What is net-metering?
Net-metering is the billing mechanism that allows you to reduce your electricity consumption by sending back excess energy produced by your solar panels.
Why is net-metering necessary?
When you have a rooftop system installed, you will very frequently produce more energy than you can consume. You are compensated for the excess energy you send back to the grid. In particular solar energy systems typically hit peak electricity production in the afternoon, when many people aren’t home using electricity. By contrast, home electricity use is usually higher in the mornings and evenings. Net metering helps account for these fluctuations in your daily electricity production and usage.
As the homeowner, you would be solely billed for the “net” energy, i.e., the difference between the energy your household consumes and the solar power system set up each month. With net metering, excess electricity is fed into your electric utility’s grid when your system provides more than you need. When this happens, your meter runs in reverse.
What is the limit on the amount of energy that can be generated?
The limit depends on your local Discom regulations. If your Discom allows for 100% of consumption, you will receive only as many credits as you consume, nothing more. If you do happen to be in a surplus, those credits are dealt with differently.
Meter installation and setup
Net meters are approved and installed by your Distribution Company. This is an essential part of an on-grid solar panel setup, without which credits cannot be received. For example, TANGEDCO is responsible for net metering in the state of Tamil Nadu.
The application process for these meters occurs through online portals, which depends on the distribution company in your area. It involves submitting your latest bill, technical details of the PV modules, inverter, other system equipment proposed to be installed, and a few other documents.
There is a small application fee as it requires a JE (Junior Engineer) / AE (Assistant Engineer) to visit your home for an inspection. The wait time for the NOC and inspection varies by state.
The JE / AE would check
- The compatibility with the existing connection at your place – if it has 1 phase or 3 phase supply
- The line voltage and transformer suitability
- Additional technical aspects like earthing
The confirmation would be followed by a commissioning test approving the interconnection with the network.
Net-metering vs. Gross-metering
In gross metering, you would be compensated at a fixed feed-in-tariff for the total number of solar energy units generated and fed into the grid. You would have to pay the Distribution Company at a different retail supply tariff, usually higher, for the total energy you consume.
In the case of net metering, the solar power output is adjusted in the electricity bill against the energy consumed. Here’s where a bidirectional net meter that records both input and output of energy comes into play.
Gross Metering requires an extra electricity meter to measure the electricity’s outflow 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.
Policies regarding net-metering
Some states hesitate to provide a stable rooftop solar environment, as DISCOMs do not want to sacrifice prime customers who pay a high tariff. We see this in the form of regulatory uncertainty, with proposals of gross metering or grid support charges. However, net metering incentives, along with financial subsidies to install solar in your houses, are still available in most regions!
Most states have an upper limit on the size of a rooftop solar system; however, this limit is more than enough to power a residential or small commercial property. One can install enough solar panels to offset most of their electricity consumption.
SunEdison’s agents will help you with the net metering process for your installation.