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What is Solar Net Metering and How Does it Work?

17th August 2021  

Rooftop solar systems are now less expensive to install in areas not connected to the grid. Many people are installing rooftop solar power systems due to a lack of land, improved technology, and lower installation costs.

One of the most appealing aspects of installing a rooftop solar system in your business is the availability of credits on the electricity bill. Installers must have a net meter installed at their location to claim the credit, which tracks the power sent back to the grid.

Specific procedures, such as documentation, are involved in the process of purchasing net meters. Net metering policy implementation in India has been unsteady because distribution companies do not want to lose customers who pay them a high power tariff. Each state has its policy regarding solar net metering.

India's net metering policy is currently facing numerous challenges. The major ones are lengthy clearance and approval processes. Developers are subjected to prolonged approval processes that can last anywhere from 3-6 months.

What is net metering in the solar system?

Net metering is intended to serve two primary purposes: first, to encourage greater solar adoption across the country, and second, because utilities and the entire electricity grid can benefit from the influx of low- to no-cost solar energy onto the grid.

Solar energy can help balance the cost of purchasing electricity from other sources, particularly during the summer months, when electricity bill rapidly increases.

Solar net metering is a mechanism that enables residential or commercial users who yield their electricity using solar panels or photovoltaic systems to export excess energy back to the grid. An off-grid system is typically a stand-alone system, whereas an on-grid system is connected to the fundamental utility grid and employs the net metering policy.

Solar net metering allows system owners to earn additional income by providing excess power to the grid while also compensating for shortfalls through the grid. If the amount of energy generated exceeds the amount of energy consumed, the owner is compensated for the difference.

If the amount of energy consumed exceeds the amount of power generated, it is sourced from the utility grid, and the owner only pays the net amount. Solar net metering was introduced in India to make renewable energy more affordable and accessible, with regulations varying from state to state.

How does net metering work?

You might wonder how solar net metering works, and you will get to know about it ahead. Your home does not use much electricity during the day, which is; when your solar panels are most efficient.

You are at work for most of the day, the kids are probably at school, and there's not much going on in the house, resulting in not much electricity in use. As a result, your solar panels will generate a lot of electricity at a time when you do not require it.

Without solar net metering, the additional solar energy produced through your panels is sent to the grid, and you would receive nothing in return.

With net metering, on the other hand, your utility company pays for the solar electricity you send to the grid. Utilities typically compensate you by implementing an energy credit to your electric bill for each kilowatt-hour (kWh) of solar power you send to the grid.

The net metering credits are then used to compensate for any energy you take from the grid when your solar panels are not generating electricity, such as after the sun has set. It allows you to receive the thorough economic value of all of the solar energy produced by your panels.

In other words, because your net metering credits will cancel out your future grid usage, you don't have to pay for all of the electricity you use from the grid, which is what makes net metering so worthwhile.

Have you read: 10 Steps Guide for Solar Panel Installation In 2021

What are the benefits of net metering?

Net metering can save homeowners lots of money on their utility bills each year, so it's a good reason to go solar sooner rather than later.

Here are some practical benefits of installing solar net metering:

  • Utility bill savings: The most significant advantage of net metering for solar homeowners is the reduction in utility bills. Net metering can save you large sums of money over the life of your solar panel system.
  • If your solar system is properly sized, you could potentially eliminate all of your energy costs in a billing period. However, keep in mind that your electricity bill will almost certainly include some fixed charges that net metering will not avoid.

  • Shorter payback periods: Payback periods will be relatively short in areas that offer full retail net metering than in regions that do not. Solar homeowners will save more money on their electricity bills, allowing them to recoup their investment costs more quickly.
  • Net metering is not the only factor influencing your solar payback period. The size of your photovoltaic system, the amount of electricity you utilize, the expenses of your setup, and the solar incentives and rebates available in your area will all influence how long it takes to pay off your solar panels.

  • Lessens the pressure on the grid: Residential solar panels benefit utilities and their customers by reducing the amount of strain on the electric grid distribution system. Because solar homeowners use their electricity rather than power from the grid, fewer people draw power directly from the grid.
  • Furthermore, when a solar system transfers surplus energy to the grid, that energy is used by non-solar utility customers to meet their own energy needs. It relieves even more strain on utility power plants.

  • Unneeded expensive battery storage: Net metering assures that your solar panels are used to their full potential. When your utility company offers net metering, you can use the grid as a "virtual battery” to hold the economic value of your excess solar power. Without net metering or energy storage, all additional energy would be sent to the grid and becomes worthless.

Waaree is India's leading solar panel manufacturing company, offering high-quality products and services through a team of experts. Contact us via call at 1800-2121-321 or mail us at

You can also read: How Many Solar Panels Do You Need?

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