Quick Facts
What is gross metering
Gross metering is a billing model for grid-connected solar plants in which every kilowatt-hour produced is exported to the DISCOM grid. The plant owner does not consume any solar power directly. The DISCOM pays for the exported energy at a Feed-in Tariff (FiT) notified by the State Electricity Regulatory Commission, and the same consumer continues to draw all of their electricity from the grid at the normal retail tariff.
In regulatory text, gross metering is defined as a connection arrangement where the consumer’s renewable generator is connected through a separate meter that measures the total energy injected into the distribution network, paid for at a tariff determined by the appropriate Commission.
In the Indian solar industry, gross metering is the secondary metering option after net metering. It is used most often for plants above the state’s net-metering capacity ceiling, for third-party RESCO and OPEX projects, and for installations where the consumer has very little daytime electricity demand.
How gross metering works
Solar electricity from the panels passes through a grid-tied inverter. The AC output is fed into a unidirectional export meter installed at the system boundary. From the export meter, the power flows into the DISCOM network through the consumer’s service line. There is no electrical mechanism that allows the building to use its own solar power first. All generated units leave the premises.
The DISCOM records the export meter reading each month and credits the plant owner at the contracted FiT. Separately, the consumer pays a normal electricity bill based on the import meter reading at the retail tariff. The two transactions are independent, and neither offsets the other.
A simple example helps. Take a commercial building in Pune with a 100 kW gross-metered rooftop solar plant.
- Annual solar generation: 1,50,000 kWh, exported in full.
- FiT contracted with MSEDCL: Rs 3.20 per kWh.
- Annual solar revenue: Rs 4,80,000.
The same building consumes 2,40,000 kWh a year at an average retail tariff of Rs 9.20 per kWh.
- Annual electricity bill: Rs 22,08,000.
The two cash flows are settled separately. The building pays its full electricity bill and receives a solar revenue cheque from the DISCOM. The net benefit is the solar revenue, not a tariff offset.
Gross metering in the Indian context
Each state’s gross-metering rules sit inside the broader net-metering regulation issued by its SERC. The MNRE Rooftop Solar Programme Phase-II permits both arrangements, leaving the choice of FiT and eligibility to the states.
Indicative gross-metering positions in major states as of 2026:
- Maharashtra (MERC): Gross metering allowed above 500 kW, with FiTs set by the latest tariff order.
- Gujarat (GERC): Net metering remains the default up to 1 MW. Gross metering is available for projects under the Solar Power Policy 2021 above the cap.
- Tamil Nadu (TNERC): Allows both, with specific gross-metering FiTs notified for HT consumers.
- Karnataka (KERC): Gross metering is permitted for plants larger than 1 MW or where the consumer cannot meet net-metering eligibility.
- Delhi (DERC): Net metering dominates for residential and small C&I. Gross metering is used for large commercial rooftops above the cap.
Most state policies now move toward net billing as a middle path between net and gross metering, especially for systems above 10 kW.
Comparison: gross metering versus net metering
| Feature | Gross Metering | Net Metering |
|---|---|---|
| Electricity exported | 100% of solar generation | Surplus after self-consumption |
| Tariff for export | Fixed FiT, usually below retail | Same as retail tariff (1:1 credit) |
| Self-consumption allowed | No | Yes |
| Best suited for | Low daytime load, RESCO, above-cap systems | Residential and most C&I consumers |
| Typical FiT or credit (2026) | Rs 2.50 to Rs 4.00 per kWh | Rs 7 to Rs 12 per kWh |
| Common payback in India | 7 to 10 years | 3 to 5 years |
For most residential rooftops and self-consuming businesses, net metering produces a much faster payback. Gross metering becomes attractive only when self-consumption is too small to justify net metering or when capacity exceeds the state ceiling.
Benefits of gross metering
Gross metering offers a predictable, contracted revenue stream that does not depend on the consumer’s own electricity usage. The FiT is locked in the PPA, so the plant owner is insulated from changes in retail tariff structure, billing slabs, or future net-metering reforms.
For investors who do not own the building’s electricity consumption, gross metering provides a clean monetisation model. A RESCO operator can install a system on a third-party roof, sign a separate PPA with the DISCOM, and pay the roof owner a small lease without entangling solar generation with the building’s bill.
Gross metering is also operationally simple. There is one revenue meter, one tariff, and one settlement cycle. There is no need to track self-consumption, no end-of-year banking dispute, and no risk of surplus units being lost to settlement.
Limitations and trade-offs
The FiT under gross metering is almost always lower than the retail tariff the same consumer pays for electricity. Every solar unit is monetised at Rs 3 instead of Rs 9. For a building with daytime load, the opportunity cost of not self-consuming is large.
Many states pay the gross-metering FiT through net energy adjustment in the monthly bill. Direct cash payouts to the consumer are less common, and where they exist, they sometimes run on multi-month delays.
The PPA tariff is fixed for 20 to 25 years, so a future rise in grid tariffs benefits net-metering customers but does nothing for gross-metering customers. The FiT does not escalate with inflation in most states.
Some banks treat gross-metering projects as merchant projects rather than self-consumption assets, which can change loan terms and DSCR expectations.
Common mistakes in gross-metering decisions
- Treating gross metering as the default for any rooftop above 500 kW. Many states now allow net metering up to 1 MW. Check the latest tariff order before assuming.
- Sizing a gross-metered plant against the building’s load. Gross-metered plants should be sized to roof area, generation potential, and FiT economics, not to consumption.
- Skipping the comparison with net billing, which sits between the two and is often more favourable than gross.
- Underestimating the gap between FiT and retail tariff over a 25-year horizon.
- Ignoring the impact of FiT degression. Some states reduce FiTs annually for new projects.
- Forgetting that gross-metering projects often need separate evacuation infrastructure or feeder strengthening.
- Confusing the FiT with the LCOE of the project. They are not the same number.
- Not budgeting for the unidirectional export meter installation, which the DISCOM charges to the developer.
Best practices
Run a side-by-side financial model for the same plant under net metering, net billing, and gross metering before signing any DISCOM application. Use the latest tariff order, not a generic FiT figure.
Insist on a clear PPA with a fixed FiT, a defined payment cycle, and a clause specifying recourse if the DISCOM delays payment by more than 90 days. Larger developers add an LD clause for late payment.
Match the system size to the export feeder capacity. Over-sizing without feeder reinforcement leads to inverter clipping and curtailment, both of which destroy gross-metering returns.
For commercial buildings that have falling daytime consumption (post-pandemic offices, seasonal industries), gross metering may still be a poor fit if there is any plan to add daytime load later. Net or net-billing arrangements preserve future optionality.
Standards and compliance
A gross-metering system in India must follow the same technical standards as any other grid-connected solar plant. The CEA Connectivity Regulations 2019 govern interconnection. The grid-tied inverter must comply with IEC 62109 (safety) and IEC 61727 or IEEE 1547 (grid interface). Anti-islanding protection is mandatory. Modules must be ALMM-listed for projects claiming subsidies or bid against government tenders. The unidirectional export meter follows IS 16444 for smart meters and the state DISCOM’s commercial specifications.
The PPA itself is governed by the relevant SERC tariff order and the Electricity Act 2003 framework. Disputes are resolved at the State Commission or in the appellate process at APTEL.
Related glossary terms
- Net Metering
- Feed-in Tariff (FiT)
- DISCOM
- Power Purchase Agreement (PPA)
- Renewable Energy Certificate (REC)
- Open Access Solar
- Accelerated Depreciation
Key takeaways
Gross metering pays a fixed Feed-in Tariff for 100% of solar generation, with the consumer continuing to buy retail electricity separately. It is rarely the best option for a building that uses its own electricity during the day. It becomes useful for systems above the state net-metering cap, for third-party investors who do not own the building’s consumption, and for project structures where revenue certainty matters more than tariff offset. Run the numbers against net metering and net billing before committing.