Government Approves Net Metering for Rooftop Solar Systems Up to 500 kW Capacity

The order suggests introducing time-of-the-day tariffs and installing energy storage to feeding energy to the grid during peak hours


The Ministry of Power (MoP) has finally issued the much-awaited amendment to the Electricity (Rights of Consumers) 2020 Rules concerning net metering for rooftop solar installations. The amendment permits net metering to the prosumer for loads up to 500 kW or up to the sanctioned load, whichever is lower.

Under the latest Electricity (Rights of Consumers) Amendment Rules, 2021, the arrangements for net-metering, gross-metering, net-billing, or net feed-in would follow the regulations made by the State Commission from time to time.

The Amendment

The latest amendment considers net billing or gross metering for rooftop solar systems over 500 kW capacity. For the net metering facility, a single bidirectional energy meter is used at the point of supply where the energy imported from the grid and the energy exported from the grid-interactive rooftop solar system of a prosumer is computed at two different tariffs.

As per the new amendments, net metering will be allowed to the prosumer for loads up to 500 kW or up to the sanctioned load, whichever is lower, and gross metering for loads over 500 kW.

The amendment further adds that in either case of net-metering or gross metering, DISCOM may install a solar energy meter to measure the gross solar energy generated from the grid-interactive rooftop solar system for renewable energy purchase obligation (RPO) credit, if any.

The amendment has also permitted gross metering for prosumers who would like to sell all the solar energy generated to DISCOM instead of using net metering. The Commission would decide the generic tariff for gross-metering as per tariff regulation.

Another important point added in the order is that the state regulatory commissions may choose to introduce time-of-the-day tariffs where prosumers are incentivized to install energy storage for storing the solar energy or feeding it to the grid during peak hours. This could help the grid to manage the demand response.

“This order approving net metering for solar systems up to 500 kW removes the uncertainty that was hanging over the market and allows the rooftop market to get moving again,” said Raj Prabhu, CEO of Mercom Capital Group.


Net metering, one of the vital policy drivers for rooftop solar adoption, has witnessed a series of revisions in India in the past few months.

Net metering for rooftop solar systems was capped at 1 MW until the government proposed to drastically cut it to 10 kW in December 2020. Several stakeholders believed the government’s proposal would destroy the rooftop solar market. After severe opposition and representation by the industry, the government relented, considering net metering for capacity up to 500 kW.


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