How Net Metering Works in the Philippines
TL;DR
Net metering lets a grid-connected home with solar up to 100 kW under RA 9513 export excess power through a bi-directional meter. Exports are credited at the generation-cost rate, roughly ₱5-7/kWh, not the full retail rate you pay for grid power. That gap is the whole reason a system sized to your daytime usage pays back faster than one built to export. Since April 2026 your distribution utility must act on a complete application within 10 working days.
- Used in the house as it is generated. Worth the full retail rate you would otherwise have paid — generation, transmission, distribution, subsidies and tax, all of it avoided. This is the valuable one, which is why it is the thick arrow.
- Exported to the grid. Credited at the generation rate only, roughly ₱5–7/kWh. Materially less than the rate you avoid by using it yourself.
- Drawn back from the grid at night or on dull days, and charged at the full retail rate as normal.
Net metering is the arrangement that lets a home with solar panels stay connected to the grid and get credit for the extra power it generates, rather than needing a battery to store every kWh on site. It is the default setup for most Philippine rooftop installations, and the part homeowners most often misunderstand is what the credit is actually worth.
The legal basis
Net metering for residential and small commercial installations is set out under RA 9513, the Renewable Energy Act, which allows systems up to 100 kW to participate. Anything above that falls under separate rules meant for larger commercial and industrial installations. For a typical household this cap is not a constraint — a 100 kW system is far larger than any roof-mounted residential array.
An April 2026 Department of Energy circular did not change that cap, but it put firm deadlines on the process around it:
- Distribution utilities must act on a complete application within 10 working days
- LGUs must issue the electrical permit within 3 working days
- The final inspection certificate is due within 7 working days
- The separate barangay permit step was removed
Our DOE 2026 net metering rules guide covers what changed and what did not in full.
How it physically works
Your installer replaces the standard meter with a bi-directional meter, which records two flows separately rather than totalling one:
- Power flowing from the grid into your home, which is ordinary consumption
- Power flowing from your panels back to the grid, which is output you generated but did not use at that moment
At the end of each billing cycle the utility nets the two against each other. You are billed for the difference.
Note what this does not do. A grid-tied net-metered system shuts down during a blackout, for the safety of line crews working on the wires. Net metering is a billing arrangement, not backup power — see do solar panels work during a brownout for why, and what changes that.
The part people get wrong: the credit rate
Exported power is credited on your next bill, but only at the generation cost rate — roughly ₱5-7/kWh. That is well below the full retail rate you pay for the electricity you buy. It is not a one-for-one swap.
The retail rate you avoid by using your own output includes generation plus transmission, distribution, system loss, subsidies and taxes. The credit you receive for exporting covers generation alone. Two different numbers for the same kilowatt-hour, depending on whether you consume it or send it away:
| What happens to a kWh you generate | What it is worth to you |
|---|---|
| You use it immediately in the house | The full retail rate you would otherwise have paid, every component of the bill included |
| You export it to the grid | The generation-cost rate only, roughly ₱5-7/kWh |
The generation rate tracks your utility’s generation charge, which moves up and down with fuel costs and the peso, so check a recent bill for the current figure rather than assuming. The Meralco rate archive has the month-by-month record of both the all-in and generation figures for Meralco customers.
Why this decides how big a system to buy
That gap is the whole reason self-consumption matters more than export volume. A kWh you generate and use directly cancels a kWh you would have bought at full price. The same kWh exported comes back at a materially lower credit.
So the household that runs its aircon, pump, washing machine and water heater during daylight — soaking up output as it is produced — saves meaningfully more than one that is out all day and exports most of its generation. Same panels, same sunshine, different return.
The practical consequence is that a system sized to your daytime load usually pays back faster than an oversized one built to export. Oversizing buys you more kilowatt-hours at the lower credit rate, which is the worse half of the trade. Our payback period guide works through how that plays out over the life of a system, and the solar panel calculator will size against your own bill.
If your usage is mostly in the evening, the honest answer is that net metering does comparatively little for you, and the question becomes whether a battery earns its cost instead — see net metering vs battery storage.
Applying
Applications go through your distribution utility: Meralco across most of Metro Manila and the nearby provinces, or your local electric cooperative elsewhere. Your installer normally handles the paperwork and the meter swap as part of the job. The sequence is the same almost everywhere:
- System design and application. Your installer sizes the system and files the application with the utility, including the technical details of the installation.
- Utility review. The utility checks the design against its interconnection standards before clearing it. This is the step now bound by the 10-working-day deadline.
- Meter swap. Once approved, the utility replaces your meter with the bi-directional one.
- Net metering agreement. You sign the agreement, and exports begin appearing as credits on your monthly bill.
Utility-specific walkthroughs: Meralco, VECO, and Davao Light. For the general checklist, see how to apply for net metering, and for the drawing your installer has to submit, the single line diagram.
If your utility does not offer net metering, or the wait is impractical, solar without net metering covers what still works. And if you have been offered a gross metering arrangement instead, the difference matters to your return — gross vs net metering sets out which is which.
Frequently asked questions
What is net metering?
It's the arrangement that lets a home with solar stay connected to the grid and get bill credit for excess power it exports, instead of needing a battery to store every kWh on site. A bi-directional meter tracks power flowing both ways and the utility nets them against each other each billing cycle.
How is exported solar power credited on my bill?
At the generation cost rate, roughly ₱5-7/kWh, which is well below the full retail rate you pay for grid electricity. It is not a one-for-one swap. That rate tracks your utility's generation charge, which moves with fuel costs, so check your latest bill for the current figure.
What size solar system qualifies for net metering?
Under RA 9513, residential and small commercial systems up to 100 kW can participate. Anything larger falls under separate rules for commercial and industrial installations.
Do I need a battery to benefit from solar under net metering?
No. Net metering is the alternative to a battery for handling daytime excess — the grid absorbs it and credits you. A battery becomes worth considering for a different reason: keeping power during an outage, which net metering does not do.
How long does a net metering application take?
Since April 2026 a distribution utility must act on a complete application within 10 working days. Your LGU has 3 working days for the electrical permit and 7 for the final inspection certificate, and the separate barangay permit step was dropped.
What is a bi-directional meter?
The meter your utility installs once net metering is approved. It separately records power you draw from the grid and power you send back, rather than just totalling consumption.