Can You Sell Solar Electricity in India? Business Models Explained

India's solar revolution has moved far beyond simple rooftop installations that offset your own electricity bill. Today, multiple business models allow individuals, businesses, and investors to generate solar electricity and sell it — creating a revenue stream from sunshine. Whether you own a large rooftop in Chennai, agricultural land in Thanjavur, or a factory in Coimbatore's industrial belt, there is likely a model that works for your situation.

This guide breaks down every viable way to sell solar electricity in India as of 2026, with specific focus on how each model works in Tamil Nadu under TNERC regulations and TANGEDCO procedures.

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Understanding the Business Models

Before diving into specifics, here is an overview of all the models available today:

Business Model	Who Can Use It	Typical Scale	Revenue/Saving Mechanism	Complexity
Net Metering	Residential, commercial, industrial	1 kW – 1 MW	Offset your own bill unit-for-unit	Low
Net Billing / Net Feed-in	Residential, commercial	1 kW – 1 MW	Export at feed-in tariff (lower than retail)	Low
Gross Metering	Investors, landowners	1 kW – 1 MW	Sell 100% generation at fixed tariff	Medium
Third-Party Sale (PPA)	Commercial rooftop owners, developers	100 kW – 1 MW	Sell to a nearby consumer at agreed rate	Medium
Open Access	Large generators, IPPs	1 MW and above	Sell to any HT consumer via grid	High
Group Net Metering	Apartment associations, cooperatives	10 kW – 500 kW	Share generation among group members	Medium
PM KUSUM Component-A	Farmers, landowners	500 kW – 2 MW	Sell to DISCOM at fixed tariff for 25 years	High

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Net Metering: The Most Common Model

Net metering remains the most popular and accessible model for solar adoption in Tamil Nadu. Under TNERC's net metering regulations, the energy your rooftop system exports to the grid is credited against the energy you consume from the grid — unit for unit.

How It Works in Tamil Nadu

1. You install an on-grid solar system connected to your TANGEDCO service connection
2. TANGEDCO installs a bidirectional (net) meter at your premises
3. When your solar generates more than you consume, excess flows to the grid and the meter runs backward
4. At the end of the billing cycle, you pay only for the net consumption (grid import minus solar export)
5. If you export more than you import, the surplus carries forward as credit for subsequent billing cycles

Key Tamil Nadu Rules

• Maximum capacity: Up to 90% of your sanctioned connected load, or the contract demand, whichever is lower
• Settlement period: Annual settlement (April to March). At the end of the settlement period, excess credits are compensated at a rate determined by TNERC — currently approximately Rs 2.00–2.50 per unit
• Eligibility: LT and HT consumers with TANGEDCO connections

Net metering is ideal when your solar generation closely matches your consumption. If your system generates roughly what you consume annually, you effectively get free electricity for 25 years after the payback period.

Use our solar savings calculator to estimate how much you can save with net metering based on your current consumption.

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Net Billing / Net Feed-in

Net billing is gaining traction as states progressively move away from pure net metering. Under net billing, the energy you export to the grid is compensated at a feed-in tariff — which is typically lower than the retail tariff you pay for grid electricity.

How It Differs from Net Metering

• Net metering: 1 unit exported = 1 unit credit (valued at your retail tariff of Rs 6–8/unit)
• Net billing: 1 unit exported = credit at feed-in rate (Rs 2.00–3.00/unit)

This difference makes self-consumption far more valuable under net billing. The financial case for batteries and load-shifting becomes stronger, as every unit you consume directly from solar saves you Rs 6–8, while exporting saves you only Rs 2–3.

Implications for System Design

Under net billing, oversizing your system is less attractive. Instead, the goal is to match your daytime consumption as closely as possible and minimise export. Adding battery storage to capture excess daytime generation for evening use becomes a financially sound decision.

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Gross Metering: Selling 100% to the Grid

Under gross metering, all electricity generated by your solar system is fed into the grid. You earn a fixed tariff for every unit generated — determined by TNERC's prevailing feed-in tariff orders. Your consumption continues to be billed separately at normal TANGEDCO rates.

Who Benefits from Gross Metering

• Landowners and investors who want to monetise rooftop or land area without offsetting their own consumption
• Properties with low electricity consumption where net metering savings would be minimal
• Businesses that want a predictable, long-term revenue stream independent of their consumption patterns

Tamil Nadu Gross Metering Tariff

The gross metering tariff in Tamil Nadu is determined periodically by TNERC. As of 2025-26, the rate is approximately Rs 2.00–2.80 per unit depending on the capacity and vintage of the tariff order. This is significantly lower than the retail tariff, which is why gross metering is generally less attractive than net metering for consumers with high electricity bills.

Financial Comparison

Parameter	Net Metering (5 kW)	Gross Metering (5 kW)
Monthly generation	600 units	600 units
Value per exported unit	Rs 6–8 (retail rate offset)	Rs 2.00–2.80 (feed-in tariff)
Monthly benefit	Rs 3,600–4,800	Rs 1,200–1,680
Payback period	4–5 years	10–14 years

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Third-Party Sale (Power Purchase Agreement)

The third-party sale model allows a solar developer or rooftop owner to sell electricity directly to a nearby consumer at a mutually agreed rate — typically 15–30% below the prevailing TANGEDCO tariff for the buyer.

How It Works

1. A solar developer installs panels on a building (a factory, warehouse, or commercial property)
2. The developer signs a Power Purchase Agreement (PPA) with a nearby electricity consumer
3. The consumer buys solar electricity at a discounted rate (say Rs 5/unit vs Rs 7–8/unit from TANGEDCO)
4. The developer earns revenue from the PPA over 15–25 years
5. The building owner earns roof rental income

Tamil Nadu Context

Third-party PPAs are increasingly common in Tamil Nadu's industrial belts — Ambattur, Guindy, and Oragadam in Chennai, SIDCO industrial estates across the state, and the textile hub of Tirupur. Factory owners who lack rooftop space or capital lease their neighbour's rooftop or install ground-mounted systems to supply power via a dedicated line.

TNERC regulations permit third-party sale for systems above a certain threshold, and wheeling and banking charges apply. The economics work best at scales above 100 kW where the per-unit cost advantage is material.

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Open Access Solar: For Large Consumers

Open access allows large electricity consumers (typically HT consumers with a contract demand of 1 MW or more) to purchase solar power from a remote generator through the grid. This is the model that enables large-scale solar farms to sell electricity to factories, IT parks, and commercial complexes located far away.

Key Charges in Open Access

• Wheeling charges: For using the TANGEDCO transmission and distribution network
• Cross-subsidy surcharge: To compensate the DISCOM for revenue loss
• Transmission charges: If power flows through the STU (state transmission utility)
• Banking charges: If generation and consumption are time-shifted

Who Uses Open Access in Tamil Nadu

• IT parks and large office campuses along OMR and in Coimbatore
• Textile mills in Tirupur and Erode with contract demand above 1 MW
• Automobile manufacturers and auto ancillary units in Chennai's southern corridor
• Large hotel chains and hospital groups with multiple locations

The landed cost of open access solar power in Tamil Nadu typically ranges from Rs 4.50–6.00 per unit after all charges, compared to Rs 7–9 per unit for TANGEDCO HT supply.

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Group Net Metering

Group net metering allows a group of consumers — such as residents of an apartment complex or members of a cooperative — to share the output of a single solar installation. This is particularly relevant in Chennai where apartment living is the norm.

How It Works

• A solar system is installed at one location (typically the apartment terrace or a nearby plot)
• The generation is allocated proportionally among registered group members
• Each member's TANGEDCO bill is credited with their share of the solar generation
• One net meter at the generation point, with virtual allocation to member consumer numbers

Tamil Nadu Status

TNERC has issued guidelines for group net metering, and the model is gaining adoption in larger apartment complexes across Chennai, Coimbatore, and Madurai. Tristar has executed several group net metering projects for housing societies with 50–200 flats.

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PM KUSUM Component-A: For Farmers and Landowners

The PM KUSUM scheme allows farmers and landowners to set up solar power plants of 500 kW to 2 MW capacity on their agricultural or barren land and sell the entire generation to the DISCOM (TANGEDCO in Tamil Nadu) at a fixed tariff for 25 years.

How It Works

• Farmer provides land (approximately 2 acres per MW)
• A solar developer installs and operates the plant
• TANGEDCO purchases all generated electricity at a fixed tariff
• Farmer earns lease rental income of Rs 30,000–50,000 per acre per year
• Developer earns revenue from the PPA with TANGEDCO

This model is particularly attractive for farmers in Tamil Nadu's central and southern districts — Thanjavur, Sivaganga, Ramanathapuram — where agricultural income is seasonal and land is available.

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Choosing the Right Model

The best business model depends on your specific situation:

• Homeowner with high electricity bill: Net metering delivers the fastest payback
• Business with daytime operations: Net metering or third-party PPA
• Investor with rooftop or land: Gross metering or PM KUSUM
• Apartment resident: Group net metering
• Large industrial consumer (above 1 MW): Open access solar PPA
• Farmer with unused land: PM KUSUM Component-A

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Next Steps

Understanding which model fits your situation is the first step. The financial returns vary significantly depending on your consumption pattern, location, available area, and tariff category.

Calculate your potential solar savings using our free tool, or contact our team for a personalised consultation on which business model maximises your returns. Tristar's team has executed projects across all these models in Tamil Nadu and can guide you from feasibility analysis through commissioning and TANGEDCO liaison.