These notes are drawn from a discussion with Anand Srinivasan, who has over 20 years of experience developing energy solutions in India. He is the founder of Vineeti Solar, where he helps deploy solar systems, and has a deep understanding of the Indian energy market. The perspective here is his, based on years in the field. Some points are personal opinion rather than data-backed claims. Policy and rate figures have been independently verified against the sources listed.
The metering arrangements in Karnataka
Two arrangements dominate in Karnataka today, and the difference between them decides the entire economics of a project.
Net metering. The customer is billed on net consumption at the end of the billing cycle. The solar first serves the home load, the surplus flows to the grid, and you draw it back later. The grid acts like an ideal battery with almost no losses. Within the billing cycle this is close to a one-for-one exchange, which is why it is the most favourable arrangement for the customer. Only the leftover surplus at annual settlement is paid out at a lower rate. The amount earned from the surplus is used to offset the fixed costs and is not carried over to the next month’s bill.
Net metering is available to all the customer segments in Karnataka with an irrevocable choice between net and gross metering. For commercial and industrial generators however, there is a cap of 2 MW on the capacity to avail net metering.
This landscape is changing rapidly with the domestic-content rule closing in. To commission a net-metering or open-access project, the government is moving to require solar cells from the domestic ALMM List-II, not just India-assembled modules. The original cutoff was 1 June 2026, but MNRE extended it to 31 December 2026 in a memorandum issued on 18 July 2026, specifically for net-metering and open-access projects. This is a genuine planning problem for developers, because ALMM List-II cells cost more and domestic solar cell capacity is still ramping. When this rule comes into effect, and when it combines with the capacity limits on larger rooftops, the economics of a C&I project shift, and battery storage starts to make more sense as a way to self-consume what you can no longer profitably export.
Gross metering. Here the customer exports all generated energy to the grid at a fixed rate that sits well below the retail import rate. For reference, Karnataka’s current DSPV export tariffs are around ₹3.86 per unit for domestic systems and ₹3.08 for other categories, against a retail import cost near ₹7. It is the least favourable arrangement for self-consumption, which is exactly why it suits a particular kind of user: captive plants that exceed the capacity threshold for net metering, generate far more than they consume, and are effectively in the business of selling power to the grid rather than offsetting their own bill.
Net billing, the Tamil Nadu model. This model is applicable to the commercial and industrial customers in Tamil Nadu and is worth naming separately, because it is often confused with net metering. Under net billing, the system is designed to serve your own load first, and only the excess you export is compensated, at a lower feed-in rate rather than at retail. That single change makes load matching and correct system sizing far more important, because every unit you fail to self-consume is worth much less once it is exported to the grid.
The through-line across all three is that the arrangement you qualify for, and the arrangement that suits your load, are not always the same, and the gap between them is where money is made or lost.
Challenges from the field
The regulations are only half the story. The other half is what happens when you actually build and maintain these systems, and this is where most of the pain lives.
1. Reliable component suppliers are the first real problem. The single most consequential decision on a project is often not the design, it is who makes the solar inverter and the battery, because the manufacturer has to still be in business until the site has paid for itself. Developers have to account for the risk that a supplier disappears before the equipment is paid off, and that risk shapes every choice by the project developers. It is the reason operators lean toward simple, swappable equipment and away from complex designs, even when the complex option performs better. Panel-integrated microinverters are one of the examples. They can outperform string inverters, especially under shading, but developers stay away from them and rely on string inverters, because a string inverter is something you can still source and replace years later when the original vendor may be long gone. This unreliability has left a trail of abandoned solar sites with no support, and it points at the deeper gap in India’s renewable ecosystem: post-installation service. Installing a system is relatively easy however, sustaining it for a decade is what needs to be done well.
2. PM Surya Ghar has scaled installers faster than it has scaled competence. The rapid growth in demand for rooftop solar systems has pulled a wave of registered providers into the market. Many of them are trained to connect a system but not to troubleshoot one when it fails. The result is households with solar setups that do not actually work, and no one nearby who can resolve the issue. Volume without capability is its own kind of failure, and it is quietly eroding customer trust in rooftop solar at exactly the moment the scheme is trying to build it.
3. Off-grid is a harder business than it looks, and the margins do not justify it. The core problem is a mismatch of expectations around load. Off-grid systems still commonly run on ordinary lead-acid batteries, which are poor at supporting high-power appliances, yet customers expect the supply to behave like the grid. When it does not, the dissatisfaction lands on the installer. Between the capital cost and the ongoing support burden, the margin in off-grid work is simply not worth the investment for most operators.
4. State and central schemes are pulling against each other. Karnataka’s Gruha Jyothi guarantee gives residential households up to 200 free units a month, and for most homes that covers the bulk of their consumption. That directly undercuts PM Surya Ghar, because a household already getting free power has little reason to invest in rooftop solar. Two arms of government are funding opposite outcomes, and the customer is caught in the middle. What the sector needs is more uniform and coordinated policy, so that state and central incentives point the same way instead of cancelling each other out.
5. The regulatory process itself is a hidden bottleneck. A challenge that often surprises new installers is how much the ESCOM approval process slows a project down. The frequently changing procedures and the slow pace of paperwork cause delays that leave customers waiting and frustrated, and the blame is then absorbed by the installer. Being mindful of the ESCOM process is as important as planning for the equipment and the installation.
The takeaway
The metering arrangement sets the ceiling on what a project can earn, and the field realities set the floor on what it will actually deliver. A good operator reads both. Know precisely which arrangement your customer qualifies for and which one suits their load, then build with equipment and a service plan that will still be standing when the policy has changed again, because in India, it will have.
Field observations are drawn from direct deployment experience. Policy and rate figures are current as of mid-2026 and verified against the sources below; they vary by state tariff order, DISCOM, and consumer category, and are changing quickly.
Sources
- SolarQuarter, KERC draft DSPV Regulations 2026: net metering open to all categories — https://solarquarter.com/2026/06/06/kerc-unveils-draft-dspv-regulations-2026-to-expand-distributed-solar-and-strengthen-grid-stability-in-karnataka/
- Energetica India, KERC DSPV reform export tariffs: ₹3.86 domestic (1–10 kW), ₹3.08 other DSPV, ₹2.30–2.93 PM Surya Ghar, locked 25 years — https://www.energetica-india.net/news/karnataka-overhauls-rooftop-solar-policy-with-dspv-reforms-and-flexible-net-metering
- Mercom India, MNRE extends ALMM List-II cell exemption for net-metering and open-access projects to 31 December 2026 — https://www.mercomindia.com/mnre-extends-almm-cell-exemption-for-net-metering-open-access-solar-projects
- MNRE official notice, ALMM List-II limited window till 31.12.2026 for net-metering and open-access RE projects (memorandum dated 18 July 2026) — https://mnre.gov.in/en/notice/almm-list-ii-for-solar-pv-cells-no-blanket-extension-subject-to-limited-window-till-31-12-2026-for-commissioning-net-metering-and-open-access-re-power-projects/
- pv-tech, MNRE ALMM List-II exemption extension detail; previous 31 May 2026 deadline — https://www.pv-tech.org/mnre-extends-almm-list-ii-exemption-for-net-metering-and-open-access-solar-projects/
- Mercom India, Karnataka PM Surya Ghar slow rollout and Gruha Jyothi 200 free units as competing incentive — https://www.mercomindia.com/free-electricity-program-slows-rooftop-solar-rollout-under-pm-surya-ghar
- Heaven Green Energy, net billing vs net metering distinction and Tamil Nadu model — https://www.heavengreenenergy.com/blog/what-is-net-metering-india