Net metering is a mechanism which allows domestic or commercial users
who generate their own electricity using solar panels or photovoltaic
systems to export their surplus energy back to the grid.
An off-grid system is generally a stand-alone system, while an on-grid system
is connected to the main utility grid and incorporates the policy of net metering. The process of net metering provides system owners with the opportunity to gain extra revenue by selling their excess power to the grid while also making up for shortfalls via the grid. If the amount of energy generated is more than the amount of energy consumed, then the owner gets compensated for the excess amount. However, if the amount of energy consumed is more than the amount of energy generated, then it is imported from the utility grid and the owner pays only the net amount.
In India, net metering was introduced as an initiative to make renewable energy more economical and accessible with the regulations differing on a state to state basis.
In net metering, the owner is billed for the “net” energy that is used, which is
the difference between total energy produced by the system and total energy
Net metering accounts the difference of excess power exported back to the
grid and total power consumed by the owner. Hence, surplus energy earns
revenue while the shortage of energy is covered by the grid.
Each state can have different regulations for the type of net meter used to
record the power. Some states require only one meter to measure the net
amount of power consumed by the owner. Whereas, other states require two
meters to record the total amount of units consumed by the owner from the
grid along with the total amount of power generated by the owner’s system.
What are the advantages of net metering?
Extra financial credit
If the amount of energy generated by the owner’s system is more than the
amount of energy consumed, then the owner will receive extra credits and
Eliminates the need for battery storage and backup generator
Unlike off-grid PV systems, owners don’t require battery storage systems while
using net metering since the extra power is stored by the utility grid itself. It
also eliminates the need for exorbitant generators since the electricity grid also
acts as a backup generator.
Inexpensive and low maintenance
Since solar panels themselves are low maintenance, the main parts of a PV
system that require maintenance would be the battery and generator. However,
through net metering, you can eliminate these components and further
decrease the maintenance requirements.