Typical result:
Net metering, net billing and feed-in tariffs are three ways to get paid for solar power you send to the grid. They can differ by hundreds of dollars a year for the same panels. Policy in the U.S. is set state by state and often utility by utility, so the label on your plan matters less than the actual export rate.
This guide explains how each model works, what the main U.S. examples pay in 2026, how the UK compares, and how to size a system around the export rate you will really get.
Net metering treats the grid like a battery. When your panels produce more than your home uses, the surplus flows to the grid and your account is credited. When you draw power later, those credits offset what you owe, so you pay only the net difference.
In its fullest form, called full retail or 1:1 net metering, every exported kWh is credited at the same rate as every imported kWh. The EIA reported an average U.S. residential price of about 17.3 cents per kWh for 2025, so 300 kWh of exports in a month would be worth roughly $52 of bill credit at that average. Your actual rate depends on your utility and rate plan.
Not every state works this way. Some states have retail-style net metering with added fees or caps, and some have moved to net billing, where exports earn less than retail. For example, Hawaii stopped offering retail net metering to new customers in 2015. California moved new customers to net billing in 2023, discussed below. Florida investor-owned utilities credit exports on a kWh-for-kWh basis, with credits carried forward within the year; confirm the details with your own utility.
Year-end treatment of leftover credits also varies. Depending on the utility, unused credits may roll over, be paid out at a lower rate, or be forfeited. If your system consistently over-produces, check this rule before you size it with a solar savings calculator.
The savings calculator loads your state's average electricity rate, sun hours and net-metering rule. Then enter your own bill and installer quote.
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A feed-in tariff (FiT) pays a fixed rate per kWh of solar electricity under a contract or regulation. The rate is not linked to what you pay to import power. Because the two prices are decoupled, a high FiT can reward exporting, while a low one rewards using your own solar power at home.
True feed-in tariffs are uncommon in the United States, where most homeowners are on net metering or net billing. They were most influential in Europe. The UK’s original Feed-in Tariff opened in 2010 and closed to new applicants on March 31, 2019. Contracts ran for 20 or 25 years (25 for solar PV), so early adopters are still paid today. Those payments were mainly based on generation, not just exports, so they are not directly comparable to a modern export rate.
The UK’s replacement, the Smart Export Guarantee (SEG), began on January 1, 2020. Licensed suppliers must offer an export tariff, but they set the rate. In 2026, rates range from about 3p per kWh to roughly 15p per kWh for tariffs open to most people, and higher figures are advertised only for tariffs that require a battery, a time-of-use plan or installation by that supplier. Rates change often, so check a current comparison such as Which? or Ofgem’s SEG supplier list.
The two charts below use published figures and a simple, transparent model, so you can see how much the export rate matters.
Chart summary: Under California’s older net metering, an exported kWh earned roughly the retail rate, about 30 cents. Under NEM 3.0, the average export credit is roughly 5–8 cents, about 75% lower, even though grid electricity still costs several times more. The U.S. average retail price of 17.3 cents sits between the two. This gap is why storage and self-consumption matter more under net billing.
Now apply those rates to a sample home. Assume a 7 kW system producing 9,800 kWh per year, with 40% used on site and 60% (5,880 kWh) exported.
Chart summary: At a 13-cent export credit, the 5,880 exported kWh are worth about $764 per year, or about $19,110 over 25 years. At 5 cents, they are worth about $294 per year, or $7,350. The difference is about $470 per year, or $11,760 over 25 years in today’s dollars. Real results will differ with your usage, rate plan, system size and local rules, so use a solar payback period calculator with your own export rate. For more state detail, see our guide to Solar Panel Payback Period by State.
California’s change shows how fast economics can shift. Industry groups estimated that NEM 3.0 would cut the value of exports by about 75%, and many installers now design California systems around a battery. A battery lets you store midday solar and use it in the evening, when grid power is most expensive, instead of exporting it at a low rate.
| Net metering | Net billing | Feed-in tariff | |
|---|---|---|---|
| Export rate | At or near retail | Lower, often wholesale-based and time-varying | Fixed by contract or regulation |
| Tied to your import price? | Yes | No | No |
| Where common | Many U.S. states, with caps, fees or changes in some | California (since 2023) and several other states | Rare in the U.S.; UK FiT closed in 2019 |
| Best strategy | Size to your annual use; exports are valued | Maximize self-consumption; consider a battery | Depends on whether the rate beats retail |
The key structural difference is how the export rate is set. Under net metering, it follows your retail rate, so when your utility raises prices, your credits rise too. Under a fixed feed-in tariff, the rate stays as contracted, which is a strength if it is high and a drawback if it is low.
Rate design also changes behavior. When exports pay less than imports cost, shifting laundry, dishwashing and EV charging into daylight hours raises your savings. Many utilities also use time-of-use rates that pay more for exports at peak hours. A time-of-use savings calculator can show how your schedule interacts with your rate plan.
Per exported kWh, retail-rate net metering generally pays the most, because it credits exports at what you pay for power. Net billing and most feed-in tariffs pay less, so the best design under those programs is a system sized to your daytime use, plus storage where the economics work.
Policy risk is real. Regulators and utilities in many states have studied or changed export compensation in recent years, and the NC Clean Energy Technology Center’s 50 States of Solar reports track these actions each quarter. Avoid assuming today’s rate will last for the system’s full life. Legacy rules often protect existing customers for a set period, as California does for pre-April 2023 systems for 20 years from permission to operate.
Incentives have also changed. The 30% federal Residential Clean Energy Credit (Section 25D) ended for homeowner-owned systems after December 31, 2025, so a cash or loan purchase in 2026 has no federal homeowner credit. Some state, local and utility incentives remain, and third-party-owned systems may be treated differently. Because of this, payback estimates built on the old 30% credit are out of date. Run your numbers with a solar net metering calculator and ask installers for written quotes that state the export rate and incentives they assume.
Policies and rates change often. This guide is general information, not tax, legal or financial advice; confirm current rules with your utility and a qualified professional.
Direct answers for US homeowners — sized for a $150/month electric bill.
System size and payback vary by electricity rate and sun hours — see your state.
Electricity rates and incentives vary — see data for your state.
Estimates only — not tax, legal or financial advice. Get at least three installer quotes and confirm incentives with your utility and a tax professional.