The billing system under which consumers with rooftop solar panels get credit for the surplus electricity they feed into the grid is called:

Net metering is a billing mechanism that credits owners of solar energy systems for the electricity they add to the grid.

How net metering works:

• A consumer installs solar panels, usually on the rooftop of a house, office or factory.
• During the day, when the panels produce more electricity than the building uses, the extra power flows into the electricity grid.
• At night, or on cloudy days, the consumer draws electricity from the grid as usual.
• A special two-way (bidirectional) meter records both the electricity taken from the grid and the electricity sent into it.
• The consumer is billed only for the "net" electricity used, that is, the electricity drawn minus the electricity exported.
• If the consumer exports more than they use, the surplus may be carried forward as credit to the next billing period, or paid for at a fixed rate, depending on state rules.

Related systems:

• "Gross metering": all the electricity produced by the solar system is sold to the grid at a fixed tariff, and the consumer pays separately for all the electricity used.
• "Net billing": exported and imported electricity are valued at different rates.

Benefits of net metering:

• It lowers electricity bills for consumers.
• It encourages the use of renewable energy and reduces dependence on fossil fuels.
• It reduces losses in transmission, as power is produced close to where it is used.

India and rooftop solar:

• In India, the rules for net metering are framed by the State Electricity Regulatory Commissions, within guidelines of the central government.
• The "PM Surya Ghar: Muft Bijli Yojana" (2024) aims to provide rooftop solar systems for about one crore households, with central financial assistance.

Why not the other options?

• ✗Smart metering uses digital meters that send readings automatically.
• ✗Prepaid metering requires payment before use.
• ✗Time-of-day tariff charges different rates at different hours.