Net metering rules in India 2026: state-wise limits and changes

In 50 words: Net metering lets Indian rooftop solar owners export surplus power and offset future bills. The Electricity (Rights of Consumers) Rules allow net metering up to 500 kW or sanctioned load, whichever is lower; bigger systems use net billing or gross metering. State commissions set the local rules, so limits and credits vary.

Net metering is the single policy that decides whether a rooftop solar system pays back in five years or ten. It governs how the surplus units your panels push to the grid during the day are valued against the units you draw at night. India has a national framework, but electricity is a concurrent subject, so the rules that actually apply to your connection are written by your State Electricity Regulatory Commission (SERC) and implemented by your distribution company (discom). The result is a patchwork: the same 8 kW rooftop system can be on net metering in one state, net billing in another, and capped out in a third. This guide explains the metering models, the national 500 kW rule, the 2025-26 policy changes, how the major states differ, and how PM Surya Ghar has changed the experience for small homes.

Table of contents

1. What net metering is and why it matters
2. Net metering vs gross metering vs net billing vs net feed-in
3. The national framework: the 500 kW rule
4. The 2025-26 policy changes
5. How net metering varies by state
6. Net metering under PM Surya Ghar
7. How to apply for net metering
8. What to watch next in 2026
9. Frequently asked questions

1. What net metering is and why it matters

A grid-connected rooftop solar system generates the most power in the middle of the day, often more than the building consumes at that moment. Net metering is the arrangement that lets the surplus flow back into the grid through a bi-directional meter, which runs forward when you import and backward when you export. At the end of the billing cycle the discom bills you only for the net energy consumed: units imported minus units exported. If you exported more than you imported, the surplus is carried forward as a credit to the next month, and any leftover at the end of the settlement year is usually paid out at a low rate set by the regulator.

The reason it matters so much is economics. Under true net metering, every exported unit is effectively worth the retail tariff you would otherwise pay — typically ₹7 to ₹9 per unit for residential and commercial consumers in most states. That is far more than the wholesale value of solar power. Replace net metering with a model that pays a lower export price, and the payback period of the same system can stretch by years. This is why the metering model, not the panel brand, is the most important number in a rooftop solar quote.

2. Net metering vs gross metering vs net billing vs net feed-in

These four terms are used loosely in the market, but they mean very different things for your bill.

| Model | How export is valued | Who it suits | |---|---|---| | Net metering | Exports offset imports unit-for-unit at retail tariff; net units billed | Homes and small businesses that consume much of their own generation | | Gross metering | All generation is sold to the discom at a fixed feed-in tariff; all consumption is bought separately at retail | Owners who export most output and want a guaranteed sale price | | Net billing | Exports paid at a predetermined rate, usually below retail, with no unit-for-unit rollover; imports billed at retail | Larger systems where regulators want to limit the subsidy in retail tariff | | Net feed-in | A variant of net billing where surplus is settled at an avoided-cost or APPC rate | Utility-scale-adjacent prosumers above the net metering cap | | Virtual / group net metering | Credits from one solar system are shared across multiple connections or meters | Housing societies, government buildings, consumers without suitable roofs |

The trend across India over the past few years has been a quiet shift from net metering toward net billing for larger systems, because discoms argue that crediting exports at full retail tariff lets prosumers escape the fixed and cross-subsidy components built into that tariff. The fight over where to draw the line is the central tension in Indian rooftop policy.

3. The national framework: the 500 kW rule

The anchor at the national level is the Electricity (Rights of Consumers) Rules, 2020, issued by the Ministry of Power. After amendment, the rules provide that net metering is allowed for rooftop solar systems of capacity up to 500 kW or up to the consumer's sanctioned load, whichever is lower. For systems above 500 kW, the rules point to net billing or gross metering / net feed-in instead. The 500 kW threshold was a significant liberalisation: an earlier draft had proposed capping net metering at just 10 kW, which the industry warned would have killed the commercial and industrial rooftop segment. After pushback, the Ministry settled on 500 kW.

It is important to understand the limit of this national rule. The Rights of Consumers Rules set a floor and a default, but the detailed tariff design — the export rate, banking rules, settlement period, and any capacity cap as a percentage of the distribution transformer — is set by each SERC. So the 500 kW figure is the national ceiling for net metering eligibility, but your state can be more or less generous within that envelope, and historically several states applied their own lower caps or transformer-capacity restrictions.

4. The 2025-26 policy changes

Two developments are reshaping the rules in 2026.

Procedural simplification under PM Surya Ghar (October 2025). The Ministry of Power directed all states and union territories to waive the requirement for a separate net metering agreement, folding a digital agreement into the PM Surya Ghar online portal instead, and to waive a range of fees — application and registration charges, net-meter testing fees, and commissioning fees. As reported, six states (Gujarat, Rajasthan, Karnataka, Jharkhand, Haryana and Puducherry) had moved to digital agreements and seventeen states and union territories had waived the associated charges. For a homeowner, this removes weeks of paperwork and several thousand rupees of friction.

The draft Electricity (Rights of Consumers) Amendment Rules, 2026. A draft dated 12 March 2026 proposes a more consequential change: prosumers with renewable capacity exceeding 500 kW may be required to install mandatory energy storage, and the draft contemplates a net-metering charge for systems above a small-residential threshold while keeping the smallest homes exempt. Net metering would remain available up to 500 kW (or sanctioned load, whichever is lower) where no other arrangement exists, with the changes phased in from later in 2026. Because this is a draft out for consultation, the final shape — including the exact storage sizing and any charge — is not yet settled, and the specific charge thresholds reported in trade coverage should be treated as proposed, not law.

5. How net metering varies by state

State commissions, not Delhi, write the rules that bind your meter. The picture in 2026:

• Maharashtra has been among the more generous, with net metering availability extended toward the higher end of the national envelope and active group and virtual net metering provisions.
• Karnataka has introduced virtual net metering, letting credits from a single solar installation be allocated across multiple consumer accounts — useful for consumers without a suitable roof.
• Gujarat, a rooftop leader, runs a well-developed surya-gujarat framework with streamlined approvals and was among the first to adopt digital agreements.
• Tamil Nadu, Rajasthan, Uttar Pradesh, Kerala and others each set their own export rates, banking and settlement periods, and transformer-capacity caps.

The practical takeaways for a buyer are consistent across states: confirm whether your system size keeps you in net metering or pushes you into net billing; check the percentage-of-distribution-transformer cap, because a popular feeder can be "full"; and read the banking and year-end settlement rules, because a low buy-back rate on unused credits quietly erodes returns. Always verify the current order on your SERC's website rather than relying on a vendor's summary, as state rules are revised frequently. Where figures differ between sources, the SERC order prevails.

6. Net metering under PM Surya Ghar

For residential consumers, the PM Surya Ghar: Muft Bijli Yojana has folded metering into a much smoother national process. Systems up to 10 kW are treated as deemed feasible, meaning the discom's technical feasibility approval is automatic rather than discretionary. Central financial assistance covers 60% of system cost for the first 2 kW and 40% for the 2-3 kW slab, with the subsidy capped at the 3 kW level for a maximum residential benefit. Combined with the October 2025 waiver of separate agreements and fees, a typical 3 kW home system now faces far less administrative friction than two years ago. For a full walk-through of the subsidy and application steps, see our PM Surya Ghar complete guide.

7. How to apply for net metering

The mechanics are broadly common across states, now largely online:

1. Register on the PM Surya Ghar portal (for residential) or the discom portal, selecting your discom and consumer number.
2. Choose a registered vendor and system size within your sanctioned load and the net metering cap.
3. Apply for feasibility — automatic up to 10 kW under PM Surya Ghar; otherwise the discom checks the distribution transformer headroom.
4. Install and request inspection. The discom inspects the system and installs the bi-directional (net) meter.
5. Commissioning and agreement. Where digital agreements apply, this is now part of the portal flow rather than a separate signed contract.
6. Subsidy disbursement (residential) follows commissioning and bank-account validation.

8. What to watch next in 2026

The decisive question is the final text of the 2026 amendment. If mandatory storage above 500 kW is enacted, large commercial and industrial rooftops will need to budget for batteries, changing the economics of the C&I segment that the 500 kW cap was designed to protect. Watch, too, for whether any net-metering charge survives consultation, and how individual SERCs respond — some may absorb the national change gently, others may use it to push more prosumers toward net billing. For homeowners under 10 kW, the direction of travel remains favourable: less paperwork, fewer fees, deemed feasibility. The policy is converging on a split system — generous and simple for small homes, more conditional and storage-linked for large prosumers.

9. Frequently asked questions

What is the net metering limit in India in 2026?

Under the Electricity (Rights of Consumers) Rules, net metering is allowed for rooftop solar up to 500 kW or your sanctioned load, whichever is lower. Systems above 500 kW fall under net billing or gross metering. State commissions can apply additional conditions within this national envelope.

What is the difference between net metering and gross metering?

Under net metering, your exports offset your imports unit-for-unit at the retail tariff and you pay only for net consumption. Under gross metering, all your generation is sold to the discom at a fixed feed-in rate and all your consumption is bought back at retail — the two are billed separately. Net metering is usually better for homes that consume much of their own solar.

Is net metering being removed in India?

No, but it is being narrowed at the top end. A draft 2026 amendment proposes mandatory storage for prosumers above 500 kW and a possible charge for larger systems, while keeping net metering for small residential systems. The smallest homes remain protected; the changes target large prosumers.

Do I still need a separate net metering agreement?

In many states, no. In October 2025 the Ministry of Power directed states to waive separate net metering agreements under PM Surya Ghar and fold a digital agreement into the application portal, along with waiving application, testing and commissioning fees. Adoption varies by state, so confirm with your discom.

Does net metering vary by state?

Yes, significantly. Electricity is a concurrent subject, so each State Electricity Regulatory Commission sets the export rate, banking rules, settlement period and any transformer-capacity cap. The 500 kW national ceiling applies everywhere, but the detailed tariff and credit treatment differ by state.

What metering applies under PM Surya Ghar?

Residential systems up to 10 kW are treated as deemed feasible and connected under net metering in most states, with central subsidy covering 60% of the first 2 kW and 40% of the 2-3 kW slab, capped at 3 kW. The October 2025 simplifications make the process largely paperless.

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Researched and drafted with AI assistance; reviewed and edited by Meera Iyer. Browse more policy coverage and India coverage. Standards: editorial, AI disclosure.