The country’s residential solar market has experienced tremendous growth over the past decade, driven by technological advancements, decreasing costs, and government incentives, particularly net-metering programs. However, some states have begun reassessing and modifying net-metering policies, creating major shockwaves across the industry.

In the face of this turbulent net-metering regulatory environment, solar installers need a few aces up their sleeves. Let’s explore this changing regulatory landscape, the potential impact on customer incentives, and the challenges and opportunities ahead. 

Evolving Net-Metering Regulations

A cornerstone of the residential solar industry, net metering allows homeowners to receive credits for excess energy produced by their solar panels fed back into the grid. Despite net metering’s vital role in making rooftop solar installations more affordable and widespread, several states are reevaluating these regulations for various reasons, including concerns about cost-shifting, grid reliability, and the changing dynamics of the energy market.

Although the recent passing of California’s NEM 3.0 has brought net metering into the national spotlight, North Carolina and Hawaii reduced rates paid to customers last year. Meanwhile, Florida and Colorado have considered changes, and Arizona currently has an open rulemaking on its net-metering rules. These states represent some of the largest markets for residential solar, and a reduction in rates paid to customers can significantly curb homeowners’ appetite for rooftop PV systems. 

As states modify their net-metering policies, the most common changes include lower compensation rates for excess energy, shorter contract terms, and reduced or eliminated incentives. This shift can extend the payback period for homeowners investing in photovoltaic (PV) systems, making it crucial for solar installers to adapt their business strategies.

Educate Customers on Offsetting Energy Rate Hikes

• Challenge: Changes to state net-metering 

• Opportunity: Educating customers on how rooftop PV systems can lock in energy costs in the face of increasing rates and the potential for more hikes in the future. 

Although Californian households already paid the sixth-highest price of electricity on average as of September 2023, one of the state’s largest ISOs, PG&E, started charging 13% more for power. The price jump — estimated to add $33 a month to household energy bills — aims to fund wildfire mitigation efforts, like burying power lines.

The move could benefit new solar customers and solar installers, who have struggled since NEM 3 went into effect. A recent analysis by a solar software company found that due to the rate hike in PG&E territory, new solar customers can still achieve a return on investment (ROI) on a reasonable timeline.

While PG&E’s rate hike still needs regulatory approval, home energy costs will only continue to increase over the years, and not just in PG&E territory. As energy costs keep rising, a rooftop PV system can still provide value for homeowners even as net-metering benefits dwindle or face disruption.

Pack More PV Power Per Roof

• Challenge: Older generations of PV modules using PERC cells simply can’t reach the power output and efficiency levels necessary to make up the difference created by reduced credits.

• Opportunity: Now more than ever, installers must embrace technological advancements to provide more power at lower costs and deliver more PV rooftop system value. 

The 435W Vertex S+ with up to 22% efficiency uses n-type TOPCon advanced technology for a compact module design, giving installers greater flexibility to pack more power per roof than p-type modules. Higher power and efficiency lowers balance of system (BOS) costs, makes installations easier, and, depending on the roof, can generate enough energy to offset changes in net-metering policies. 

Give Your Customers More Peace of Mind

• Challenge: Homeowners face constant uncertainty and remain skeptical of long-term guarantees. 

• Opportunity: Provide industry-leading 25/25 warranties from a company with a proven history of bankability. 

With shifting net-metering rules, volatile energy costs, an outdated and vulnerable grid, and the growing popularity of electric vehicles (EVs), homeowners are looking for more long-term energy stability than ever before. While many solar companies offer extended warranties, recent market disruptions have underscored that installers need more than a piece of paper to offer homeowners.

Not only do all Vertex S+ modules sold in the U.S. come with a 25-year power and 25-year performance warranty, but installers can give customers additional peace of mind with the knowledge that Trina Solar has a proven 27-year history. Trina’s strong record of both financial bankability and product bankability translates to long-term stability. 

Diversify Energy Services

• Challenge: Dependence on traditional residential installations may limit revenue streams.

• Opportunity: Solar installers can diversify their services by exploring energy storage solutions and emerging technologies like solar-powered heating and electric vehicle (EV) charging stations.

Although sometimes it can be difficult working outside one’s usual wheelhouse, installers seeking new avenues for growth can leverage home electrification and the innovative solutions supporting this transition.

For example, solar customers can save more money with a battery solution. By generating and storing energy during the day, homeowners can use their own power during peak periods, like the evening, instead of paying higher peak period rates.

Looking for more residential solar opportunities? Find out where to buy Trina Solar Vertex S+ here!