-in tariff. You can continue to purchase electricity separately for all your electricity consumption.
Since feed-in tariffs most often remain lower than retail electricity rates, the overall financial benefit will be lower when compared to net metering.
When compared to both of these metering options, net metering gives better and stable financial returns for residential users, since savings are calculated at higher retail rates.
By hiring our solar panel installation services, you can clearly understand how each metering option can impact your monthly savings and make better informed decisions.
Net Metering vs Gross Metering in India
In India, both net metering and gross metering are allowed, but your choice must depend largely on DISCOM regulations and state-level policies.
The MNRE (Ministry of New and Renewable Energy) provides a broad framework, while individual states decide how these metering models are implemented.
Some states actively promote net metering for residential users to encourage self-consumption and reduce grid load.
Other states prefer gross metering, especially for larger systems, to maintain better control over power flow into the grid.
DISCOMs play a key role in deciding capacity limits, applicable tariffs, and approval conditions. In recent years, India has also started moving toward hybrid models such as net billing, which combine features of both systems.
As rules vary by location, understanding the local state policy is crucial before choosing a metering option to ensure compliance and realistic savings.
Which Is Better – Gross Metering or Net Metering?
Choosing between gross metering and net metering must depend on the ways you utilise electricity and what kind of solar power generation you rely on in your solar system.
Based on your usage pattern and policy, you can pick the best metering option.
Net Metering Is Better If
- You are a Residential user: Homes benefit more because solar power is first used inside the house, reducing monthly electricity bills directly.
- You Rely on High daytime electricity usage: Electrical appliances used during the day can instantly consume solar power, increasing self-consumption and savings.
- Your Goal is maximum savings: Net metering usually delivers better long-term savings and a faster return on investment.
Gross Metering Is Better If
- You Own a Large Commercial Rooftop: Bigger systems can focus on exporting all generated power to the grid.
- State Policy Mandates it: Some states allow only gross metering for certain capacities or consumer categories.
- Your Focus is on Power Export Income: Revenue depends on feed-in tariffs rather than bill reduction.
A professional assessment done in your place by our expert team will help choose the right metering model based on state rules, rooftop size, and help you understand the real savings potential.
Pros and Cons of Net Metering and Gross Metering
Understanding the key advantages and limitations of both net metering and gross metering will help you make better informed decisions.
Net Metering – Advantages & Limitations
Net metering offers maximum advantages for both homes and small businesses. The biggest benefit of it is direct bill reduction. Solar power will be first used on-site before exporting the excess units to the grid.
This kind of operational efficiency leads to higher savings and faster return on investment, especially for users who rely on daytime consumption. Billing remains simple as net metering follows a single bi-directional meter.
However, net metering has its set of limits as well. System capacity is most often capped by DISCOM rules, and surplus generation and exports may not always be covered or paid in cash.
Savings will depend upon retail electricity tariffs and the respective state-specific policies.
Gross Metering – Advantages & Limitations
Gross metering works well for large rooftops and policy-driven projects. All generated solar power is exported, creating a predictable income through feed-in tariffs.
It suits commercial setups where self-consumption is low.
On the downside, tariffs are usually lower than retail rates, which reduces overall savings. Separate meters and policy dependence can also affect long-term returns.
Frequently Asked Questions
What is the main difference between gross metering and net metering?
Net metering adjusts your bill based upon the electricity consumed after solar usage, while gross metering will export all solar power back to the grid and bills your consumption separately.
Which metering system offers more savings in India?
In most Indian states, the net metering system offers higher and better savings, mainly because self-consumed solar power can directly offset high retail electricity tariffs.
Is net metering still allowed in India?
Yes, net metering is still followed in India, but its availability, system size limits, and settlement rules mainly depend on individual state DISCOM policies.
Which is best for residential solar users?
Net metering is generally the best choice for residential users since it maximizes bill reduction through self-consumption of solar energy during daytime usage.
What are the disadvantages of gross metering?
Gross metering usually provides lower financial returns, mainly because of feed-in tariffs that remain lower than the retail electricity rate and rely heavily on state government policies.
What is the net metering limit?
Net metering limits vary from one state to another in India, and it usually gets capped between 1 kW and 10 kW for residential systems with certain technical conditions.
How to calculate net metering?
Net metering is calculated by subtracting the exported solar units from the imported grid units, and billing is done only based on the net electricity consumed.
Conclusion
Gross metering and net metering serve for different purposes, but for most homeowners, net metering helps in achieving better savings and faster investment returns.
Gross metering remains the best choice for large rooftops and policy-driven installations, while net metering works best for daytime and all-day electricity consuming users.
Before choosing the metering options, ensure you understand the state-specific solar policies and DISCOM guidelines.
At EL SOL Power Solutions, the best and most trusted solar company in Kerala, our in-house team are experts in selecting the right metering option, managing approvals, and maximising long-term benefits with confidence.
Give us a phone call to understand the metering options and the best option given your solar power generation needs.
