What solar energy is, and how it lowers your bill
Solar energy is the energy in sunlight. Solar panels turn it straight into electricity, with no fuel and no moving parts. On a rooftop system, your home uses that electricity first, sends any surplus to the grid, and the meter keeps count of both.
Updated 27 September 2026
From sunlight to the socket
A rooftop solar system has three main parts:
- Panels on the roof turn sunlight into direct current (DC) electricity. More sunlight means more power, which is why panels in Punjab face south and are kept free of shade.
- The inverter turns that DC into alternating current (AC) at the same voltage and frequency as the grid, so your fans, fridge and AC can use it.
- The meter records what flows between your home and the grid.
Hybrid and off-grid systems add batteries, which store power for later. On-grid, off-grid and hybrid compares the three.
Where the power goes during the day
Solar power goes to whatever is running in the house first, before anything is drawn from the grid. Nothing needs switching over; it happens on its own.
- When the panels make less than the house is using, the grid supplies the rest.
- When they make more, the surplus flows out through your meter onto PSPCL’s grid, where your neighbours use it.
- At night, the panels make nothing and the house draws from the grid.
Giving power back to the grid
Sending surplus to the grid is what people mean by giving power back to the government. It happens automatically on an on-grid or hybrid system connected under net metering. PSPCL replaces your old meter with a bi-directional net meter, which counts units in both directions: imported from the grid, and exported to it.
How the bill gets adjusted
At billing time, PSPCL looks at both totals. The units you exported are set against the units you imported, under the net metering rules set by PSERC, and you are billed on what remains.
Two points matter here:
- A unit you export is generally worth less than a unit you use yourself. Using solar power as it is made, for example by running the washing machine or the AC in the afternoon, saves the most.
- Solar lowers the units you are billed for. Fixed charges on the bill remain, because you are still connected to the grid.
How net metering works in Punjab covers the settlement in more detail, and how to read your solar meter and bill shows how to check the numbers yourself.
Why it pays in Punjab
Punjab has long, bright days for much of the year, and a general-category home that goes over the 300 free units a month pays for every unit it uses. A rooftop system sized to your bill can bring the units you pay for down, and the PM Surya Ghar subsidy covers part of the cost for homes; see the subsidy in Punjab. Whether it pays for your home depends on your use, which is why solar with 300 free units is worth reading first.
The solar calculator works out a size, a price and the subsidy from your bill.
Questions we are asked
How do solar panels make electricity?
Each panel is made of cells, mostly of silicon. When sunlight falls on a cell, it frees electrons in the silicon, and the cell's structure pushes them in one direction as a current. That current is direct current, which an inverter turns into the alternating current your home uses.
Can I sell solar power back to the government?
With net metering, the surplus your system sends to the grid is credited against the units you draw from PSPCL, under PSERC's rules. It is set against your bill, and export is generally worth less than the units you use yourself.
Does solar work on cloudy days?
Yes, at reduced output. Panels still make power in diffuse light, but a thick cloudy or foggy day can bring output well down. On an on-grid system, the grid simply supplies the difference.