Gross metering and net metering

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What is Net metering and Gross metering?

The electricity bills you receive at the home, office, or other buildings, are tracked by an electricity meter to make the acquaintance of the units of electricity you consumed.
Generally, for our daily usage, we use the electricity from the power grid and from there, we’ll get the power consumed charge. But, if you have the capacity to produce electricity at your premises itself, then the mechanism of the power grid changes.
Solar roof-mounted PVs has become a standard system for generating a secondary source of power for users. As electricity storage is expensive, these systems are often connected to the grid to export surplus electricity to the grid, and deficits can be imported from the grid. With the help of advanced technologies, governments, when designing the regulations for solar rooftop systems, introduced two arrangements –:

  1. Net metering
  2. Gross metering

How does Net Metering work?

The Net Metering policy was introduced in India, around 2015, to make solar energy more accessible and economical. It calculates the difference of energy exported from your solar power system and import from the grid. You either pay for the difference in units or get paid by the utility company (DISCOM) for extra units at the end of the billing cycle (based on the state level policy).


The electricity generated by your solar energy system directly powers your premises during the day. When you don’t have enough electricity coming from solar (during the night time or cloud cover), the balance comes from the grid. A bi-directional meter records this quantity of imported power. The bi-directional meter does not record the total amount of energy generated by your solar panels. It only records the surplus solar electricity exported to and imported from the grid.

How does Gross Metering works?

Unlike net metering, your premises cannot directly use the power generated by your solar panels. It gets exported entirely to the power grid, and the electricity you require comes from the power grid.




Gross Metering requires an extra electricity meter to measure the outflow of electricity from your solar power system to the grid. As a result, the prices for electricity consumption and electricity generation vary. The regular meter records the total amount of electricity consumed by you. You will be paid a pre-determined feed-in tariff (FiT) for the electricity exported to the grid from your solar power system.
For the consumer, a power purchase agreement (PPA) drives the implementation of both net and gross metering. The PPA is a legal agreement made between you and the utility company for multiple years. For instance, the net metering PPA with Discom is valid for 25 years.
Net and gross metering is also equally applicable for rooftop solar systems as well as open access (ground-mounted) solar power systems. However, the difficulty of attaining a PPA differs according to the type of system, policy, political climate, and geographical region.

In gross-metering, consumer needs to purchase total energy for consumption at retail tariff, which is generally higher than the feed-in-tariff (FIT); in net metering, since import of power is adjusted against export, consumer avails equivalent reduction in their electricity bill.

If you are planning for installing a solar plant in a building, Industries, it would be a great time to contact us and get your power purchase agreement (PPA) signed!

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