Net Metering Basics: How Solar Energy Credits Work?

Imagine you’ve decided to explore solar energy, maybe to save on bills, reduce your reliance on the grid, or do your bit for the planet. But here’s something not many talk about: what happens to the extra electricity your system generates when you don’t need it? Can it go somewhere? And do you get anything back for it?

Turns out, yes and this is where solar power net metering enters the picture. It’s a system that tracks how much electricity your solar setup supplies to the grid and how much you take back. Think of it as a balance sheet for energy. Once you start understanding how it works, you’ll realise it’s one of the smartest aspects of going solar.

What is a Net Meter?

A net meter is a two-way meter. Unlike a normal electricity meter that just records how much power you use, this one also tracks how much power your solar panels feed back to the grid.

Imagine it’s a bright sunny afternoon. Your solar system is working well and producing more energy than your fans, fridge and lights can use. That extra power doesn’t just sit idle. It flows out to the grid. Your net meter notices this and logs it.

Then, later that night, your panels aren’t producing much because there’s no sunlight. You switch on the lights, maybe run the TV or AC and draw power from the grid. Again, your meter keeps track.

At the end of the month, the electricity board checks the net total – how much power you sent out minus how much you pulled in. And that’s what you’re billed for. If you gave more than you took, the leftover units are saved as credits.

How Does Solar Power Net Metering Work?

Let’s say your house uses 250 units of electricity in a month. If your solar system sends 100 units to the grid, then you’ll only be charged for 150. If you happen to send more than you use, the extra units will show up as credit on your next bill.

Here’s a plain breakdown of how solar power net metering plays out:

• Your solar panels generate electricity during the day.
• You use what you need immediately at home.
• The rest goes into the main grid.
• You earn credits for those extra units.
• Later, if you need grid power, the credits get adjusted.

This system helps you make the most of what your panels generate, even when you’re not using electricity yourself.

What Does a Solar Net Metering Bill Look Like?

To understand how credits are reflected, take a look at this basic solar net metering bill example:

Section	What It Means
Units Consumed from Grid	Power taken when solar was insufficient
Units Sent to Grid	Extra power your system exported
Net Energy	Grid power used – exported units
Energy Credits (if any)	Surplus units that carry forward
Final Bill Amount	Charges based on net usage

This format helps both you and the discom understand how energy has moved in and out. The goal is to keep the net usage as low as possible; ideally, zero or even negative.

How to Apply for a Solar Net Meter Connection?

If you’re planning to get a solar net meter connection, the process usually follows a few steps:

Step 1: Complete Your Installation

Before anything else, your solar setup must be installed fully. This includes panels, inverter, and safety equipment. Make sure it complies with your discom’s technical standards.

Step 2: Submit the Solar Net Meter Application

You’ll need to fill out the solar net meter application, either online or at the local discom office. Documents may include:

• Identity proof
• Latest electricity bill
• System layout and capacity details
• Ownership proof or No Objection Certificate (NOC) if rented

Step 3: Site Visit and Inspection

After submission, an inspection is scheduled. Officers verify installation safety, panel orientation, and inverter specs.

Step 4: Meter Installation

Once approved, your old meter is replaced with a bi-directional net meter. This is what logs the inflow and outflow of electricity.

Step 5: Activation and Billing

After final testing, your connection goes live. From this point, your energy usage and contributions are monitored under net metering.

Why Should You Use Net Metering?

You might ask  – if I’m generating my own power, why bother with grid exchange?

Well, solar panels don’t store power unless you have expensive batteries. During the day, when your system produces the most, you may not be using much. Instead of letting it go to waste, net metering lets you send that surplus back and earn credit.

Here’s why solar power net metering makes sense:

• No wastage: Extra electricity is returned to the grid and credited.
• Monthly savings: Credits lower your final bill amount.
• Energy balance: You have grid access when solar isn’t enough.
• Smoother returns: Helps recover your solar investment over time.
• No batteries needed: You use the grid as a virtual storage system.

Conclusion

There’s no doubt that solar power net metering helps households and businesses get better value out of their systems. But the initial cost of setting everything up (panels, installation, wiring) can still feel like a hurdle. That’s where smart financing steps in. If you’re planning to go solar but need support with the cost, consider Solar Panel Financing with Fibe. Fibe offers flexible and affordable loans that cover up to 90% of your setup cost. The application process is fully digital with 0 foreclosure charges. Visit the website or download the app today!

FAQs

What is net metering in a solar energy system?

Net metering is a system that records how much electricity your solar setup supplies to the grid and how much it takes back. You are billed only for the net usage, and if you send more than you consume, those units are carried as credit.

Is net metering allowed in India?

Yes, most Indian states allow net metering. However, policies may vary by state or even by discom. Some may set limits on system size, while others may offer credits at different rates. Always check with your local authority before applying.