Net metering vs. net billing: how export credits change payback
Updated October 12, 2026 · By RoofPayback editorial · Reviewed by Automated fact and quality checks
Short answer
The credit you get for power you send back to the grid can change your payback as much as the sunshine does. In our example home, Texas pays back in 12.5 years with full net metering, 17 years if exports earn half the retail rate, and 20.5 years at a quarter of retail. California goes from 5.8 to 7.6 to 9.7 years. Before you compare quotes, find out exactly how your utility credits exports.
Two ways utilities pay for your extra power
Solar panels make the most power around midday, when many homes use the least. The surplus flows to the grid, and your utility credits it in one of two broad ways:
- Net metering (1:1). Each exported kWh offsets a kWh you buy later, so it is worth the full retail price. Credits usually roll over month to month and settle once a year at a "true-up".
- Net billing. Exports earn a lower rate — often a fraction of retail, sometimes tied to the utility's avoided cost — while the power you buy is still charged at full price.
Rules differ by state and by utility, and several have moved from net metering to net billing for new customers. The DSIRE database lists current programs by state; your utility's tariff page has the final word.
What we modeled
To isolate the effect of the export credit, we kept everything else fixed: a 7 kW system at $3000/kW ($21000), a home using 10500 kWh/yr with 40% of it during daylight, electricity prices rising 2.5%/yr, no incentives, and credits capped at a year of grid purchases. Only the value of an exported kWh changes: full retail, half, or a quarter. Production is from PVWatts and prices are EIA July 2026 averages. Try your own case in the solar calculator, which has the same three options.
Payback under each credit, by state
| State | Price | Full credit | Half credit | Quarter credit |
|---|---|---|---|---|
| Hawaii | 48¢/kWh | 4.1 years | 5.5 years | 7.1 years |
| California | 33.61¢/kWh | 5.8 years | 7.6 years | 9.7 years |
| Massachusetts | 30.49¢/kWh | 7.3 years | 9.8 years | 11.8 years |
| New York | 29.9¢/kWh | 7.5 years | 10.1 years | 12.1 years |
| New Jersey | 25.19¢/kWh | 8.8 years | 11.7 years | 14.1 years |
| Illinois | 19.22¢/kWh | 11.3 years | 15 years | 17.9 years |
| Colorado | 17¢/kWh | 10.9 years | 14.8 years | 18.5 years |
| Arizona | 15.38¢/kWh | 12 years | 15.2 years | 19.4 years |
| Florida | 15.03¢/kWh | 12.3 years | 16.9 years | 20.8 years |
| Texas | 15.88¢/kWh | 12.5 years | 17 years | 20.5 years |
| Nevada | 12.77¢/kWh | 14.1 years | 18 years | 22.8 years |
| Louisiana | 12.72¢/kWh | 14.8 years | 20.2 years | 24.4 years |
| Washington | 14.71¢/kWh | 17.2 years | 21.8 years | 25 years |
The full list for every state is on the state rankings page, and each state page shows the same three scenarios.
Why the drop hits cheap-power states harder
Moving from full to quarter credit adds 9.6 years in Louisiana but only 3 years in Hawaii. Two things drive the difference:
- Low prices leave little margin. When a kWh is worth 12.72¢, losing three quarters of the credit on exports removes most of the value of those kWh, and the remaining savings come slowly.
- High prices keep self-used power valuable. In Hawaii, every kWh you use directly still saves 48¢, so even a weak export credit leaves a short payback.
In our data, only California and Hawaii stay under ten years with a quarter-retail credit. In 27 states the payback reaches 20 years or more at that rate.
How to protect your payback under net billing
If your utility pays less than retail for exports, the goal shifts from "make as much power as possible" to "use as much of it as possible yourself":
- Size for your daytime use, not for 100% of your annual bill. See how many solar panels you need.
- Move flexible loads to midday: laundry, dishwasher, water heating, EV charging.
- Ask installers to model your actual tariff. A quote that assumes full net metering in a net-billing area overstates savings.
- Check how long current rules are locked in. Some programs keep existing customers on their original terms for a set period; your utility can confirm.
Batteries can also raise self-use, but they add cost; whether they pay off depends on your rates and is a separate calculation.
Bottom line
Full net metering is the best case, and not every home gets it. When you compare quotes, ask what your utility will pay for exported power, then run the matching scenario in the calculator. In high-price states, solar stays attractive even with weak export credits; in low-price states, the export rule can decide whether the system pays back at all. For the bigger picture after the federal credit ended, read is solar still worth it without the tax credit.