What Is a Solar True-Up and How Does It Work?

A solar true-up is a financial reconciliation process for individuals or businesses using solar energy systems. This adjustment ensures accurate accounting of electricity generated by a solar array versus electricity consumed from the utility grid over a specified timeframe. It balances energy accounts, preventing overcharging or undercharging for electricity services.

What Solar True-Up Means

Solar true-up refers to the annual or periodic settlement of a solar customer’s electricity account with their utility company. Its purpose is to reconcile the difference between the total electricity a solar system has generated and sent to the grid, and the total electricity the customer has drawn from the grid over a billing cycle. This process is necessary because solar production and consumer electricity needs fluctuate.

This reconciliation is made possible through net metering. Net metering allows solar customers to receive credits for surplus electricity their panels generate and export back to the grid. These credits offset the cost of electricity drawn from the grid when the solar system is not producing enough power. The true-up process tallies these ongoing credits and debits over a longer period, typically an entire year, to determine the final financial outcome.

Net metering policies allow the utility meter to effectively bank energy credits when excess solar power is fed into the grid. These banked credits reduce the amount of electricity the customer would otherwise purchase. Conversely, when consumption exceeds solar production, power is drawn from the grid, recorded as a debit. The true-up aggregates these monthly net readings into a comprehensive annual summary.

How Solar True-Up Works

A solar true-up involves tracking energy flows between a solar-equipped property and the utility grid over an extended period. While customers typically receive monthly bills, the true-up occurs less frequently, often annually. This annual period allows for a comprehensive assessment of a full year’s worth of solar generation and consumption, smoothing out seasonal variations.

When a solar system generates more electricity than the property consumes, the excess power is exported to the grid, and the customer accrues net metering credits. These credits are applied to offset future electricity consumption. Conversely, when the property’s electricity consumption exceeds its solar production, power is drawn from the grid, and this usage is recorded as a debit against any accumulated credits.

At the end of the designated true-up period, the utility calculates all accumulated energy credits and debits. If the customer has generated more electricity than they consumed, they will have a net surplus of energy credits. In many jurisdictions, these remaining credits may be “banked” for future true-up periods, or the utility might compensate the customer for this excess generation. Compensation for excess generation is often at a lower “avoided-cost” or wholesale rate.

If the customer has consumed more electricity from the grid than their solar system has generated, they will have a net deficit. This deficit results in a final charge on their true-up bill for the net electricity purchased from the utility. The true-up serves as the final settlement, ensuring the customer pays only for the net electricity consumed from the grid, or receives appropriate credit for the net electricity provided to it, over the entire reconciliation cycle.

Understanding Your Solar True-Up Bill

A solar true-up bill summarizes a full year of energy transactions. Unlike monthly utility statements, the true-up bill provides a comprehensive summary of total electricity generated, total electricity consumed, and the net energy balance over the entire true-up period, typically 12 months.

A typical true-up statement indicates the start and end dates of the reconciliation period. It itemizes the total kilowatt-hours (kWh) of electricity imported from the grid and the total kWh of electricity exported to the grid by the solar system. The bill then shows the accumulated net energy credits or debits, representing the difference between exported and imported energy over the entire year.

Based on this net energy balance, the true-up bill will present one of several outcomes. If a customer has a net credit balance, the bill might indicate a payout for the excess generation, usually at a wholesale rate, or show that the credits are rolled over to the next true-up period. If a customer has a net debit balance, the bill will show a final charge for the net electricity purchased from the utility. Some bills might also show a zero balance, indicating that generation and consumption were matched.