How net metering and net billing work

By the SmartSolarSizer team · Published 10 August 2026 · Updated 10 November 2026

Quick answer

Net metering lets your solar panels send spare electricity to the grid and count it against what you buy later, usually unit for unit. Many places are moving to net billing, where exported units earn a lower export rate instead. Pakistan made that switch for new connections in February 2026: exports now earn about Rs 11 a unit, while imports cost Rs 22–42 before taxes. Wherever export pays less than import, the best solar system is the one sized to power your own home during the day.

How net metering works, step by step

Your inverter feeds solar power into your home first. If the panels make more than the house is using at that moment, the extra flows out to the grid through a two-way (bidirectional) meter, which records both directions. At night, or on a cloudy afternoon, you buy power from the grid as usual.

Under true net metering, the utility subtracts what you exported from what you imported. Credits are "usually a one-to-one exchange", so an exported unit is worth the same as a bought one (EnergySage). Spare credits roll forward to the next bill. Some schemes then settle once a year in a "true-up": under California's old rules, any surplus was trued up at the end of a 12-month billing period (CPUC).

Net metering, net billing and gross metering compared

These names get mixed up, and the difference is worth thousands over a system's life. Under net billing, exports are credited at a set rate that is "often equal to the wholesale rate" and less valuable than net metering (EnergySage). Under gross metering you're paid a tariff for everything the panels make and buy everything you use at retail (Australian Senate committee).

Scheme	What you're paid for	What an exported unit is worth	Where you'll find it
Net metering	Exports minus imports over the billing period	Usually the full retail price (one for one)	Existing Pakistani contracts, India, Dubai
Net billing	Each exported unit, at a set export rate	Less than retail, often close to the wholesale price	New Pakistani connections since Feb 2026, California
Gross metering	Everything the panels make, at a tariff	The tariff; you buy all you use at retail	India above 500 kW, some feed-in schemes
Export tariff	Each exported unit, at a rate the supplier sets	Set by the supplier	UK (Smart Export Guarantee), Victoria, Australia

Net metering rules by country in 2026

Market	Current rule	Export value
Pakistan	Net billing for new connections from 9 Feb 2026; existing net-metering agreements run to expiry	About Rs 11 a unit, against up to about Rs 42 base tariff for imports
India	Net metering up to 500 kW or your sanctioned load; gross metering above; states set details	Usually the retail tariff, by state
California, US	Net Billing Tariff for applications since 15 Apr 2023; annual true-up	Avoided-cost values, usually below the import rate
UK	Smart Export Guarantee: suppliers set the rate, which must be above zero	About 1–16p fixed, against a 26.32p import cap
Victoria, Australia	No minimum feed-in tariff since 1 Jul 2025; retailers set rates	Retailer's rate, not below zero
Dubai, UAE	Shams Dubai net metering	Credited against future bills; no cash payment

Sources for each market are in the sections below. Rules change; check with your utility or regulator before you sign.

Pakistan: from net metering to net billing

NEPRA notified new prosumer regulations on 9 February 2026, marking "a transition from the existing net metering mechanism to a net billing framework" and repealing the 2015 net-metering regulations (Business Recorder). Exported units are now bought at the national average energy purchase price, about Rs 11 a unit, where net-metered exports were credited at Rs 22–27 (The News). Bills are settled monthly, with any surplus carried forward or paid every three months (Business Recorder), and new contracts last five years instead of seven (Nukta).

If you already have net metering, your agreement stays valid until it expires and moves to the new rate on renewal (Business Recorder, Nukta). An April 2026 amendment adds a catch: raising the maximum output of the system, for example by adding panels, loses the old terms (Profit). Imports are still expensive: the FY2026 base tariff for non-protected homes runs from Rs 22.44 for the first 100 units to Rs 41.78 for time-of-use homes above 300 units, before taxes and fuel adjustments (Pakistan Observer).

India: net metering up to 500 kW

The Electricity (Rights of Consumers) Rules first allowed net metering up to 10 kW, with gross metering above that (Renewable Watch). A 2021 amendment raised the limit to 500 kW or your sanctioned load, whichever is lower (Renewable Watch). Each state's commission writes its own regulations within that framework, so the details differ: Gujarat, for example, sets its own minimum and maximum sizes (GERC). The PM Surya Ghar subsidy pays Rs 30,000 a kW for the first 2 kW and Rs 18,000 for the third, capped at Rs 78,000 (Delhi government).

United States: state by state

There's no single US rule. California moved new customers to a Net Billing Tariff for applications from 15 April 2023. Exports earn avoided-cost values that are "usually lower than import rates", though they can rise above retail on late-summer evenings, and credits roll over to an annual true-up (CPUC). Industry analysis of the proposal put the average export value falling by about 75% (Solar Builder). Other states keep changing their rules: one tracker logged 47 net-metering actions in a single quarter of 2026 (Solar Power World).

UK: the Smart Export Guarantee

The UK has no net metering. Under the Smart Export Guarantee, suppliers pay for every unit you export, but they choose the rate and terms; the rate must stay above zero (Ofgem, GOV.UK). Fixed rates run from about 1p to 16p a unit, with some time-of-use tariffs paying up to 23p at peak times (Which?). The import price cap for October to December 2026 is 26.32p a unit (Ofgem), so using your own solar is worth far more than exporting it.

Australia and Dubai

Victoria has no minimum feed-in tariff from 1 July 2025; retailers set their own rates, which can't go below zero (Essential Services Commission). The commission notes that the real value of solar is avoiding retail prices by using the power yourself. In Dubai, Shams Dubai offsets exports against imports each billing cycle and credits any surplus to future bills, with no cash paid out (DEWA resolution).

What net billing does to your savings: a Lahore example

Take a 5 kW system in Lahore. It makes about 22.0 kWh on an average day (5 kW × 4.40 kWh from PVGIS). Suppose the house uses 40% of that directly, while the panels are producing, and exports the rest. That share is our assumption; families who are out all day use less.

	Units a day	Worth per unit	Value a day
Used in the home (saves a 201–300 slab unit)	8.8	Rs 33.10	Rs 291
Exported, old net metering (each cancels a bought unit)	13.2	Rs 33.10	Rs 437
Exported, new net billing	13.2	Rs 11	Rs 145

Under net metering, exported units first cancelled bought units; only surplus beyond your imports was bought back, at about Rs 25.9 (Nukta). New rate about Rs 11 (The News); import at the FY2026 base rate before taxes.

For a home that still buys more than it exports, the exported units lose about Rs 8,752 a month of value. The units you use yourself lose nothing. Raise self-use from 40% to 70%, by running the washing machine, water pump, iron and AC during the day, and you win back about Rs 4,376 a month at these rates.

How to size solar when export pays less

Under one-for-one net metering, a bigger system was nearly always better, because every unit was worth the same. Under net billing, the units beyond what your home can use earn much less. So:

Size to your daytime use first. Add up what runs between about 9 am and 4 pm: AC, fridge, fans, pump, laptops. Our calculator does this from your appliances.
Move flexible loads to midday. Laundry, water pumping, ironing and pre-cooling the house all turn cheap exports into expensive imports avoided.
Price a battery against the gap. When export pays Rs 11 and import costs Rs 33 or more, storing a unit for the evening is worth the difference. Check the size with the battery calculator.
Choose the right inverter. A hybrid inverter makes self-use and backup possible; see our inverter types guide.

All of this feeds straight into payback: the payback guide shows how to put the export rate into the sum.

Common questions

Do existing net-metering users in Pakistan move to net billing?

Not straight away. Agreements signed under the old regulations stay valid until they expire. When they come up for renewal, they move to the new net-billing terms and the lower export rate.

Has net metering ended in Pakistan?

For new connections, yes. NEPRA's February 2026 regulations replaced it with net billing at about Rs 11 a unit. Existing net-metering agreements stay valid until they expire, then renew on the new terms.

Do I get paid in cash for exported electricity?

It depends where you live. In Pakistan surplus credit can be paid every three months. Dubai's Shams Dubai credits surplus to future bills with no cash payment. UK suppliers pay for every unit under the Smart Export Guarantee.

Does net metering work during a power cut?

No. Net metering is a billing arrangement, and an on-grid inverter switches off when the grid fails, for line workers' safety. To keep power during outages you need a hybrid inverter with a battery.

Is a bigger solar system still worth it under net billing?

Only up to a point. Extra panels that mostly export earn the low export rate. Size to your daytime use first, then add panels only if the export income or a battery makes them pay.

What is a net meter?

A net meter is a two-way (bidirectional) meter that records the electricity you import from the grid and the electricity your solar system exports. Your utility usually installs or approves it when you apply for net metering or net billing.

What is a true-up in net metering?

A true-up is the annual settlement. Credits roll forward month to month, then at the end of the 12-month period any remaining balance is settled under the utility's rules.

Size your system for self-use

Add the appliances you run in the daytime and the calculator sizes panels, inverter and battery, with payback at your own tariff.

Open the full calculator →

Sources

Every figure on this page comes from these sources, checked on 30 October 2026.