Solar electricity selling rate in India

India is a country blessed with abundant sunshine, making it a prime location for harnessing solar energy. Solar energy is a clean, renewable source of power that can be used to generate electricity, heat water, and power a variety of applications.

India’s Solar Power Potential

India receives sunlight for about 300 days a year, with most parts of the country receiving a daily average solar radiation of 4-7 kWh per square meter. This translates to a massive solar energy potential of around 5,000 trillion kWh per year, which is significantly more than the total energy produced from all fossil fuels in India.

The Indian government has recognized the potential of solar energy and has set ambitious goals for solar power generation. The National Solar Mission, launched in 2010, aims to achieve a total installed capacity of 100 GW by 2022 and 227 GW by 2027. As of December 31, 2023, India’s solar power installed capacity has already reached 73.32 GW, making it a global leader in solar energy adoption.

Benefits of Solar Energy in India

Solar energy offers several benefits for India, including:

  • Reduced dependence on fossil fuels: Solar energy can help India reduce its reliance on imported fossil fuels, such as coal and oil, which can lead to increased energy security and lower energy costs.
  • Reduced air pollution: Solar energy is a clean source of power that does not produce greenhouse gases or other air pollutants. This can help improve air quality and public health in India.
  • Increased access to electricity: Solar energy can be used to provide electricity to remote and underserved areas that are not connected to the national grid.
  • Job creation: The solar energy sector is a growing industry that is creating new jobs in India.

Challenges of Solar Energy in India

Despite the many benefits, there are also some challenges associated with solar energy in India, including:

  • High upfront costs: The initial cost of installing solar panels can be high, which can be a barrier for some consumers.
  • Land availability: Large-scale solar power plants require a significant amount of land.
  • Energy storage: Solar energy is a variable resource, and there is a need for efficient and cost-effective energy storage solutions to store solar energy during the day for use at night.

The Future of Solar Energy in India

The future of solar energy in India is bright. The government’s ambitious targets, along with declining costs of solar panels and technological advancements, are expected to lead to continued growth in the solar energy sector. Solar energy has the potential to play a major role in meeting India’s growing energy demand and reducing its carbon footprint.

Solar Electricity Selling Mechanisms

There are several mechanisms in place for selling solar electricity in India. These mechanisms aim to incentivize solar power generation and provide a fair return to solar power producers. Here’s a breakdown of the most common mechanisms:

Source – Medium

1. Net Metering:

  • This is the most common mechanism for selling solar electricity in India.
  • In net metering, a bi-directional meter is installed at the consumer’s premises. This meter tracks the electricity imported from the grid and the electricity exported to the grid.
  • Consumers are credited for the electricity they export to the grid at a pre-determined rate, known as the feed-in tariff. The feed-in tariff is typically lower than the retail electricity tariff.
  • At the end of the billing cycle, the consumer’s electricity bill is based on the net difference between the imported and exported electricity.
  • If the consumer exports more electricity than they import, they receive a credit that can be carried forward to future billing cycles.

2. Gross Metering:

  • In gross metering, a single meter is used to measure the total electricity generated by the solar power plant.
  • The entire amount of electricity generated is sold to the electricity distribution company (DISCOM) at a pre-determined tariff, known as the bulk power tariff.
  • This mechanism is typically used for larger solar power plants.

3. Solar Power Purchase Agreements (PPAs):

  • In a PPA, a solar power producer agrees with a DISCOM or another electricity buyer to sell solar electricity at a pre-determined price for a fixed period.
  • PPAs provide long-term certainty for both the buyer and the seller.
  • This mechanism is typically used for large-scale solar power projects.

Choosing the Right Selling Mechanism:

The best-selling mechanism for a solar power producer depends on several factors, such as the size of the solar power plant, the location of the plant, and the consumer’s electricity consumption patterns.

Here’s a table summarizing the key differences between the three mechanisms:

Net MeteringSuitable for rooftop solar systemsEncourages self-consumption, reduces dependence on the gridLower feed-in tariff compared to retail tariff
Gross MeteringSuitable for larger solar power plantsProvides a fixed income streamNo self-consumption, higher upfront investment
Solar Power Purchase Agreements (PPAs)Suitable for large-scale solar power projectsLong-term certainty for both buyer and sellerRequires a strong credit rating to secure a PPA

Solar Electricity Selling Rate in India

Unfortunately, there isn’t a single, fixed rate for selling solar electricity in India. The selling rate depends on the specific mechanism you choose and other factors. Here’s a breakdown of how the rates are determined in each mechanism:

Net Metering:

  • The rate at which you sell electricity back to the grid under net metering is determined by the feed-in tariff.
  • Feed-in tariffs are set by the respective State Electricity Regulatory Commissions (SERCs) and can vary depending on the state you live in.
  • Generally, feed-in tariffs are lower than the retail electricity tariff that you pay for electricity consumed from the grid.

Gross Metering and Solar Power Purchase Agreements (PPAs):

  • The rate for selling electricity in gross metering and PPAs is determined by the bulk power tariff.
  • Bulk power tariffs are negotiated between the solar power producer and the electricity buyer (DISCOM or another entity) and are not publicly available information.
  • However, bulk power tariffs are generally higher than feed-in tariffs under net metering.

Here are some resources to help you find the current selling rates in your area:

  • State Electricity Regulatory Commission (SERC) website: Each state in India has its own SERC website. You can find the website of your state’s SERC through a web search and look for information on net metering regulations and feed-in tariffs.
  • Solar power companies: Many solar power companies operating in India can provide you with information on current feed-in tariffs and bulk power tariff negotiation for PPAs.

Additional factors affecting selling rates:

  • Time of Day: Some states offer time-of-day tariffs for net metering, where the feed-in tariff varies depending on the time of day you export electricity to the grid. Electricity exported during peak hours may receive a higher tariff compared to off-peak hours.
  • Policy changes: Government policies and regulations can also impact selling rates. Stay updated on any recent changes in your state’s solar power policies that might affect selling rates.

Net Metering in India

Net metering is a popular scheme in India that encourages the adoption of rooftop solar power systems. Here’s a detailed explanation of net metering in India:

Source – Energetica India

What is Net Metering?

In net metering, a bi-directional meter is installed at your premises. This meter records the electricity you import from the grid and the surplus electricity you generate from your solar panels and export back to the grid.

How Does Net Billing Work?

  • Your electricity bill is based on the net difference between the imported and exported units of electricity during a billing cycle.
  • Let’s say you consumed 500 units of electricity from the grid in a month and your solar panels generated 400 units, which were exported back to the grid.
  • In this scenario, you would only be billed for the net consumption of 100 units (500 units consumed – 400 units exported).

Benefits of Net Metering:

  • Reduced Electricity Bills: By generating your solar power and exporting excess to the grid, you can significantly reduce your electricity bills.
  • Increased Self-Consumption: Net metering incentivizes consuming the solar power you generate during the day, reducing dependence on the grid.
  • Environmentally Friendly: By relying more on solar power, you contribute to reducing greenhouse gas emissions and promoting clean energy.

Important Points to Consider:

  • Feed-in Tariff: The rate at which you receive credit for exported electricity is determined by the feed-in tariff set by your State Electricity Regulatory Commission (SERC). Feed-in tariffs are generally lower than the retail tariff you pay for grid electricity.
  • Net Metering Capacity: The Ministry of Power allows net metering for prosumers (consumers who also produce electricity) for loads up to 500 kW or the sanctioned load, whichever is lower.
  • Net Carry Forward: Some states allow carrying forward any unutilized export credit to future billing cycles.

Overall, net metering is a win-win situation for both consumers and the environment. It allows you to save money on electricity bills, utilize clean energy, and contribute to a greener future.

Feed-in Tariff (FiT) System in India

The Feed-in Tariff (FiT) system in India has been an evolving policy tool for promoting solar energy adoption. Here’s a breakdown of the current situation:

Source – Thoughts

Previous FiT System:

  • In the past, India had a fixed FiT system where DISCOMs (electricity distribution companies) offered guaranteed rates for electricity generated from solar power plants.
  • These tariffs were set for a specific period, typically 25 years, providing long-term certainty for investors.
  • However, the fixed FiT system faced criticism for becoming too expensive for DISCOMs as solar panel costs declined significantly.

Current Status:

  • Limited Application: Presently, there’s no standardized national FiT system in India.
  • The Ministry of New and Renewable Energy (MNRE) discontinued centralized FiT programs in 2017.
  • Focus on Auctions: The current focus is on competitive bidding through auctions for solar power projects. This approach aims to discover market-determined tariffs.

Possible Revival for Smaller Projects:

  • There have been talks about re-introducing FiT for smaller solar projects, particularly rooftop solar installations.
  • The idea is to incentivize investment in this segment and promote wider adoption of solar energy at the consumer level.
  • However, specific details and timelines for a new FiT program for smaller projects are yet to be finalized by the government.

Alternatives to FiT:

  • In the absence of a central FiT system, some states offer their own net metering policies with pre-determined feed-in tariffs for rooftop solar.
  • These tariffs are typically lower than retail tariffs but provide some incentive for solar power generation.

Here are some additional points to consider:

  • Benefits of FiT: A well-designed FiT system can provide stability and predictability for investors in the solar sector. This can encourage investment and accelerate solar power adoption.
  • Challenges of FiT: Setting FiT rates that are too high can put a financial strain on DISCOMs. Additionally, frequent adjustments might be needed to reflect changing market dynamics.

Overall, the FiT system in India is undergoing a period of transition. While a central FiT program seems unlikely shortly, there might be a renewed focus on FiTs for smaller solar projects. Net metering with feed-in tariffs remains an option for those considering rooftop solar in some states.

Renewable Energy Certificates (RECs) in India

In India, Renewable Energy Certificates (RECs) are market-based instruments that promote renewable energy generation and compliance with renewable purchase obligations (RPOs). Here’s a breakdown of how they work:

Source – Vajiram

What is a REC?

  • A REC represents 1 Megawatt-hour (MWh) of electricity generated from a renewable energy source like solar, wind, hydro, etc.
  • It’s a tradable commodity, separate from the actual electricity generated.

How Does the REC System Work?

  1. Eligible Entities: Certain entities, like DISCOMs (electricity distribution companies) and large industries, have mandatory RPOs. This means they need to source a specific percentage of their electricity from renewable sources.
  2. Issuing RECs: Renewable energy power plants with a minimum capacity of 250 kW and meeting specific criteria can apply for accreditation with state agencies. Once accredited, they can register with the national agency and get RECs for each MWh of clean electricity generated.
  3. Trading RECs: These RECs can be sold on power exchanges like Indian Energy Exchange Ltd. or Power Exchange India Ltd.
  4. Compliance with RPO: Entities with RPO can buy RECs from the market to meet their renewable energy purchase obligations. By owning an REC, they demonstrate that they’ve supported renewable energy generation, even if they haven’t directly purchased the renewable electricity.

Benefits of RECs

  • Promotes Renewable Energy: Creates a market for renewable energy, providing additional revenue streams for generators and incentivizing further development.
  • Flexibility for RPO Compliance: Entities can meet their RPOs through market purchases of RECs, offering flexibility compared to directly sourcing renewable electricity.
  • Encourage Green Investment: Increased demand for RECs can attract investments in the renewable energy sector.

Challenges of RECs

  • Price Fluctuations: The price of RECs can fluctuate depending on supply and demand, impacting both generators and buyers.
  • Market Liquidity: A well-functioning REC market requires sufficient liquidity, meaning enough buyers and sellers to ensure smooth transactions.
  • Greenwashing Concerns: There’s a possibility that entities might solely rely on REC purchases to meet RPOs without actually increasing their consumption of renewable electricity.

Overall, RECs play a significant role in India’s renewable energy goals. They incentivize clean energy generation, provide flexibility for RPO compliance, and contribute to a greener electricity mix.

Comparison of Solar Electricity Selling Rates Across States

Unfortunately, providing a comprehensive comparison table of solar electricity selling rates across all states in India is not feasible due to several factors:

  • Limited Centralized Fit System: As mentioned previously, India currently does not have a standardized national FiT system.
  • State-Specific Regulations: Each state has its own regulatory body (State Electricity Regulatory Commission or SERC) that determines the specific rules and tariffs for net metering and other solar power selling mechanisms.
  • Dynamic Rates: Feed-in tariffs and bulk power tariffs can change periodically based on various factors like SERC revisions, market fluctuations, and policy updates.

Therefore, it’s challenging to maintain a single, accurate, and up-to-date table encompassing all the complexities. However, I can offer some alternative ways to find the current selling rates in your specific location:

1. State Electricity Regulatory Commission (SERC) Websites:

  • Each state in India has a SERC website. You can find the website of your state’s SERC through a web search and look for information on:
    • Net metering regulations
    • Feed-in tariffs for various consumer categories (residential, commercial, etc.)
    • Bulk power tariff determination process (if applicable)

2. Solar Power Companies:

  • Many solar power companies operating in India can provide you with information on:
    • Current feed-in tariffs in your area
    • Assistance in understanding net metering policies
    • Potential bulk power tariff negotiation for PPAs (larger projects)

3. Online Resources:

  • Some websites and online portals aggregate information on solar policies and tariffs across various states. However, it’s essential to verify the information with official sources like SERC websites to ensure accuracy and avoid relying on outdated data.

Remember, the best approach is to conduct your research based on your specific location and needs. By exploring the resources mentioned above, you can find the most relevant and up-to-date information on solar electricity selling rates in your state.

Challenges and Opportunities in Solar Energy in India

While India has emerged as a global leader in solar energy adoption, there are still challenges to overcome for further growth. Here’s a breakdown of both:


  • High upfront costs: Installing solar panels requires a significant initial investment, which can be a barrier for individual households and small businesses.
  • Land availability: Large-scale solar power plants require vast tracts of land, leading to potential conflicts with other land uses like agriculture and housing.
  • Grid Integration: Integrating intermittent renewable energy sources like solar into the grid requires robust infrastructure and efficient management systems to handle fluctuations in power generation.
  • Financing constraints: Access to affordable and long-term financing remains a challenge for some solar projects, especially for smaller players.
  • Policy uncertainty: Frequent changes or uncertainties in policies related to solar energy can create apprehension among investors and developers, hindering long-term planning.
  • Import dependence: India currently relies heavily on imports for solar equipment, making the sector vulnerable to global market fluctuations and potentially impacting project costs.
  • Lack of skilled workforce: The growing solar sector requires a skilled workforce for installation, maintenance, and manufacturing, which needs proper training and development programs.


  • Technological advancements: Continuous advancements in solar technologies are leading to cost reductions, improved efficiency, and the development of innovative solutions like solar storage.
  • Government support: The Indian government has been actively promoting solar energy through various initiatives like subsidies, tax benefits, and ambitious capacity targets. This support is expected to continue fostering growth in the sector.
  • Declining solar panel costs: The cost of solar panels has significantly decreased over the past decade, making solar energy an increasingly attractive option compared to traditional sources.
  • Job creation: The solar sector is a growing industry with the potential to create a significant number of jobs across various segments, including installation, manufacturing, and project development.
  • Energy security: By increasing its reliance on domestic solar energy, India can reduce its dependence on imported fossil fuels and enhance its energy security.
  • Environmental benefits: Widespread adoption of solar energy can significantly contribute to reducing greenhouse gas emissions and combating climate change.
  • Market diversification: The Indian solar market can explore opportunities beyond just domestic deployment and become a global hub for manufacturing and exporting solar components.

Overall, despite the challenges, the opportunities presented by solar energy in India are vast and promising. By addressing existing constraints and capitalizing on emerging trends, India can further solidify its position as a leader in the global clean energy transition.

Future Outlook of Solar Energy in India

The future of solar energy in India appears bright, with continued growth and increased significance expected in the coming years. Here are some key trends outlining the anticipated future:

Increased Capacity and Ambitious Targets:

  • India’s ambitious goal of achieving 500 GW of renewable energy installed capacity by 2030, with a significant portion dedicated to solar, is expected to drive rapid capacity expansion.
  • Technological advancements and cost reductions are likely to make solar energy even more competitive, further accelerating its adoption across various sectors.

Policy and Financial Support:

  • Continued government support through favorable policies, subsidies, and financial instruments is expected to incentivize investment and project development.
  • New financial models, such as green bonds and rooftop solar financing schemes, can provide innovative solutions for overcoming financing constraints.

Technological Advancements and Innovation:

  • Advancements in solar cell technology, storage solutions, and grid integration technologies will play a crucial role in enhancing efficiency, addressing intermittency issues, and ensuring seamless integration into the grid.
  • Innovations like bifacial solar panels, floating solar plants, and building-integrated photovoltaics (BIPV) are expected to offer new avenues for solar energy deployment.

Decentralized Generation and Rooftop Solar:

  • Rooftop solar installations on residential, commercial, and industrial buildings are expected to witness significant growth, empowering individuals and businesses to generate their own clean energy.
  • This trend will contribute to grid stability, reduce dependence on centralized generation, and empower local communities.

Focus on Manufacturing and Exports:

  • India has the potential to become a global leader in solar manufacturing, creating jobs, boosting exports, and reducing reliance on imported components.
  • Government initiatives and favorable policies can attract investments and foster the development of a robust domestic solar manufacturing ecosystem.

Challenges and Opportunities:

  • Addressing challenges like land availability, skilled workforce development, and grid modernization will be crucial for sustainable long-term growth.
  • Embracing opportunities in technology innovation, financial diversification, and international collaborations can further accelerate India’s solar energy transition.

Overall, the future of solar energy in India is promising, with the potential to contribute significantly to the nation’s energy security, environmental sustainability, and economic growth. By addressing existing challenges and capitalizing on emerging trends, India can become a global leader in clean energy and pave the way for a brighter future.


In conclusion, India has emerged as a leading player in the global solar energy landscape. With abundant sunshine, ambitious government targets, and declining costs, solar energy holds immense potential to transform India’s energy sector.

Despite existing challenges like initial costs, grid integration, and policy uncertainties, the opportunities presented by solar power are vast. Technological advancements, continued government support, and a focus on innovation are driving the sector forward.

The future of solar energy in India is bright, with the potential for exponential growth, job creation, and environmental benefits. By addressing the remaining challenges and harnessing the immense potential of this clean energy source, India can contribute significantly to a sustainable future and become a global leader in the clean energy transition.

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