Net Metering
Definition
A billing arrangement where solar panel owners receive credit for excess electricity they send back to the grid. A key selling point when working aged solar leads — it determines the homeowner's actual savings.
Understanding Net Metering
Net metering is an energy billing arrangement where solar panel owners receive credit from their utility company for excess electricity their system generates and sends back to the grid. When your solar panels produce more electricity than your home uses during the day, the surplus flows to the grid and your meter literally runs backward. At night or on cloudy days when your panels produce less than you need, you draw from the grid and use those credits. At the end of the billing period, you pay only for the net energy consumed — the difference between what you used and what you generated.
How It Works in Practice
Net metering policies vary significantly by state and utility. In strong net metering states (California until NEM 3.0, New Jersey, Massachusetts), credits are valued at the full retail electricity rate — $0.15-0.35 per kilowatt-hour. This means every excess kilowatt your system produces saves you the full retail price. In weaker net metering states, credits may be valued at the wholesale or avoided-cost rate — $0.03-0.08 per kWh — making solar less financially attractive. Some states have eliminated net metering entirely or transitioned to net billing, where exported energy is compensated at a lower rate.
For solar sales, net metering policy is the single biggest factor in the financial pitch. In strong net metering markets, a homeowner with a $200 monthly electric bill can often reduce it to $0-20 with a properly sized solar system. In weak or no net metering markets, the savings are more modest — 40-60% reduction rather than 80-100%.
Why It Matters for Aged Leads
When working aged solar leads, understanding the local net metering policy is essential for a credible conversation. Prospects who inquired months ago may have received confusing or outdated information about savings potential. Providing clear, accurate net metering details for their specific utility builds trust and differentiates you from the aggressive solar salespeople who oversold the savings. Ask which utility serves their home, look up the current net metering policy, and present realistic savings projections. Honesty about what net metering delivers in their area — even if the news is less exciting than they hoped — creates the trust that closes deals.
Related Terms
ROI (Return on Investment)
A measure of profitability calculated as (Revenue - Cost) / Cost × 100. For aged leads, ROI is typically higher than real-time leads because the dramatically lower cost per lead outweighs the lower conversion rate.
CAC (Customer Acquisition Cost)
The total cost of acquiring a new customer, including lead costs, sales time, marketing expenses, and overhead. Aged leads significantly reduce CAC compared to real-time lead strategies.
LTV (Lifetime Value)
The total revenue a customer generates over the entire business relationship. In insurance, LTV includes renewals and cross-sells. High-LTV products (IUL, Medicare) justify higher lead acquisition costs.
Solar ITC
The Solar Investment Tax Credit — a federal tax credit for installing solar energy systems. Currently 30% of installation costs. A primary motivator for homeowners and a key hook when calling aged solar leads.
Power Purchase Agreement (PPA)
A financing arrangement where a solar company installs panels at no upfront cost, and the homeowner buys the electricity at a fixed rate. Lowers the barrier to entry for solar prospects.
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