Executive Summary
Solar rooftop systems enable consumers to generate electricity on rooftops, reducing grid dependency and electricity bills. Understanding rooftop solar regulations is critical for residential, commercial, and industrial consumers:
- Net Metering: Bidirectional energy accounting, offset consumption with generation
- Gross Metering: Sell all generation to discom, buy separately
- Subsidies: PM-SURYA GHAR (residential), state-level schemes
- Regulatory Framework: MNRE guidelines, SERC net metering regulations
- Technical Standards: CEA safety norms, grid connectivity
This guide examines net/gross metering frameworks, subsidy schemes, application procedures, and compliance requirements.
1. Statutory Framework
Electricity Act, 2003
| Section |
Provision |
| Section 42(5) |
Net metering framework for renewable energy |
| Section 86(1)(e) |
SERC to promote renewable energy including rooftop solar |
MNRE (Ministry of New & Renewable Energy) Guidelines
| Guideline |
Year |
Scope |
| Net Metering Guidelines |
2019 |
Model regulations for states |
| PM-SURYA GHAR Scheme |
2024 |
Residential rooftop subsidy (1 crore roofs) |
| Grid-Connected Solar Rooftop Programme |
2019 |
Central Financial Assistance |
SERC Net Metering Regulations
| State |
Regulation |
Key Feature |
| Maharashtra |
MERC Net Metering 2019 |
Up to 1 MW, gross metering >1 MW |
| Gujarat |
GERC Net Metering 2016 |
Up to 500 kW |
| Rajasthan |
RERC Net Metering 2021 |
Up to 1 MW, virtual net metering |
| Delhi |
DERC Net Metering 2021 |
Up to 500 kW, group net metering |
| Karnataka |
KERC Net Metering 2020 |
Up to 1 MW, banking facility |
2. Net Metering Framework
Definition
| Aspect |
Specification |
| Concept |
Bidirectional meter, exports netted against imports |
| Billing |
Consumer pays for (consumption - generation) |
| Benefit |
Offset grid consumption with self-generation |
| Typical size |
1 kW - 500 kW (state-dependent cap) |
Net Metering Energy Accounting
Net Energy Consumed = Total Grid Import (kWh) - Total Solar Export (kWh)
If Net > 0: Consumer pays for net energy at retail tariff
If Net < 0: Surplus carried forward or compensated (state-specific)
Example:
- Monthly grid import: 1,000 kWh
- Monthly solar export: 400 kWh
- Net consumption: 600 kWh
- Bill: 600 kWh × Retail tariff
Net Metering Limits
| State |
Max Capacity (kW) |
Basis |
| Most states |
Sanctioned load or 1 MW (whichever lower) |
Consumer load limit |
| Some states |
500 kW |
Grid stability |
| Progressive states |
1 MW |
Promote solar |
3. Gross Metering Framework
Definition
| Aspect |
Specification |
| Concept |
Sell 100% generation to discom, buy 100% consumption separately |
| Metering |
Two meters (import, export) or single bidirectional |
| Tariff |
Solar sold at feed-in tariff, consumption at retail tariff |
| Typical size |
>1 MW or where net metering not allowed |
Gross Metering Tariff Structure
| Component |
Rate |
Remarks |
| Solar generation sale (feed-in tariff) |
Rs 2.50-4.00/kWh |
SERC-determined, lower than retail |
| Grid consumption purchase |
Rs 6.00-8.00/kWh |
Retail tariff |
| Net impact |
Consumer pays (consumption tariff - generation tariff) |
Less beneficial than net metering |
Example:
- Monthly solar generation: 500 kWh @ Rs 3.00/kWh = Rs 1,500 revenue
- Monthly grid consumption: 1,000 kWh @ Rs 7.00/kWh = Rs 7,000 cost
- Net cost: Rs 5,500 (vs. Rs 3,500 in net metering scenario)
4. Net Metering vs. Gross Metering Comparison
| Aspect |
Net Metering |
Gross Metering |
| Metering |
Bidirectional, net accounting |
Separate export/import meters |
| Billing |
Pay for net consumption |
Revenue from generation, pay for consumption |
| Economics |
More beneficial (retail tariff offset) |
Less beneficial (feed-in < retail tariff) |
| Size limit |
Up to 1 MW (typical) |
>1 MW or no net metering option |
| Banking |
Allowed (carry forward surplus) |
Not applicable |
| Suitable for |
Residential, commercial, small industrial |
Large industrial, third-party developers |
5. PM-SURYA GHAR Scheme (Residential Rooftop Subsidy)
Scheme Overview
| Parameter |
Details |
| Launch year |
2024 |
| Target |
1 crore residential rooftop installations |
| Total capacity |
30 GW |
| Budget allocation |
Rs 75,000 crore |
Subsidy Structure
| Capacity (kW) |
Subsidy (Rs) |
Effective Consumer Cost (@ Rs 60,000/kW installed) |
| 1-2 kW |
Rs 30,000/kW |
Rs 30,000-60,000 |
| 2-3 kW |
Rs 18,000/kW (additional) |
Rs 90,000-1,20,000 |
| >3 kW |
Nil (only up to 3 kW subsidized) |
Full cost |
Example:
- 3 kW system cost: Rs 1,80,000
- Subsidy: (2 kW × Rs 30,000) + (1 kW × Rs 18,000) = Rs 78,000
- Net cost to consumer: Rs 1,02,000
Eligibility and Application
| Criteria |
Requirement |
| Consumer type |
Residential (individual house owner) |
| Roof ownership |
Consumer must own roof |
| Discom connection |
Existing electricity connection |
| Application portal |
National Portal for Rooftop Solar |
| Installation |
Empaneled vendor only |
6. State-Level Rooftop Solar Subsidies
Major State Schemes
| State |
Scheme |
Subsidy |
Capacity Limit |
| Gujarat |
State subsidy |
Rs 10,000/kW (residential) |
3 kW |
| Madhya Pradesh |
Mukhya Mantri Solar Urja Yojana |
40% of cost |
3 kW |
| Chhattisgarh |
Residential subsidy |
Rs 30,000/kW |
2 kW |
| Uttar Pradesh |
Net metering promotion |
Nil additional (Central only) |
- |
7. Application and Installation Process
Net Metering Application Process (Typical)
| Stage |
Timeline |
Activity |
| 1 |
Day 0 |
Consumer applies to discom with feasibility report |
| 2 |
Day 7 |
Discom issues feasibility approval and technical specs |
| 3 |
Week 2-6 |
Installation of solar system by empaneled vendor |
| 4 |
Week 7 |
Joint inspection by discom |
| 5 |
Week 8 |
Net meter installation, commissioning |
| 6 |
Week 8+ |
Solar generation starts, net metering billing |
Documents Required
| Document |
Purpose |
| Application form |
As per discom format |
| Roof ownership proof |
Property documents |
| Existing electricity connection details |
Consumer number, load |
| System design |
Single line diagram, layout |
| Equipment specifications |
Solar panel, inverter, BOS |
| Empaneled vendor certificate |
Approved installer |
| Safety certificate |
CEA compliance, fire safety |
8. Technical Standards and Safety
CEA (Central Electricity Authority) Rooftop Solar Standards
| Standard |
Requirement |
| Module quality |
MNRE-approved, BIS standards |
| Inverter |
Grid-tied, anti-islanding protection |
| Mounting structure |
Wind load, structural stability |
| Earthing |
As per IS 3043 |
| Lightning protection |
For multi-story buildings |
| Fire safety |
Non-flammable materials, clearances |
Grid Connectivity Requirements
| Aspect |
Specification |
| Voltage level |
LT (230V/400V) for residential/commercial |
| Interconnection |
AC coupling with grid-tied inverter |
| Protection |
Over-voltage, under-voltage, over-frequency, under-frequency |
| Anti-islanding |
Mandatory (disconnect during grid failure) |
| Power quality |
Harmonics, power factor as per grid code |
9. Banking and Settlement Mechanisms
Banking Facility (Surplus Energy Carry Forward)
| State |
Banking Period |
Settlement |
Remarks |
| Maharashtra |
Annual (FY basis) |
Surplus paid @ 75% of weighted average power purchase cost |
|
| Rajasthan |
Quarterly |
Lapsed after quarter |
|
| Karnataka |
Annual |
Paid at pooled cost of power purchase |
|
| Delhi |
Annual |
Adjusted against future bills, lapsed if unused |
|
Example Banking Calculation
Monthly Net Energy (FY 2024-25):
- Apr: -50 kWh (surplus)
- May: +100 kWh (deficit)
- Jun: -30 kWh (surplus)
- Net for quarter: +20 kWh (deficit)
Billing:
- Consumer pays for net 20 kWh at retail tariff
- 50 kWh surplus banked from Apr adjusted against May deficit
- 30 kWh surplus from Jun carried forward to Jul
10. Virtual Net Metering and Group Net Metering
Virtual Net Metering
| Aspect |
Specification |
| Concept |
Single solar system, multiple consumer IDs benefit |
| Use case |
Apartments, housing societies |
| Energy allocation |
As per consumer agreement (share of ownership) |
| Regulatory status |
Allowed in some states (Rajasthan, Delhi) |
Group Net Metering
| Aspect |
Specification |
| Concept |
Multiple consumers collectively own solar system |
| Use case |
Industrial parks, RWAs |
| Energy distribution |
Pro-rata based on ownership/agreement |
| Benefit |
Economies of scale, shared infra |
11. Commercial and Industrial Rooftop Solar
C&I Rooftop Economics
| Consumer Category |
System Size (kW) |
Typical Savings (Annual, %) |
| Commercial (shops, offices) |
10-100 |
20-30% on electricity bill |
| Industrial (factories) |
100-1,000 |
30-40% |
| IT parks, data centers |
500-5,000 |
20-30% |
Financing Models for C&I
| Model |
Structure |
Benefit |
| Capex (self-owned) |
Consumer pays upfront, owns system |
Maximum savings, depreciation benefits |
| RESCO (Renewable Energy Service Company) |
Developer owns, consumer pays per kWh |
No upfront cost, 10-20% discount on tariff |
| Lease |
Consumer leases system, fixed monthly payment |
Predictable cost, no ownership burden |
12. Compliance Checklist for Rooftop Solar
Pre-Installation
Installation
Post-Installation
13. Recent Regulatory Developments
Key Policy Changes
| Development |
Impact |
| PM-SURYA GHAR (2024) |
Rs 30,000-78,000 subsidy for residential rooftop, 1 crore roof target |
| Revised MNRE Guidelines (2019) |
Standardized net metering norms across states |
| Smart metering integration |
Real-time data, automatic billing |
| ALMM (Approved List of Models and Manufacturers) |
Only ALMM-listed modules eligible for subsidy |
14. Key Takeaways for Practitioners
Net Metering is Win-Win: Offset consumption with generation at retail tariff—best economics for consumers.
Subsidy is Substantial: PM-SURYA GHAR offers up to Rs 78,000—reduces payback period to 3-4 years.
Empaneled Vendor Mandatory: Only MNRE-empaneled installers eligible for subsidy—verify credentials.
Banking Provides Flexibility: Surplus energy in summer can offset winter consumption—check state banking rules.
Virtual/Group Net Metering for Apartments: Multiple flats can share one rooftop system—cost-effective for RWAs.
C&I Can Use RESCO: No upfront cost, immediate savings—suitable for corporates averse to capex.
CEA Standards are Mandatory: Grid safety, anti-islanding, quality—non-compliance risks disconnection.
Conclusion
Solar rooftop systems, supported by robust net metering regulations and subsidy schemes, are transforming India's energy landscape. The PM-SURYA GHAR scheme's ambitious target of 1 crore rooftops signals government commitment to decentralized solar. For practitioners, understanding state-specific net metering caps, banking provisions, and subsidy eligibility is critical to maximizing consumer benefits. As rooftop solar becomes mainstream, innovations like virtual net metering, smart metering integration, and RESCO models will further democratize access to clean, affordable electricity.
