The paper studies the background noise characteristics of a typical indoor power line (PL) in India. The noise decreases rapidly with frequency and can be considered as white beyond 5 MHz. The time variation of the background noise at every frequency in the non‐white region is modeled and compared in different environments which include laboratory and factory setups. In all cases, the background noise can be modeled by density functions related to multipath fading i.e. Nakagami‐m, Rayleigh and Rician. Fading is worse than the Rayleigh fading when the PL network has more connected loads and impedance discontinuities. Single frequency noise shows Rician fading when the background noise is narrowband Gaussian. The results are compared with those obtained in other countries in an attempt to check the validity of the model worldwide. A PL channel noise simulator is developed using the density functions to simulate the background noise. A technique is proposed that adapts the carrier frequency according to the channel property at a particular instant. The performance of such a system is tested in a simulated environment and shows that the method enables transmission of signals at very low transmission power compared with that in the AWGN channel. Copyright © 2009 John Wiley & Sons, Ltd.