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Solar Net Metering: How the Savings Actually Work

6 min read · Updated 21 July 2026

Net metering lets your rooftop solar system run your meter both ways: units you export offset units you import, and you pay (roughly) for the net. But "roughly" is where the money hides — the same 3 kW system can pay back in 4 years in one state and 8 in another, because the value of an offset unit depends on your tariff.

How the billing works

With net metering, a bidirectional meter records import and export separately. At billing, export units are netted against import units; you pay the tariff on the net import, and surplus export typically carries forward as credit (settled at a lower rate at year-end). Two consequences people miss:

  • Fixed charges, duty and surcharges don't disappear — they apply on your sanctioned load and net consumption as usual.
  • Offset units are worth your top slab rate. Netting reduces the most expensive units first — so households deep into high slabs save the most per unit generated.

Why savings differ by state

Three levers move the economics:

  1. Your slab ladder. Steep ladders (see Maharashtra) make each offset unit worth more; flat or subsidised ladders (free-unit schemes in Karnataka or Tamil Nadu) can make small systems pointless — you can't save on units that were already free.
  2. The state's net-metering rules. States differ on eligible system sizes, net metering vs net billing (exports credited at a lower feed-in rate), and settlement periods — check your DISCOM's current regulations before sizing.
  3. Subsidy. The central rooftop scheme (PM Surya Ghar) subsidises residential systems up to a capped amount; state top-ups vary.

Sizing: match your daytime + top-slab usage

A practical rule: size the system to wipe out your top-slab consumption, not your entire bill. Each kW of rooftop solar generates roughly 4 units/day (110–130 units/month) in most of India. Our solar savings estimator does this against your actual DISCOM tariff — enter your monthly units and it computes system size, bill-after-solar and payback from the same engine as the bill calculator.

What drives payback

  • Shorter payback: high top-slab rates, high daytime self-consumption, subsidy captured, net (not gross) metering.
  • Longer payback: heavily subsidised consumption (free-unit schemes), low sanctioned load limits on system size, feed-in-rate settlement of exports.

Before signing with a vendor, run the numbers yourself on the estimator and against your DISCOM's tariff page — the vendor's "70% saving" pitch assumes the steepest tariff, which may not be yours.

Frequently asked questions

How does net metering reduce my electricity bill?
Exported solar units are netted against imported units, so you pay the tariff only on net consumption — and because netting removes your most expensive (top-slab) units first, each solar unit is worth your highest applicable rate, not the average.
How many units does 1 kW of rooftop solar generate?
Roughly 4 units per day — about 110–130 units a month across most of India, varying with location, orientation and season. A 3 kW system therefore offsets around 330–390 units a month.
Is net metering worth it if I get free electricity units?
Often not for small systems. If a state scheme (like Karnataka’s Gruha Jyoti or Tamil Nadu’s free-unit block) already zeroes your bill, solar can only save on consumption beyond the free entitlement — size for that excess, or skip until your usage grows.
What is the difference between net metering and net billing?
Under net metering, exported units offset imported units one-for-one at your retail tariff. Under net billing (gross settlement), exports are paid at a lower feed-in rate while imports cost the full tariff — same hardware, materially worse economics. Which applies depends on your state’s current regulations.

Now check your own bill

Reading is half the job — run your own units through your DISCOM's real slab rates, fixed charges and FPPA and get an itemised bill in seconds. Free, no sign-up.

Open the electricity bill calculator →

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Rooftop solar savings calculatorSize a system and see the payback on your own bill

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General guidance based on publicly available tariff orders and regulations; specifics vary by state, DISCOM and consumer category. Verify against your DISCOM's official schedule or your printed bill.