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What is Net Metering & Gross Metering in Solar Industry?

What is Net Metering & Gross Metering in Solar Industry?

When you receive electricity bills at your home, office or anywhere else, an electricity meter keeps track of the units of electricity you used. Conventionally, you only import electricity from the power grid and get charged for the same. However, if you were to install solar panels on your house, your relationship with the utility will change.

If you are planning to be a grid-connected (also known as on-grid) solar consumer, the metering modes available to you are: 

  1. Net metering
  2. Gross metering 

How does Net Metering work?

Net metering is an electricity billing mechanism that allows consumers who generate some or all of their own electricity to use that electricity anytime, instead of when it is generated. It calculates the difference of energy exported from your solar power system and import from the grid. You either pay for the difference in units or get paid by the utility company for extra units at the end of the billing cycle (based on the state level policy). 

The electricity generated by your solar energy system directly powers your premises during the day. When you don’t have enough electricity coming from solar (during the night time or cloud cover), the balance comes from the grid. A bi-directional meter records this quantity of imported power.

The bi-directional meter does not record the total amount of energy generated by your solar panels. It only records the surplus solar electricity exported to and imported from the grid.

How does Gross Metering work?

Unlike net metering, your premises cannot directly use the power generated by your solar panels. It gets exported entirely to the power grid, and the electricity you require comes from the power grid.

Gross Metering requires an extra electricity meter to measure the outflow of electricity 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. You will be paid a pre-determined feed-in tariff (FiT) for the electricity exported to the grid from your solar power system.