What is Net Metering? How Does it Work?

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What Is Net Metering?

Net metering is referred to as a service provided by local utility companies that recompense renewable energy customers for sending excess power back to the grid. Residential and commercial solar energy consumers can send the excess energy to the grid in exchange for certain credits that offset their monthly electricity bill. By the end of the month, customers are charged only the ‘net’ difference between the amount of energy they consumed and the power they send back to the grid. In fact, as per the size of a PV system, net metering could likely match the cost of a yearly electricity bill. (That’s thousands of money saved each year!)

How Does Net Metering Work?

How net metering works
Net Metering

In order to use net metering, you first need a great solar design for a solar panel system. If you are interested in getting a great solar design, contact us for a free quote. You will also need a bi-directional meter from your local utility company which completely accounts for the energy coming in and out of your system. This is essentially needed by the utility company to track how much electricity you send back to the grid.

A Net Metering Example:

In the halfway of summer, your solar PV system generates approximately 15 kWh of electricity between the hours of 1 PM & 2 PM. However, your home presently demands 5 kWh of electricity. During this hour, the extra generated 10 kWh of energy is sent via your meter back to the grid. The grid will then efficiently distribute this excess energy to nearby local utility customers. You will then get a credit on your monthly bill for the amount energy you contributed. This 10kWh of electricity will be deducted from your total energy consumed from the grid.

The Benefits of Net Metering

Net metering was originally created to incentivize businesses as well as residential homes to invest in the solar energy. By finding ways to cut costs, people are more likely to switch to solar energy. This has a lot of benefits for users as well as for the society as a whole.

Economic Benefit

Economic benefits of net metering
Net Metering Economic Benefits

Net metering helps in protecting the grid by distributing excess energy locally. This intercepts energy loss in long range power transmissions and reduces overall depreciation on the grid. In addition, the classification and adoption of solar power solutions has created the need for more jobs in the solar industry. This industry has helped the local economies and many solar businesses by bolstering sales. Net metering incentives also motivate individuals to invest in renewable energy sources that have a positive impact on our environment. 

Financial Savings

You can start saving automatically with solar panels as soon as the sun comes out. Solar panel initial deployment costs can be offset by the various financial incentives offered to solar PV system owners. Net metering for solar PV system helps homeowners and businesses in saving money on their electricity with the roll over credits that can be easily used during the low producing months.The consumers of renewable energy can also benefit from federal and other local tax rebates. With these effective financial savings, solar panel systems can be paid off within four to nine years of purchase.


Investing in solar power is a big and first step towards energy self-reliance. A dependable solar PV system can help you produce efficient energy for your home and enough additional energy that can be sent back to the grid.

Difference Between Net Metering and Net Billing

The difference between net billing and net metering is the current retail rate for energy which is sold to the utility company. The energy that is sold back to the grid will be purchased at an under price (based on market value) than the amount energy bought from the utility company.

For example, you might pay INR 582.05/kWh for energy from utility company and get paid INR 218.27/kwh for the excess energy you produced and distributed. It is also referred to as a buy all/sell all energy program. This is because you purchase all the actually required energy from the utility company and sell the entire excess one you generated each month. Net billing does not allow for roll over credits and varies significantly depending on energy usage and time of year. Net billing is mainly used for large solar power systems.


At the last, Heaven Designs can say to spread the goodness of renewable energy with net metering for solar energy. Power your neighbours’ homes and others and receive great energy credits in return. Discover how net metering can save you thousands of rupees a year.

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Follow These Simple Steps-

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-Download complete design in one go- https://app.heavendesigns.in

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