Net Billing And Net Metering: How Solar Exports Get Settled On A Factory's Bill
Net billing pays for solar exports at a set rate, while net metering offsets them against imports. Here is how the two differ and what it means for a factory.
A rooftop solar plant does not always consume everything it generates. On Sundays, holidays, and shutdown days, a factory's load can fall below generation, and the surplus flows to the grid.
How that surplus is credited decides how much it is worth. Two mechanisms handle it, net metering and net billing, and they can value the same exported unit very differently.
The Short Answer
Net metering offsets exported units against imported units, so a unit sent to the grid is credited at the retail tariff. Net billing values imports and exports separately, with exports paid at a different rate set by the regulator, which is usually lower than the retail rate.
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How Net Metering Works
A single bidirectional meter records both imports and exports. Exported units are deducted from imported units, and the net figure is billed, credited, or carried forward at the retail tariff.
- Exports and imports are netted in units (kWh)
- Surplus units can carry forward, with banking terms set by each state
- Because credits are in units, one exported unit offsets one imported unit
Bidirectional energy meter at an Indian commercial building with rooftop solar, recording both imports and exports.
How Net Billing Works
Imports and exports are valued at two different tariffs. Imports are charged at the retail tariff, and exports are credited at a feed-in tariff set by the regulator. The export value is then subtracted from the import value, and the difference is billed or credited.
- Exports are valued in rupees, not offset in units
- The export rate is typically lower than the retail rate
- Under the Rules, regulators may introduce time-of-day (ToD) tariffs for net billing prosumers to encourage storage
Net Metering Vs Net Billing Vs Gross Metering
| Feature | Net Metering | Net Billing | Gross Metering |
|---|---|---|---|
| Meter | Single bidirectional meter | Single bidirectional meter | Generation and consumption metered separately |
| Export Valued At | Retail tariff (unit-for-unit offset) | Feed-in tariff set by the regulator | Feed-in tariff, for all generation |
| Imports Billed At | Retail tariff | Retail tariff | Retail tariff, for all consumption |
| Settlement | Net units billed, credited, or carried forward | Net rupee value billed or credited | Generation credit against consumption bill |
| Best Suited For | Systems with modest export | Larger systems with regular surplus | Businesses selling all generation |
An Illustrative Example
Assume a factory exports 2,000 units over a weekend shutdown. The retail energy rate is ₹8 per unit and the export tariff is ₹3.50 per unit. Both figures are illustrative.
| Mechanism | Value Of 2,000 Exported Units |
|---|---|
| Net metering | ₹16,000 (offsets 2,000 imported units at ₹8) |
| Net billing | ₹7,000 (2,000 units at ₹3.50) |
The ₹9,000 gap on a single weekend scales with how often the plant exports. A factory with 50 such weekends a year would see roughly ₹4.5 lakh of difference. A factory running seven days a week would see close to none.
What The Rules Say
Under the Electricity (Rights of Consumers) Rules, as amended in 2021, net metering, gross metering, and net billing are defined and are operated through regulations issued by each State Electricity Regulatory Commission. If a state's regulations do not provide for these arrangements, the Rules allow the commission to permit net metering for loads up to 500 kW or the sanctioned load, whichever is lower, and net billing or net feed-in for all other loads.
In practice, this means:
- Capacity limits for net metering differ by state
- Export rates and banking terms are set by each State Commission
- A system near the net metering limit may be pushed to net billing
Pole-mounted distribution transformer and LT lines beside Indian industrial sheds with rooftop solar, where surplus units flow back to the grid.
What Is Changing In 2026
The Ministry of Power released draft amendments to these Rules in March 2026, with comments closed in April and a proposed effective date of 1 October 2026. The proposals include:
- A charge that states may levy on net metering for systems above 5 kW, linked to the cost of storage that would provide the same balancing service
- Authority for states to require storage on renewable installations above 500 kW
- Revised timelines for ToD tariffs for commercial and industrial consumers
These remain proposals until notified, and states decide how to apply them. The final position should be confirmed before any project economics rely on them.
What This Means For A Factory
| Factory Profile | Why It Matters |
|---|---|
| Runs seven days a week, load above generation | Little export, so the difference is small |
| Weekly offs, holidays, or seasonal shutdowns | Regular export, so the settlement method changes savings |
| Plant sized close to or above the net metering limit | May fall under net billing |
| Solar paired with storage | Stored surplus avoids low-value export |
What To Check Before Sizing A System
- State Regulations: Capacity limit for net metering, export rate, and banking terms in the state.
- Load Profile: How much generation exceeds load on non-working days.
- System Size: Whether the capacity stays within the net metering limit.
- Export Economics: Savings modelled at both the retail rate and the export rate.
- Storage Option: Whether storing surplus beats exporting it.
Sizing the plant mainly for self-consumption reduces dependence on how exports are settled.
Questions buyers ask us.
Net billing values electricity imported from the grid and electricity exported by the solar plant separately. Imports are charged at the retail tariff, exports are credited at a feed-in tariff set by the regulator, and the difference is billed or credited.
Net metering offsets exported units against imported units, so each exported unit is credited at the retail tariff. Net billing converts exports to a rupee value at a separate, usually lower, rate. The difference matters most for plants that export regularly.
For a plant that exports often, net metering usually returns more per exported unit. Net billing can suit larger systems that net metering limits do not cover. Which is available depends on the state regulations and system size.
It varies by state. Where state regulations are silent, the Rules allow net metering up to 500 kW or the sanctioned load, whichever is lower. Larger systems may fall under net billing or other arrangements.
It can, especially where plant capacity exceeds a state's net metering limit or the state applies net billing to commercial and industrial consumers. The applicable mechanism comes from the State Commission's regulations.
Under gross metering, all generation is credited at the feed-in tariff and all consumption is billed at retail. Under net billing, only the surplus is exported and credited at the feed-in tariff, while generation consumed on site offsets imports directly.
PowerMore models a plant's savings at both the retail and the export rate, using the facility's load profile and the state's current rules, so that system size does not rest on an assumption about how exports will be settled.
Talk to our team to check how net metering or net billing applies to your facility.
