These two terms get mixed up constantly — and confusing them is enough to make your savings estimate wrong by thousands of dollars over the life of a system. They're not two names for the same thing.
The core difference in one line
Net billing only pays you for the surplus left over after your own usage is subtracted — the power you consume yourself simply avoids a purchase, it's never separately compensated. Gross billing pays a set rate for every single unit your solar panels generate, full stop, while you separately buy back 100% of what your household actually uses at the normal retail rate. Two meters, two totals, no netting against each other.
Gross billing: Bill = (Total consumption × retail rate) − (Total generation × gross feed-in rate)
Why gross billing exists at all
Gross billing (sometimes called a gross feed-in tariff) was common in early solar-incentive programs, where the goal was to reward total clean generation regardless of when or how it was used. It made metering simpler — a second meter just counts everything the panels produce — and made the incentive easy to communicate: "you get paid X per unit, period." Some early UK Feed-in Tariff generation payments and various early state and utility programs elsewhere used this structure.
Why net billing (and net metering) largely replaced it
As feed-in tariffs stepped down over time, most programs shifted toward crediting only the actual surplus sent to the grid — either at close to retail rate (net metering) or at a lower, often wholesale-linked rate (net billing in the narrower sense). This aligns the incentive with what actually reduces grid strain: your own real-time self-consumption. Our companion guide on net metering vs. net billing breaks down that narrower distinction in detail.
Which one actually pays more?
There's no universal answer — it comes down to comparing the specific gross generation rate against your retail rate and your self-consumption share:
- High self-consumption + gross rate well below retail → net billing usually wins, since you're avoiding full-price purchases on most of your usage.
- Low self-consumption (e.g. a small home with an oversized system) + gross rate close to retail → gross billing can pay more, since every unit generated earns money regardless of when you use it.
- Gross rate above retail rate → gross billing almost always wins outright.
Run your own numbers with the Net Metering Calculator and the Solar Savings Calculator using the actual rate your utility or program quotes — don't assume either structure automatically favors you.
Questions to ask your utility or installer
- Is my export credit based on net surplus, or is every unit generated paid separately regardless of my own use?
- Is the rate fixed for a contract term, or can it change year to year?
- Does my meter separately record gross generation, or only the net flow to/from the grid?
Frequently asked questions
What is the difference between net billing and gross billing?
Net billing credits only the surplus you export after subtracting what you used yourself. Gross billing pays a set rate for every unit generated, while you separately buy back 100% of what you use at retail — two meters, no netting.
Is gross billing better than net billing?
It depends on the gross rate versus your retail rate. A gross rate near or above retail can pay more; a gross rate well below retail usually loses to net billing's effective savings on self-consumed power.
Which countries use gross billing?
It's shown up in parts of Germany's early EEG program, some Indian state utility schemes, and early UK Feed-in Tariff generation payments. Most current programs, including most US and UK schemes today, use net or export-only structures instead — confirm the specifics with your own utility.
Can I choose between net billing and gross billing?
Usually not — it's set by your utility or regulator for your connection type. Where a genuine choice exists, compare both using your real generation and consumption numbers before deciding.