Net metering vs gross metering: how on-site solar is credited

When a factory installs solar, the system's generation interacts with the grid connection. Some solar power is consumed on site; some may be exported to the grid. How these flows are measured and credited — the metering arrangement — strongly affects the value of solar. The main arrangements are net metering, net billing (or net feed-in) and gross metering.

Net metering

Under net metering:

• A bidirectional meter records both imports from the grid and exports to it
• Exported energy is offset against imported energy over a billing period
• The consumer pays for net consumption

In effect, exports are credited at the same value as imports, up to the amount consumed. Rules on carrying forward surplus, and how surplus at the end of a settlement period is treated, vary.

Effect: Simple and generally favourable to the consumer, because exported energy can offset energy that would otherwise be bought at the full tariff.

Net billing / net feed-in

Under net billing:

• Imports and exports are measured separately
• Imports are billed at the consumer's tariff
• Exports are credited at a different, often lower, rate

Effect: Self-consumption is valued at the full tariff, but exports earn less. This rewards sizing systems to consume most generation on site. See matching solar to your load profile.

Gross metering

Under gross metering:

• All solar generation is metered and exported to the grid, typically sold at a fixed feed-in tariff
• The consumer's own consumption is billed separately at its normal tariff

Effect: The consumer receives a fixed price for generation regardless of its own consumption. Value depends on the feed-in tariff relative to the consumer's tariff.

Comparing the three

What applies in Tamil Nadu

The Tamil Nadu Electricity Regulatory Commission sets the metering arrangements, eligibility, system size limits and applicable charges for different consumer categories. These have been revised over time and may differ between domestic, commercial and industrial consumers, and by system size and voltage. Check the regulator's current orders and the distribution company's procedures before designing a system.

Other factors

Network charges

Some arrangements involve network or grid support charges on solar generation or exports. Check whether these apply.

Settlement period

Whether surplus is settled monthly, annually or otherwise affects value, especially with seasonal generation.

System size limits

Limits linked to sanctioned load, contracted demand or transformer capacity.

Time-of-day

If ToD tariffs apply, how exports in different periods are treated matters. See reading your industrial electricity bill.

Why it matters for design

The metering arrangement should shape:

• System size — net billing favours sizing to daytime load
• Orientation — matching generation to load matters more when exports earn less
• Storage — batteries may become more attractive where exports earn little
• Model choice — CAPEX vs OPEX economics. See CAPEX vs OPEX solar.

Regulatory risk

Metering rules can change. A system designed around generous net metering may earn less if rules change to net billing. When planning:

• Understand which rules apply to your system now
• Check whether existing systems are protected from future changes
• Test your financial case under less favourable arrangements

The connection process

Installing a grid-connected rooftop system typically involves:

1. Application to the distribution company
2. Technical feasibility check
3. Installation by a qualified installer
4. Inspection and testing
5. Meter installation or replacement
6. Agreement and commissioning

Check current procedures and timelines with the distribution company.

Common mistakes

• Assuming net metering applies without checking eligibility
• Sizing for net metering where net billing applies
• Ignoring network charges on solar
• Not testing the case against rule changes
• Forgetting settlement period effects

Questions to ask before you install

• Which metering arrangement applies to our category and system size today?
• How are exports valued, and how often is surplus settled?
• Are any network or grid support charges payable on solar?
• Would a future rule change apply to our system, or only to new ones?
• What meter will be installed, and who pays for it?

How we help

Through our C&I solar work with industrial consumers, we help understand how current metering arrangements affect system design and value, and coordinate EPC partners through the connection process. Regulatory interpretation should be confirmed with the distribution company and qualified advisers.