Your surplus solar units don't bank forever. Here's what BESCOM actually does with them.

Most homeowners think banked units just keep accumulating.

Net metering lets you export daytime solar surplus to the grid and draw it back later, and within a billing year that works close to how people assume — export more than you import in a sunny month, and the extra units carry forward to offset a cloudy or high-usage month down the line. That monthly banking is genuinely useful. What it isn't is permanent. At the end of your net metering billing year, BESCOM settles whatever units you haven't used, and the value you get for them is nowhere near what you'd get for offsetting your own consumption. Most quotes never mention this, because it doesn't matter for a right-sized system — it only bites homeowners who bought bigger than their usage to "bank" surplus for later.

How the annual settlement actually works.

Under Karnataka's net metering regulations, unused export credits don't reset to zero — but they don't carry into the next billing year at full retail value either. At year-end, BESCOM pays out any remaining banked units at a rate tied to the average cost of power it purchases (a regulator-set rate, revised periodically), which typically runs well below what you'd have saved by using those units to offset your own household consumption at your normal tariff slab. In practice, a unit that would have saved you ₹6–8 if it had offset your own usage during the year gets settled for a fraction of that once the year closes — and then the clock resets for the next billing cycle.

Where the credit sits	What it's actually worth
Exported and used to offset your own bill within the same billing year	Full value — effectively your normal per-unit tariff rate, the reason net metering pays off.
Still unused when the billing year closes	Settled at BESCOM's regulator-set purchase rate — a small fraction of retail value, paid out once.
Assumed to "roll over" into next year at full value	Doesn't happen — this is the assumption that catches oversized systems out.

Why this changes how you should size a system.

A system sized to comfortably cover your own annual consumption — with export happening because your daytime generation and consumption don't line up hour to hour, not because you deliberately overbuilt — captures nearly all its value at full tariff rate through normal monthly banking. A system sized well beyond your usage, on the logic that "more panels means more banked credit for later," runs into the settlement wall every year: a chunk of what it generates never gets used at full value, because there simply isn't enough of your own consumption left in the billing year to absorb it. That surplus doesn't disappear, but it's worth a fraction of what the same generation would be worth if it were sized to match your actual load instead.

This is a different conversation from your BESCOM sanctioned load cap (which limits how big a system BESCOM will approve) — this is about whether the size you're approved for is actually the size worth building, once you account for what unused units settle for.

How to check where you stand

• Ask your installer for your billing year's start and end date — it's set when your net metering agreement is signed, and it's what determines when unused credits get settled, not the calendar year.
• Pull your last 12 months of actual consumption, not just your current bill, and size the system against that rather than the maximum your roof or sanctioned load allows.
• Ask directly what happens to surplus units at year-end and get the settlement rate in writing — a credible installer will tell you this unprompted, not just quote you the biggest system your roof supports.
• If you're planning for future load — an EV, a home addition — treat that as a reason to revisit sizing later, not a reason to overbuild today and let the surplus sit unused for a year.

A homeowner in JP Nagar we advised had been quoted a 6 kW system by another installer, sized to his roof rather than his usage, with the pitch that "extra units just bank for next year." His actual annual consumption supported a 4 kW system comfortably, with the remaining 2 kW producing surplus that, on our review of his sanctioned load and past 12 months of bills, would mostly have gone unused come settlement — worth a small fraction of what it cost to install. We sized him at 4 kW instead, with room to reassess if his usage genuinely grows, and the same investment paid back faster because nearly all of it offset real consumption instead of sitting unclaimed until year-end.