Quick answer: Net metering is the billing system KSEB uses for rooftop solar owners. Your bidirectional meter tracks electricity you import from the grid and electricity you export back to it. You’re billed only for the difference. Any extra units you generate are banked as credit for later in the settlement year, and under the KSERC Regulations, 2025, Kerala homes can now use net metering for systems up to 20 kW, not the 3 kW many older articles still mention.
If you’ve installed solar, or are about to, and you’re confused by conflicting claims online about a “3kW net metering cap,” you’re not alone. That number came from an early draft regulation that was dropped before the final rules were notified. Here’s exactly how KSEB net metering works today, in plain terms.
What Is Net Metering, Exactly?
When your solar panels generate more power than your home is using, typically during bright daylight hours, the surplus doesn’t go to waste. It flows out through your meter and into the KSEB grid. Later, when your panels aren’t producing enough (at night, or on a heavily overcast day), you draw power back from the grid as usual.
A bidirectional net meter replaces your regular KSEB meter and tracks both directions separately:
- Import: Units you draw from KSEB
- Export: Units your solar system sends to KSEB
Your bill is calculated on the net of the two. If you exported more than you imported in a billing cycle, you owe nothing for that cycle, and the surplus units are banked forward.
How KSEB Net Metering Works, Step by Step
- Your solar system generates power throughout the day; your home uses what it needs first.
- Any surplus is automatically exported to the KSEB grid through the net meter.
- At night or during low generation, you draw electricity back from the grid as normal.
- At the end of each billing cycle, KSEB compares total import vs. total export.
- If export exceeds import, the surplus is banked as a credit carried into future cycles within the same settlement year.
- At the end of the settlement year, any credit still unused is paid out in cash at a regulated rate, not your retail tariff rate (more on this below).
A Simple Example
| Month | Units Imported | Units Exported | Net Bill |
|---|---|---|---|
| January (dry, strong sun) | 80 | 150 | ₹0 – 70 units banked |
| July (monsoon) | 180 | 60 | Billed for 120 units (minus any banked credit used) |
| October | 90 | 130 | ₹0 – 40 units banked |
This is exactly why Kerala’s annual settlement structure works in your favour: a strong summer generation month offsets a weak monsoon month, so your net position evens out over the full year rather than resetting every 30 days.
KSERC 2025 Regulations: What Actually Changed
This is where a lot of online confusion comes from, so it’s worth clearing up directly.
Myth: “Net metering in Kerala is capped at 3 kW” or “net metering has been banned.”
Fact: That 3 kW figure came from the draft KSERC regulations circulated in mid-2025, which proposed restricting net metering sharply. After strong pushback from prosumers and solar installers, the Commission revised this before finalising the rules.
The final KSERC (Renewable Energy and Related Matters) Regulations, 2025, notified in November 2025 and effective for billing from January 1, 2026, raised the domestic net metering limit considerably.
| Metering Type | Who It’s For | Capacity Limit |
|---|---|---|
| Net Metering | Domestic consumers | 1 kW – 20 kW |
| Net Metering (single-phase inverter) | Domestic consumers | Capped at 3 kW per inverter* |
| Net Metering with battery (10–15kW systems) | Domestic | Requires 10% storage |
| Net Metering with battery (15–20kW systems) | Domestic | Requires 20% storage |
| Net Billing | Any consumer | Up to 500 kW |
| Gross Metering | Any consumer, including off-grid | 1 kW – 3,000 kW |
| Virtual Net Metering | Apartments, RWAs, institutions | Minimum 10 kW |
| Group Net Metering | Multi-site users under one tariff | Varies |
*The 3 kW figure you’ll see repeated everywhere actually refers to the standard single-phase inverter limit, not an overall cap on your solar system size. A 5kW+ system typically just needs a three-phase connection or inverter configuration to qualify.
For a typical 2kW–5kW residential rooftop system, you’re comfortably within net metering eligibility. The 20kW ceiling only becomes relevant for very large homes or small commercial setups.
What Happens to Leftover Banked Credits at Year-End?
Kerala’s settlement year runs annually (for example, 1 April 2026 to 31 March 2027). If you still have unused banked credits when the year closes, KSEB pays them out in cash. But at the Average Pooled Power Cost (APPC), not your retail electricity tariff.
This rate has been a point of contention. KSERC has held it around ₹3.08–₹3.26 per unit, and in mid-2026 rejected a petition from prosumers asking for a higher payout (they had sought ₹4.34/unit), with the Commission noting cost-recovery constraints on the DISCOM side.
What this means practically: the real financial value of net metering comes from offsetting your own consumption at your full retail tariff (which can be ₹6–8/unit in upper domestic slabs), not from exporting surplus and getting paid the APPC rate.
This is why installers consistently advise right-sizing your system to your actual usage rather than oversizing it to “sell power back”. A 1:1 export at APPC is a much worse deal than using that same unit yourself.
Time-of-Day Billing
Under the 2025 regulations, systems above 2 kW are billed using Time-of-Day (ToD) structures, with separate peak, off-peak, solar, and non-solar time bands. This affects exactly how your import and export units are valued depending on when they occur, rather than treating every kWh the same throughout the day.
Net Metering Application Process in Kerala
- Submit your application through the KSEB portal or the PM Surya Ghar national portal, including proposed system size and installer details.
- Technical feasibility review – KSEB must confirm feasibility within 15 days under the current regulations.
- Install your solar system – panels, grid-tied inverter, isolating switches, and KSEB’s mandatory solar priority switch (a changeover switch specific to Kerala’s net metering standard).
- Submit required technical drawings (Single Line Diagram and other Annexure formats) for KSEB’s Assistant Engineer review at the section/sub-division level.
- Net meter installation – KSEB installs the bidirectional meter, typically within 10 days of approval, though 2026 has seen periodic meter stock shortages extending this.
- Inspection & commissioning – KSEB verifies the installation matches approved drawings.
- Commissioning certificate issued – this document is what triggers your PM Surya Ghar subsidy disbursement and serves as your official net metering record.
Total timeline: typically 45–60 days end-to-end if your documentation is complete and there are no meter supply delays. The full regulatory limit for approvals is 135 days.
Documents You’ll Need
- Latest KSEB electricity bill with consumer and meter number
- Proposed solar system size and type (on-grid/hybrid)
- Technical specifications and BIS certificates for panels and inverter
- Single Line Diagram and layout of the proposed system
- Installer certificate confirming CEA and KSEB compliance standards
Fees & Charges
- Registration fee: reduced to ₹300 per kW under the 2025 regulations (down from ₹1,000/kW)
- Grid support charge: systems up to 10 kW are exempt; larger systems may attract charges
- Net meter cost: usually bundled into your installer’s quote, though some homeowners have faced temporary rental arrangements during 2026’s meter supply shortages
Common Misconceptions, Cleared Up
| You may have heard… | What’s actually true |
|---|---|
| Net metering is banned in Kerala | False; it’s active, and the limit was raised to 20kW for domestic use |
| You can only install up to 3kW | That’s the single-phase inverter limit, not the system size cap |
| Exported units are lost if unused | They’re banked for the full settlement year, then cash-settled at APPC |
| You get paid your retail tariff rate for export | No; leftover exports are paid at the lower APPC rate (~₹3.08–3.26/unit) |
| Net metering works the same for apartments | Apartments typically use Virtual or Group Net Metering, a separate framework |
Since your net bill depends entirely on how well your consumption lines up with your generation, a simple home energy monitor or smart plug that tracks real-time import/export can help you shift heavy loads, like laundry or water heating, into daylight hours, reducing how much you rely on banked credit at all.
Conclusion
KSEB net metering can make a rooftop solar system much more useful for a home in Kerala. The basic idea is simple. Use the solar power you generate during the day, send the extra power to the KSEB grid, and use the grid again when your solar generation is low. The bidirectional meter keeps track of both import and export, while surplus units can be used later during the settlement year.
The important point is that net metering is not simply about exporting as much electricity as possible. Your biggest savings come from using more of your solar power yourself. Surplus energy left at the end of the settlement year is paid at the APPC rate, which is lower than the normal electricity tariff. So, choosing the right solar system size based on your actual electricity consumption is important.
For most homeowners, a properly designed solar system can reduce monthly electricity expenses and provide useful protection against rising power costs. However, the rules, charges and technical requirements can change, so it is always better to check the latest KSEB and KSERC requirements before installing a system.
If you are planning solar for your home, don’t look only at the panel capacity or installation price. Consider your daily consumption, roof space, connection type, future electricity needs and expected solar generation. A well-planned system can help you get more value from every unit of electricity your panels produce.
Frequently Asked Questions
What is net metering in simple terms?
It’s a billing system where your bidirectional meter tracks electricity you draw from and send to the KSEB grid, and you’re billed only for the net difference.
Is net metering banned in Kerala?
No. Despite widespread confusion from an earlier draft regulation, net metering is active, and domestic consumers can use it for systems up to 20 kW under the final KSERC 2025 regulations.
What is the maximum solar system size for KSEB net metering?
Up to 20 kW for domestic consumers, subject to connected load, inverter configuration, and (for larger systems) battery storage requirements.
Why do so many articles say the limit is 3kW?
That figure is from the single-phase inverter limit, and also from an early draft of the 2025 regulations that was revised before being finalised.
What happens to my surplus solar units if I don’t use them?
They’re banked as credit and carried forward within the same settlement year (April to March), then any remainder is cash-settled at the APPC rate.
What is the current APPC rate in Kerala?
It has been held around ₹3.08–₹3.26 per unit, significantly lower than retail tariff rates, which is why self-consumption is more valuable than exporting surplus.
How long does KSEB take to install a net meter?
Typically around 10 days after technical approval, though 2026 has seen periodic delays due to nationwide net meter shortages.
How long does the entire net metering process take?
Usually 45–60 days from application to commissioning if documents are in order, with a regulatory outer limit of 135 days.
Do I need a battery to use net metering?
No, not for systems up to 10 kW. Battery storage (10–20%) is only required for domestic systems between 10 kW and 20 kW.
What is Time-of-Day billing and does it apply to me?
It’s a billing structure with separate peak/off-peak/solar rates, applicable to systems above 2 kW under the current regulations.
Can apartment residents use net metering?
Yes, through Virtual Net Metering (minimum 10 kW) or Group Net Metering frameworks designed for shared or multi-site setups.
Is there a fee to register for net metering?
Yes, ₹300 per kW under the revised 2025 fee structure, reduced from the earlier ₹1,000/kW.
Do I pay a grid support charge for net metering?
No, if your system is 10 kW or below, you’re exempt from grid support charges.
What’s the difference between net metering and net billing?
Net metering nets your import and export at the same retail rate; net billing values exported energy separately, often at a feed-in tariff, and applies to larger systems up to 500 kW.
Does my existing net metering contract change under the new rules?
No. If you were already approved under the earlier framework, your existing contract terms generally continue unchanged; the new rules apply to installations after the regulation’s effective date.
Can I get net metering with a three-phase connection for a bigger system?
Yes. The 3 kW figure applies specifically to single-phase inverters; three-phase setups support larger domestic systems within the 20 kW net metering ceiling.
Will my net metering credits ever expire?
Credits are valid within the current settlement year; at year-end, unused credit is cash-settled rather than carried over indefinitely.
Where do I apply for net metering in Kerala?
Through the KSEB portal in coordination with your solar installer, alongside your PM Surya Ghar national portal application if you’re also claiming the central subsidy.
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