Net Metering: Know Everything About Net Metering

Net Metering

If you are looking into solar energy systems for your home, it’s important to become familiar with net metering in India. The policies or net metering agreements outline how customers are billed and credited for power.

Solar panels on your roof absorb sunlight to generate electricity that runs your home. The power generation is maximum during peak sun hours (which is a 4-8 hour window) when the panels receive direct sunlight. This window of peak sun hours varies based on the weather condition, location, and other factors.

On average, households aren’t able to use all the energy generated in this time window. Energy needs vary and tend to exceed or fall short of what the solar panels can generate in a day. Meanwhile, the solar panels sit ideal during the night hours when your home still requires energy.

With a net meter connection, you have a solution for these power challenges that come with a home solar system.

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What Is Net Metering?

Also known as Net energy metering (NEM), a net metering system is a metering and billing mechanism designed to monitor and record the flow of power between a solar energy system and the government grid. Solar meters are an important aspect in the design of privately-owned grid-tied solar energy systems. 

The net metering solar arrangement allows you to send unused surplus power to the grid instead of letting it get wasted. Also, it proves to be an economical alternative to an off-grid solar system framework where expensive solar batteries are used as a means of energy storage. 

The net metering concept is highly rewarding for residential solar owners who receive energy credit for transferring excess solar electricity to the grid. Homeowners can use these credits to purchase electricity when their energy demand exceeds what the panels can provide.

How Does a Net Metering Solar System Work?

A solar power system is tied to a utility grid via a solar meter and the main service panel or circuit. When the solar panels generate more power than required at the site, the power meter directs the unused solar energy to the grid. At this point, the meter is reversed from its usual direction. Thus, a bidirectional meter for solar is required to facilitate the net metering arrangement. 

Bi-directional means the meter works in both directions (export and import of power). It measures the units of grid electricity purchased (when on-site power demand exceeds the on-site solar energy output). A bidirectional solar energy meter also measures the transfer of surplus electricity to the grid. In the latter case, your electric meter runs backwards, even to the point of offsetting your grid withdrawals. 

Method of Billing

The customer settles the “net” of inflow and outflow transactions. If your grid exports are higher in a month, you may see a notably lower, even negligible, electric bill.

For example:

Rate of electricity exported to the grid during the day: Rs. 100

Rate for electricity imported from the grid at night: Rs. 120

Net bill for the day: Rs. 20

With a net metering solar system, you receive a credit to your bill for every unit of solar electricity transferred to the grid. When your solar generation is reduced or zero, you can pay for your grid withdrawals using the banked solar credits. You can count on your bidirectional electric meter to maintain an accurate record of this energy exchange every month.

It’s important to note that each state’s net metering regulations differ. Consumers are advised to reach out to the local DISCOM company for complete details. These include the net metering application process, the tariff rates for exports and imports, and the type of net meter to be installed.

The Benefit of Net Metering System

The net metering policy increases the monetary advantages of solar energy. An electric meter for solar panels eliminates the need to buy expensive solar batteries for power storage. This makes solar energy systems more affordable, promoting sustainable energy use among residential and commercial consumers. Net metering is beneficial for both consumers and power companies in many ways, such as:

Reduced Cost of Solar Systems: As a solar system owner, you can opt for a solar meter connection to put the extra solar electricity to good use. This prevents the need for investing in costly solar batteries to store surplus solar energy. You only pay your utility company a nominal fee to install a bidirectional solar meter.

Financial Rewards: Metering your solar energy system amplifies your savings on the monthly utility bills. Solar credits become a passive income source, allowing you to purchase grid electricity when required. These financial rewards continue for the entire lifespan of a rooftop solar system (i.e., 25 years).

Low Maintenance Cost: Unlike solar batteries with high maintenance and replacement costs, a net metering system is a cost-effective option. 

Social Contribution: The net metering system is beneficial for the grid. As more and more customers adopt distributed solar power systems, their dependence on the grid reduces. As a result, the grid becomes more reliable and resilient to meet the customers’ energy needs. Also, the problems of transmission losses, outages, and congestion are reduced.

Environmental Benefits: Net metering also promotes the incredible environmental benefits of solar energy. Greenhouse gas emissions and air pollution are reduced as solar power displaces the electricity generated through conventional sources. By transferring excess solar power to the grid via net metering, consumers can help lower the burden of meeting energy demands on natural gas or coal plants.

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How to Apply for Net Metering in India

Each state may have a different procedure for installing a net metering system. Different power distribution companies require customers to follow their policies to have a net meter integrated into their solar system design. Here’s what you can expect in a net metering application and installation procedure:

  1. Customers must send an application seeking permission from their state DISCOM company ot install a rooftop solar panel system.
  2. An authorised DISCOM official will conduct a site verification within three days after application.
  3. Upon successful inspection, you can expect approval within 15 days of submitting your application.
  4. Fill up the online net metering application by visiting the official website of your local DISCOM company.
  5. Consumers must sign a net metering agreement provided by the DISCOM official within three days of applying for net metering.
  6. Once the solar system is set up, consumers must submit property papers, a solar system certificate, an installation certificate, and the prescribed net metering fees.
  7. Again, a DISCOM official visits to inspect the installed solar power system. A bidirectional solar meter is paired with your solar system if all the regulations are met.

Approval Checklist for Net Metering

A solar net meter application process requires a number of documents. Here’s a checklist of the common documents that applicants must submit.

Stage-1 

  • A duly signed application (submitted online or offline)
  • Proof of roof right and occupancy
  • ID proof with the applicant’s signature
  • A copy of an electric bill (recently paid)
  • Applicant’s photograph
  • An undertaking signed by a registered customer (must be attested by a notary public as well)
  • Applicants who are a tenant or co-owner of property must submit the NOC of the owner or co-owners

Stage-2

  • A duly attested registration form
  • Subsidy sanction request letter (if the customer avails the subsidy)
  • EPC agreement for CAPEX and PPA for RESCO.
  • Receiving letter for metering energy application
  • Coloured photo of the site (before solar panel installation) with date and time 
  • Project report as per the Annexure-D format of tender document
  • Single-lined diagram of the solar plant
  • System certification for the PV module inverters
  • Specifications of inverter and solar PV module
  • Non-judicial stamp paper agreement for metering energy connection

Solar Subsidy on Net Metering Solar System

Net metering solar systems installed for residential use are eligible for government subsidy aid. The Ministry of New and Renewable Energy (MNRE) is offering subsidies to homeowners and housing societies for embracing solar energy and tying their solar systems to the local grid. Eligible consumers can benefit under the pan-India simplified solar subsidy scheme and reduce their upfront cost of purchasing a rooftop solar PV system.

Depending on the solar system size, a fixed subsidy amount is offered across the following capacity slabs:

Rooftop Solar System Capacity Applicable Subsidy (₹)
Up to 3kW 18,000/kW
Above 3kW and up to 10kW 9,000/kW*
Above 10kW 1,17,000**
Resident Welfare Associations (RWA) / Group Housing Societies (GHS) Rs. 9,000/- per kW

For common facilities up to 500 kWp @ 10 kWp per house, with the upper limit being inclusive of individual rooftop plants already installed by individual residents in that GHS/RWA at the time of installation of RTS for common activity.

Note: *₹18,000/kW for the first 3 kW and ₹9,000/kW for the rest of the capacity up to 10kW.

**The subsidy amount is fixed for rooftop solar systems above 10kW capacity.

Eligible consumers can apply for solar subsidy online by visiting the official website of the National Portal for Rooftop Solar. The online portal provides a simple, transparent and quick process for the application and disbursement of solar subsidies, which includes net metering installations.

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Get Net Metered for More Savings and a Reliable Power Supply

The net metering system is primarily a step in the direction of promoting the use of sustainable, clean electricity among residential consumers. With a solar meter, consumers enjoy the increased benefits of solar PV systems. At present, most states have favourable net metering regulations in place to reward grid-tied consumers for transferring surplus solar electricity to the grid.

Also, the subsidy scheme available for net metering solar systems allows you to reduce your initial solar investment. Considering all the advantages, it’s safe to conclude that now is the best time to switch to a metered solar system. A solar-powered home receives considerably lower utility bills than those who depend on the grid for their power needs. In the long run, the savings offset the initial solar cost in 6-8 years for most households. 

Frequently Asked Questions

Does net metering ensure power supply during an outage?

No, a solar meter is designed to shut off your solar energy system when the grid goes down. This is important to prevent the transfer of electricity from your solar panels, which can electrocute the linemen working on the grid. You can avoid power outages by adding solar batteries to your grid-connected solar system design.

Can I sell surplus electricity generated by the solar panels to the grid?

Grid-tied solar systems are designed to transfer unused solar electricity to the grid. The net energy metering requires the metre to measure this power export and add solar credit to the utility bill. The solar credits are offered per the tariff rates outlined by your power distribution company.

Can I use any standard inverter for net metering?

No. Solar panels must be paired with the size of a solar inverter. This inverter is particularly designed to efficiently convert the DC power obtained from solar panels into AC electricity. Only AC power is suitable for household purposes and grid transfers.

What type of net meter should I install for my solar system?

It’s important to obtain the prescribed guidelines from your state DISCOM company on net meter connection. In several states, consumers must install two meters to connect their solar system to the grid. Many DISCOM companies provide bidirectional meters for this purpose.

Will the monthly bill show my grid transfers and withdrawals?

A solar meter tracks the outflow and inflow of power and reflects the same on your monthly bill. The consumer must pay the net difference between the two types of transactions.

Amplus Solar

Amplus Solar

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