How a net-metering bill is calculated, step by step

DISCO bills look intimidating, but a net-metering bill under the pre-2026 terms follows one short formula. Below, each step is applied to a real LESCO bill for September 2026 (tariff A-1b(03)T, 8 kW sanctioned load, 11.5 kW solar). Every number comes from the bill or its net-metering QR code, so you can follow along with your own.

The inputs

The two rates are printed in the bill-calculation lines of the net-metering QR as 25.320 X -47 and 46.850 X 326. Rs 46.85 is the time-of-use peak tariff (NEPRA, S.R.O. 279(I)/2026). Rs 25.32 is the buyback rate for surplus units under pre-2026 agreements, NEPRA’s national average power purchase price for 2026. Had the off-peak band been net positive, it would have been charged at the off-peak tariff, Rs 34.53.

Step 1: net units in each band

NET-OP = IMP-OP − EXP-OP = 871 − 918 = −47
NET-PK = IMP-PK − EXP-PK = 327 − 1   = 326
Billed units = −47 + 326             = 279

Off-peak and peak are never merged into one number before pricing. That single rule explains most surprise bills.

Step 2: add the carried-forward units

This bill is month 3 of 3, so it settles the whole quarter. The units carried from July and August are added:

Quarter off-peak = −47 + (−1,066) = −1,113
Quarter peak     = 326 + 622      =    948

In months 1 and 2 of a cycle this step is skipped and the month’s net units roll forward instead. See quarterly settlement explained.

Step 3: cost of electricity (COE)

Off-peak: −1,113 × 25.32 = −28,181.16  (credit)
Peak:        948 × 46.85 =  44,413.80  (charge)
COE                      =  16,232.64

The bill prints Rs 16,232.51; the 13 paisa difference is rounding. Note what happened: the quarter ended 165 units in credit (1,113 − 948), yet the energy cost is over Rs 16,000, because each peak unit costs 1.85 times what an off-peak unit earns.

Step 4: add the fixed charge

COE + fixed charge = 16,232.51 + 2,700 = 18,932.51

This is the total charges line. Since February 2026, time-of-use consumers pay Rs 675 per kW per month on the higher of half their sanctioned load or their MDI: here, half of 8 kW is 4 kW and MDI is 4 kW, so 4 × 675 = Rs 2,700. The fixed charge is not reduced by exports. Some bills add FPA (fuel price adjustment) or QTA (quarterly tariff adjustment) here; see FPA, fixed charges and taxes.

Step 5: electricity duty

E-DUTY = 1.5% × 16,232.51 = 243.49

Electricity duty is a provincial levy on the energy cost, printed as ED-RATE in the QR. The federal government asked provinces to stop collecting it through electricity bills from July 2025, so many domestic bills now show none; this bill still carries it. If yours doesn’t, skip this step.

Step 6: GST

GST = 18% × (16,232.51 + 2,700 + 243.49)
    = 18% × 19,176.00
    = 3,451.68  → bill shows 3,452

Sales tax is charged on the energy cost, the fixed charge and the duty together. In February 2025 the Federal Tax Ombudsman ordered DISCOs to charge GST on the gross value of imported units, not the net after exports. This bill uses the net figure; if your GST is well above 18% of the line above, that order is the likely reason.

Step 7: the current bill and what you pay

Taxes        = 243.49 + 3,452        =   3,695.49
Current bill = 18,932.51 + 3,695.49  =  22,628.00
Arrears      = −185,086  (credit carried in)
Payable      = −185,086 + 22,628     = −162,458  → printed "162,458 CR"

This household paid nothing. The Rs 22,628 came out of its credit balance. A household without that cushion would have paid Rs 22,628 in a quarter it exported more than it imported.

A shortcut for a quick estimate

With 1.5% duty and 18% GST, every rupee of energy cost becomes about Rs 1.198 on the bill, and every rupee of fixed charge becomes Rs 1.18. So:

Bill ≈ COE × 1.198 + fixed charge × 1.18
     ≈ 16,232.51 × 1.198 + 2,700 × 1.18 ≈ 22,632

Close enough to sanity-check any bill in your head. It also tells you that one peak unit avoided saves about 46.85 × 1.198 ≈ Rs 56 on this tariff, while one extra off-peak unit exported earns about 25.32 × 1.198 ≈ Rs 30.

What this formula does not cover

• Net-billing (2026) bills price imports and exports separately, with exports bought at a much lower rate. See net metering vs net billing.
• Protected-consumer slabs don’t apply: time-of-use connections (5 kW and above), which most solar homes have, cannot be protected consumers.
• Income tax, further tax and other levies can appear depending on your filer status and DISCO.

Solar Bill runs all of these checks automatically and tells you which line, if any, doesn’t add up.