What Is a True-Up Bill for Solar?
Understand how solar true-up bills reconcile your annual energy generation and consumption with the utility.
A true-up bill for solar customers represents an annual reconciliation of energy generated by a solar system against energy consumed from the utility grid. Its purpose is to balance accounts between the solar homeowner and the utility, determining final charges or credits. This process is an integral part of net metering, which governs how solar energy is credited and billed.
How Net Metering Works
Net metering is a billing mechanism that allows homeowners with solar panels to receive credits for excess electricity their system generates and sends back to the grid. When solar panels produce more electricity than a home needs, the surplus energy flows into the utility grid, accumulating credits. Conversely, when solar generation is insufficient, such as at night or on cloudy days, the home draws electricity from the grid, and these banked credits offset consumption. This system ensures every kilowatt-hour (kWh) of energy produced by a homeowner’s solar panels can reduce their utility bills.
Monthly utility bills reflect this continuous exchange, showing current charges, accumulated credits, and any fixed fees. These statements provide a snapshot of usage and production, allowing customers to track their progress toward the annual true-up. The homeowner is billed only for their “net” energy usage, which is the difference between energy consumed and energy produced over a billing cycle.
Components of the True-Up Calculation
The true-up bill consolidates all energy charges and credits accumulated over the annual billing cycle. The utility company compares total energy imported from the grid against total energy exported by the solar system during this period. This comparison determines whether the customer was a net consumer, owing money, or a net generator, potentially receiving credits.
Any accumulated excess credits are treated according to specific utility policies. Some programs allow credits to roll over to the next billing cycle, while others may pay out excess credits at a lower wholesale rate or cause them to expire. If a homeowner consumed more energy from the grid than their solar system generated, they will be billed for this net consumption at standard retail rates.
True-up bills also include fixed charges and minimum bills independent of solar generation. These can include basic service, connection, or meter charges. Different utility tariff structures, such as time-of-use (TOU) rates, can significantly impact the calculation. Under TOU rates, the value of energy consumed or exported varies depending on the time of day and season, with peak-hour energy costing more.
Strategies for Solar Bill Management
Effectively managing a solar bill involves proactively monitoring energy usage and production throughout the year. Regular review of monthly utility statements provides insight into current charges, credits, and year-to-date progress toward the true-up. This allows homeowners to identify trends and adjust energy consumption habits.
Optimizing energy consumption means aligning household activities with periods of high solar production. Running major appliances during peak sunlight hours can maximize the use of self-generated electricity and reduce reliance on grid power. This strategy helps lower the amount of energy drawn from the grid, directly impacting the true-up balance.
Understanding the utility’s rate plan is beneficial, especially for those on time-of-use tariffs. Knowing when electricity rates are highest can guide energy usage decisions, such as delaying non-essential consumption to off-peak hours. Properly sized solar systems, designed to match a household’s annual energy needs, contribute to favorable true-up outcomes.