Net metering is the mechanism that makes rooftop solar financially viable for most Indian consumers — yet it is also the aspect of compliance most likely to surprise installers who assume a single national rule applies. India has net metering everywhere; the details are different everywhere.
This guide explains the CERC framework, how state SERCs implement it, and what installers need to know across the 10 major rooftop solar states.
The CERC Model Net Metering Regulations
The Central Electricity Regulatory Commission issued model net metering regulations in 2013, amended in 2016. These are model regulations — CERC sets the framework, but state SERCs issue their own binding orders.
The CERC model established the key principles:
Net energy accounting: Export offsets import. The consumer pays (or receives credit) only on the net difference over the billing period.
APPC as the export rate: Exported units are credited at the DISCOM’s Average Power Purchase Cost — what the utility pays to buy power from generators. This is lower than the retail tariff consumers pay for imported power.
Bidirectional metering: A two-register meter records import and export separately, allowing the utility to calculate net consumption accurately.
Eligibility link to load: System size is tied to the consumer’s sanctioned load to prevent oversized installations that would create a net generator rather than a net consumer with surplus rooftop generation.
State SERCs adapt these principles into binding state-level orders. The result is significant variation in system size limits, export rates, settlement periods, and banking rules — all within the same CERC-established framework.
How Export Rates Work: APPC Explained
The APPC (Average Power Purchase Cost) is the weighted average rate that a DISCOM pays for power purchased from all sources — thermal, hydro, renewable, and short-term markets. It is set annually by the SERC in the tariff order.
For a solar consumer, the APPC is what they earn per unit of electricity exported to the grid under net metering. Because the APPC reflects the cost of generation rather than the retail price of power, it is always lower than what the consumer pays for imported electricity.
Why APPC rather than retail rate? The retail tariff includes not just the cost of power but also transmission charges, distribution charges, cross-subsidy, and taxes. Under net metering, the exported unit is credited at the generation cost (APPC) because the consumer is effectively acting as a generator, not as a distribution-network user, for those exported units.
APPC ranges nationally:
| State | Approximate APPC Range (Rs./unit) |
|---|---|
| Rajasthan | 3.20 – 3.60 |
| Gujarat | 3.40 – 3.80 |
| Maharashtra (MSEDCL) | 3.60 – 4.10 |
| Karnataka (BESCOM) | 3.80 – 4.40 |
| Tamil Nadu (TANGEDCO) | 4.00 – 4.50 |
| Uttar Pradesh | 3.00 – 3.60 |
| Andhra Pradesh | 3.50 – 4.00 |
| Telangana | 3.40 – 3.80 |
| Madhya Pradesh | 2.80 – 3.40 |
| Punjab (PSPCL) | 3.40 – 3.90 |
These ranges reflect recent tariff orders and may be revised. Always check the current SERC tariff order for the applicable rate before projecting customer savings.
System Size Limits by State
Net metering size limits determine how large a system a consumer can install with full net metering credit. Most states follow the CERC model approach of limiting to the sanctioned load:
| State | Residential Limit | Commercial Limit |
|---|---|---|
| Rajasthan | Up to sanctioned load | Up to 1 MW |
| Gujarat | Up to sanctioned load | Up to 1 MW |
| Maharashtra | Up to sanctioned load | Up to 1 MW |
| Karnataka | Up to sanctioned load | Up to 1 MW |
| Tamil Nadu | Up to sanctioned load | Up to 1 MW |
| Uttar Pradesh | Up to sanctioned load | Up to 1 MW |
| Andhra Pradesh | Up to sanctioned load | Up to 1 MW |
| Telangana | Up to sanctioned load | Up to 1 MW |
| Madhya Pradesh | Up to sanctioned load | Up to 1 MW |
| Punjab | Up to sanctioned load | Up to 1 MW |
Commercial systems above 1 MW typically move to net billing or open access arrangements, governed by separate SERC regulations.
Feeder-Level Caps Can Override Individual Limits
Even if a consumer is individually eligible for 5 kW of net metering, the DISCOM may reduce this if the local feeder or distribution transformer is already at high solar penetration. This is increasingly common in premium residential areas of Bangalore, Pune, and Ahmedabad. Check transformer loading during site assessment, not just after submitting the application.
Net Metering vs Gross Metering vs Net Billing
These three models are often confused. Understanding the difference is important for projecting customer savings accurately.
Net Metering
The standard model in most Indian states for residential rooftop solar:
- Import and export are measured separately by the bidirectional meter
- Net consumption = import − export
- Bill is based on net consumption, credited at APPC for exported units
- Surplus credits carry forward (monthly or annually depending on state)
Example: Consumer imports 400 units, exports 150 units. Net consumption = 250 units. Bill is based on 250 units plus 150 units credited at APPC rate.
Gross Metering
All solar generation is exported to the grid at a fixed feed-in tariff (FiT). All consumption is metered separately and billed at full retail rate. Used in some state commercial solar policies and older scheme structures.
Example: 3 kW system generates 450 units. All 450 units are exported at FiT rate (say Rs. 2.50/unit). Consumer also pays full bill for 400 units imported at retail rate. Net benefit depends entirely on the FiT vs retail tariff spread.
Net Billing
A hybrid: solar generation and grid import are metered separately, but surplus export is compensated at a defined rate (not necessarily APPC) that is different from — usually lower than — the retail import rate. Monthly settlement, no carry-forward banking.
Which model is better? For residential consumers, net metering is almost always superior to gross metering at current rates. Net billing outcomes depend on the specific rates and tariff structures set by the SERC.
Banking of Units: State-by-State Rules
Banking refers to carrying forward surplus net metering credits from month to month. The rules differ significantly:
Annual banking (more favourable): Surplus credits accumulate over the year. At year-end settlement, remaining credits are paid out at APPC or forfeited (varies by state). States with annual banking: Gujarat, Rajasthan (subject to order updates).
Monthly settlement: Credits apply only within the billing month. Surplus not consumed within the month may be paid at APPC or lost. States that have historically used monthly settlement: Tamil Nadu, Maharashtra.
Installers should use solar design software that accurately models monthly generation vs consumption to show customers the real banking impact on their payback period — this varies by location, system size, and consumption profile.
The Bidirectional Meter
Every net-metered installation requires a bidirectional (two-register) energy meter capable of independently recording import and export. The DISCOM procures and installs this meter, but the cost is borne by the consumer.
Typical meter costs: Rs. 2,000 to Rs. 8,000 depending on the state and DISCOM.
Meter installation timeline is one of the most variable elements of the grid connection process. DISCOMs in Karnataka and Gujarat are relatively fast (15–30 days after commissioning). In some UP districts and parts of Maharashtra, meter installation delays of 45–90 days are documented.
Pro Tip: Start Meter Follow-Up Early
Net metering credits only begin once the bidirectional meter is installed and the connection is activated. Customers who have installed the system but are waiting for the meter are effectively exporting for free. Building regular follow-up with the DISCOM meter department into your post-installation workflow protects customer experience and your business reputation.
State-Wise Net Metering Comparison
| State | SERC | DISCOM(s) | Residential Limit | APPC (approx.) | Settlement |
|---|---|---|---|---|---|
| Rajasthan | RERC | AVVNL, JVVNL, JdVVNL | Sanctioned load | Rs. 3.20–3.60 | Annual |
| Gujarat | GERC | UGVCL, MGVCL, PGVCL, DGVCL | Sanctioned load | Rs. 3.40–3.80 | Annual |
| Maharashtra | MERC | MSEDCL, Tata Power, Adani | Sanctioned load | Rs. 3.60–4.10 | Monthly |
| Karnataka | KERC | BESCOM, GESCOM, HESCOM, CESC, MESCOM | Sanctioned load | Rs. 3.80–4.40 | Annual |
| Tamil Nadu | TNERC | TANGEDCO | Sanctioned load | Rs. 4.00–4.50 | Monthly |
| Uttar Pradesh | UPERC | PVVNL, DVVNL, MVVNL, PuVVNL, KESCo | Sanctioned load | Rs. 3.00–3.60 | Monthly |
| Andhra Pradesh | APERC | APEPDCL, APSPDCL | Sanctioned load | Rs. 3.50–4.00 | Monthly |
| Telangana | TSERC | TSSPDCL, TSNPDCL | Sanctioned load | Rs. 3.40–3.80 | Monthly |
| Madhya Pradesh | MPERC | MPEZ, MPMKVVCL, MPWZ | Sanctioned load | Rs. 2.80–3.40 | Monthly |
| Punjab | PSERC | PSPCL | Sanctioned load | Rs. 3.40–3.90 | Monthly |
APPC rates are indicative based on recent tariff orders. Verify the current rate in the applicable SERC tariff order before project financial modelling.
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Applying for Net Metering: The DISCOM Process
Net metering approval goes through the DISCOM, not the SERC directly. The SERC sets the rules; the DISCOM implements them.
Gather Application Documents
Load sanction letter, electricity bill (showing sanctioned load), site plan, single-line diagram, module and inverter datasheets with BIS certifications, ALMM compliance declaration (for PM Surya Ghar), and proof of ownership.
Submit Application
Submit through the DISCOM’s online portal (most major states) or at the DISCOM sub-division office. Obtain an acknowledgement with application number for tracking.
Await Feasibility Sanction
The DISCOM reviews transformer loading and issues technical sanction (typically 15–45 days). If the transformer is at capacity, the DISCOM may cap the approved system size or defer the application.
Install and Commission
Install the system using approved components. Prepare commissioning documentation. Notify the DISCOM upon completion for inspection scheduling.
Common Rejection and Delay Causes
Transformer at capacity: The single most common cause of net metering rejection or size reduction. Affects dense residential areas in major cities.
Incorrect SLD format: Each DISCOM may have specific requirements for the single-line diagram. Using solar proposals software that generates DISCOM-compatible documentation reduces this risk.
Missing load sanction letter: Old connections may not have a load sanction letter. Customers need to request this from the DISCOM before starting the application.
ALMM non-compliance: For PM Surya Ghar projects, any component not on the current ALMM list stops the commissioning report from being accepted on the portal.
Ownership documentation: DISCOMs require proof that the applicant owns the premises. Tenants, joint property owners, or apartment associations face additional documentation requirements.
Frequently Asked Questions
What is the CERC net metering regulation?
CERC issued model net metering regulations in 2013 (amended 2016) establishing the framework for crediting solar exports. State SERCs implement their own binding orders within this framework. Net exports are credited at the APPC rate.
What is the system size limit?
Most states allow residential systems up to the consumer’s sanctioned load. Commercial systems face limits typically around 1 MW under standard net metering, with larger systems going to net billing or open access.
How is the export rate set?
The export rate is the APPC of the DISCOM, set annually by the SERC. It ranges from approximately Rs. 2.80 to Rs. 5.50 per unit nationally depending on the state.
What is the difference between net metering and gross metering?
Net metering credits only the surplus export against consumption at the APPC rate. Gross metering exports all generation at a FiT and bills all consumption at the full retail rate. Net metering is almost always better for residential consumers at current rates.
Can surplus credits be banked?
Banking rules vary. Annual settlement (carry-forward of credits across months, settled once a year) is more favourable and is offered by some states including Gujarat and Karnataka. Most states settle monthly.
