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                                                                    EXHIBIT 10.3

                FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT

      This Amendment, dated as of December 8, 2004, is made by and between
POWERSECURE, INC., a Delaware corporation (the "Borrower"), and WELLS FARGO
BUSINESS CREDIT, INC., a Minnesota corporation (the "Lender").

                                    RECITALS

      The Borrower and the Lender are parties to a Credit and Security Agreement
dated as of September 24, 2003 (the "Credit Agreement"). Capitalized terms used
in these recitals have the meanings given to them in the Credit Agreement unless
otherwise specified.

      The Borrower has requested that certain amendments be made to the Credit
Agreement, which the Lender is willing to make pursuant to the terms and
conditions set forth herein.

      NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:

      1. Defined Terms. Capitalized terms used in this Amendment which are
defined in the Credit Agreement shall have the same meanings as defined therein,
unless otherwise defined herein. In addition, Section 1.1 of the Credit
Agreement is amended by adding or amending, as the case may be, the following
definitions:

      "Maximum Line" means $3,260,000 unless said amount is reduced pursuant to
Section 2.12, in which event it means such lower amount.

      2. Exhibit A. Exhibit A of the Credit Agreement is amended and restated in
its entirety and replaced with Exhibit A attached hereto.

      3. No Other Changes. Except as explicitly amended by this Amendment, all
of the terms and conditions of the Credit Agreement shall remain in full force
and effect and shall apply to any advance or letter of credit thereunder.

      4. Conditions Precedent. This Amendment shall be effective when the Lender
shall have received an executed original hereof, together with each of the
following, each in substance and form acceptable to the Lender in its sole
discretion:

            (a) The Revolving Note, properly executed by the Borrower.

            (b) The Acknowledgment and Agreement of Guarantors and the
Acknowledgment and Agreement of Subordinated Creditor set forth at the end of
this Amendment, duly executed by each Guarantor and Subordinated Creditor.

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            (c) Such other matters as the Lender may require.

      5. Representations and Warranties. The Borrower hereby represents and
warrants to the Lender as follows:

            (a) The Borrower has all requisite power and authority to execute
this Amendment and the Revolving Note and to perform all of its obligations
thereunder, and this Amendment and the Revolving Note have been duly executed
and delivered by the Borrower and constitute the legal, valid and binding
obligations of the Borrower, enforceable in accordance with their terms.

            (b) The execution, delivery and performance by the Borrower of this
Amendment and the Revolving Note has been duly authorized by all necessary
corporate action and does not (i) require any authorization, consent or approval
by any governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) violate any provision of any law,
rule or regulation or of any order, writ, injunction or decree presently in
effect, having applicability to the Borrower, or the articles of incorporation
or by-laws of the Borrower, or (iii) result in a breach of or constitute a
default under any indenture or loan or credit agreement or any other agreement,
lease or instrument to which the Borrower is a party or by which it or its
properties may be bound or affected.

            (c) All of the representations and warranties contained in Article V
of the Credit Agreement are correct on and as of the date hereof as though made
on and as of such date, except to the extent that such representations and
warranties relate solely to an earlier date.

      6. References. All references in the Credit Agreement to "this Agreement"
shall be deemed to refer to the Credit Agreement as amended hereby; and any and
all references in the Security Documents to the Credit Agreement shall be deemed
to refer to the Credit Agreement as amended hereby.

      7. No Waiver. The execution of this Amendment and acceptance of any
documents related hereto shall not be deemed to be a waiver of any Default or
Event of Default under the Credit Agreement or breach, default or event of
default under any Security Document or other document held by the Lender,
whether or not known to the Lender and whether or not existing on the date of
this Amendment.

      8. Release. The Borrower, and each Guarantor by signing the Acknowledgment
and Agreement of Guarantors set forth below, and the Subordinated Creditor by
signing the Acknowledgment and Agreement of Subordinated Creditor set forth
below, each hereby absolutely and unconditionally releases and forever
discharges the Lender, and any and all participants, parent corporations,
subsidiary corporations, affiliated corporations, insurers, indemnitors,
successors and assigns thereof, together with all of the present and former
directors, officers, agents and employees of any of the foregoing, from any and
all claims, demands or causes of action of any kind, nature or description,
whether arising in law or equity or upon

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contract or tort or under any state or federal law or otherwise, which the
Borrower or such Guarantor or such Subordinated Creditor has had, now has or has
made claim to have against any such person for or by reason of any act,
omission, matter, cause or thing whatsoever arising from the beginning of time
to and including the date of this Amendment, whether such claims, demands and
causes of action are matured or unmatured or known or unknown.

      9. Costs and Expenses. The Borrower hereby reaffirms its agreement under
the Credit Agreement to pay or reimburse the Lender on demand for all costs and
expenses incurred by the Lender in connection with the Loan Documents, including
without limitation all reasonable fees and disbursements of legal counsel.
Without limiting the generality of the foregoing, the Borrower specifically
agrees to pay all fees and disbursements of counsel to the Lender for the
services performed by such counsel in connection with the preparation of this
Amendment and the documents and instruments incidental hereto. The Borrower
hereby agrees that the Lender may, at any time or from time to time in its sole
discretion and without further authorization by the Borrower, make a loan to the
Borrower under the Credit Agreement, or apply the proceeds of any loan, for the
purpose of paying any such fees, disbursements, costs and expenses.

      10. Miscellaneous. This Amendment and the Acknowledgment and Agreement of
Guarantors and the Acknowledgment and Agreement of Subordinated Creditor may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed an original and all of which counterparts, taken
together, shall constitute one and the same instrument.

      IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.

WELLS FARGO BUSINESS CREDIT, INC.               POWERSECURE, INC.

By:   /s/ Patti Scudder                         By:   /s/ Gary J. Zuiderveen
      --------------------------                      --------------------------
Name: Patti Scudder                             Name: Gary J. Zuiderveen
Its:  Commercial Banking Officer                Its:  Secretary

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                                      Exhibit A to Credit and Security Agreement

                       AMENDED AND RESTATED REVOLVING NOTE

$3,260,000                                                     Denver, Colorado
                                                               December 8, 2004

      For value received, the undersigned, POWERSECURE, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay on the Termination Date
under the Credit Agreement (defined below), to the order of WELLS FARGO BUSINESS
CREDIT, INC., a Minnesota corporation (the "Lender"), at its main office in
Denver, Colorado, or at any other place designated at any time by the holder
hereof, in lawful money of the United States of America and in immediately
available funds, the principal sum of Three Million Two Hundred Sixty Thousand
Dollars ($3,260,000) or, if less, the aggregate unpaid principal amount of all
Revolving Advances made by the Lender to the Borrower under the Credit Agreement
(defined below) together with interest on the principal amount hereunder
remaining unpaid from time to time, computed on the basis of the actual number
of days elapsed and a 360-day year, from the date hereof until this Note is
fully paid at the rate from time to time in effect under the Credit and Security
Agreement dated as of September 24, 2003 (as amended, supplemented or restated
from time to time, the "Credit Agreement") by and between the Lender and the
Borrower. The principal hereof and interest accruing thereon shall be due and
payable as provided in the Credit Agreement. This Note may be prepaid only in
accordance with the Credit Agreement.

      This Note has been executed and delivered in substitution for and not in
repayment of the Revolving Note of the Borrower dated September 24, 2003, and is
issued pursuant, and is subject, to the Credit Agreement, which provides, among
other things, for acceleration hereof. This Note is the Revolving Note referred
to in the Credit Agreement. This Note is secured, among other things, pursuant
to the Credit Agreement and the Security Documents as therein defined, and may
now or hereafter be secured by one or more other security agreements, mortgages,
deeds of trust, assignments or other instruments or agreements.

      The Borrower shall pay all costs of collection, including reasonable
attorneys' fees and legal expenses if this Note is not paid when due, whether or
not legal proceedings are commenced.

      Presentment or other demand for payment, notice of dishonor and protest
are expressly waived.

                                                POWERSECURE, INC.

                                                By: ____________________________
                                                    Gary J. Zuiderveen
                                                    Secretary

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                   ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS

      The undersigned, each a guarantor of the indebtedness of PowerSecure, Inc.
(the "Borrower") to Wells Fargo Business Credit, Inc. (the "Lender") pursuant to
a separate Guaranty dated as of September 24, 2003, (the "Guaranty"), each
hereby (i) acknowledges receipt of the foregoing Amendment; (ii) consents to the
terms (including without limitation the release set forth in Paragraph 8 of the
Amendment) and execution thereof; (iii) reaffirms its obligations to the Lender
pursuant to the terms of its Guaranty; and (iv) acknowledges that the Lender may
amend, restate, extend, renew or otherwise modify the Credit Agreement and any
indebtedness or agreement of the Borrower, or enter into any agreement or extend
additional or other credit accommodations, without notifying or obtaining the
consent of the undersigned and without impairing the liability of the
undersigned under its Guaranty for all of the Borrower's present and future
indebtedness to the Lender.

METRETEK CONTRACT MANUFACTURING                 METRETEK TECHNOLOGIES, INC.
COMPANY, INC.

By:   /s/ Gary J. Zuiderveen                    By:   /s/ Gary J. Zuiderveen
      ------------------------                        --------------------------
Name: Gary J. Zuiderveen                        Name: Gary J. Zuiderveen
Its:  Secretary                                 Its:  Secretary

SOUTHERN FLOW COMPANIES, INC.                   METRETEK, INCORPORATED

By:   /s/ Gary J. Zuiderveen                    By:   /s/ Gary J. Zuiderveen
      ------------------------                        --------------------------
Name: Gary J. Zuiderveen                        Name: Gary J. Zuiderveen
Its:  Secretary                                 Its:  Secretary

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              ACKNOWLEDGMENT AND AGREEMENT OF SUBORDINATED CREDITOR

      The undersigned, a subordinated creditor of PowerSecure, Inc. (the
"Borrower") to Wells Fargo Business Credit, Inc. (the "Lender") pursuant to a
Subordination Agreement dated as of September 24, 2003 (the "Subordination
Agreement"), hereby (i) acknowledges receipt of the foregoing Amendment; (ii)
consents to the terms (including without limitation the release set forth in
Paragraph 8 of the Amendment) and execution thereof; (iii) reaffirms its
obligations to the Lender pursuant to the terms of its Subordination Agreement;
and (iv) acknowledges that the Lender may amend, restate, extend, renew or
otherwise modify the Loan Documents and any indebtedness or agreement of the
Borrower, or enter into any agreement or extend additional or other credit
accommodations, without notifying or obtaining the consent of the undersigned
and without impairing the obligations of the undersigned under its Subordination
Agreement.

                                                METRETEK TECHNOLOGIES, INC.

                                                By:   /s/ Gary J. Zuiderveen
                                                      --------------------------
                                                Name: Gary J. Zuiderveen
                                                Its:  Secretary