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Home>Consumer Guide>Understanding Your True-Up Statement

Understanding Your True-Up Statement

The True-Up Statement can sometimes be confusing to new solar owners. This article is intended to help answer common questions many new solar users have.

What is the True-Up Statement?

After you go solar, you will see some changes to your utility bill. You will continue to get a monthly statement from your utility. In addition, you will also receive a “True-Up Statement” from the utility on the anniversary of the date the utility switched on your solar system.

The “True Up” Statement includes a summary of your net electricity use over the previous 12-month period, and either a credit or a balance to pay. 

How your solar system works

The electricity that your solar panels make goes directly to power the appliances in your home. 

Sometimes your home uses more electricity than your panels make. When that happens, you pull electricity from the grid. 

Sometimes your panels make more electricity than your home needs. When that happens, that extra solar energy flows to your neighbors.  

Solar users who have a battery do not send much extra energy to their neighbors. Instead, most of your extra solar will go into the battery for your home to use later when the sun isn’t shining.  

What happens when you send your extra solar energy to your neighbors

  • Whenever you share your extra solar energy with your neighbor, the utility gives you a credit on your account. 
  • These credits are “banked” and applied against what you would pay your utility for the energy you draw from the grid.
  • The amount of credit you get for that extra solar energy depends on your utility and when you got solar.
  • Customers of PG&E, SDG&E, and Edison who got solar before April 2023 (called NEM1 or NEM2) get a credit roughly equal to the utility’s electricity rate.
  • However, those who went solar after April 2023 (called the Solar Billing Plan) will see a much smaller credit.
  • This may be different for customers of local publicly run utilities.

When your home uses more electricity than your panels make

  • During less sunny times of year, and anytime the sun isn’t shining, you likely consume some electricity from the grid.
  • When that happens, the utility will charge you for that electricity. The utility will apply any credits you have from the excess solar you shared, which will reduce how much you owe the utility.

What this looks like on your monthly utility statement

Your monthly utility statement will include the following:

  • Monthly charges for grid usage and connection fees.
  • The amount of energy you pulled from the grid and how much that cost.
  • The amount of energy you shared with your neighbors and how much you got credited for it. 
  • Whether you owe the utility any money, or if the utility owes you a credit.
  • All credits are rolled over to the following month and applied to any future charges.

Most solar owners who got their solar before April 2023 (NEM1 and NEM2) can defer paying any balance until True-Up. Our advice: don’t wait until True-Up. Just pay anything you owe every month. 

Those who got solar after April 2023 (Solar Billing Plan) must pay any balance monthly.

What this looks like on your annual True-Up statement if you're on NEM1 or NEM2

The True-Up statement is what the utility sends solar users on the anniversary of the date your solar system turned on. It summarizes all of your credit and charges over that 12-month period.

  • If you pulled more electricity from the grid than your panels made, then you will owe the utility money.
  • If the opposite is true, you will receive a small credit on your True-Up bill. The credit will be between 2 to 4 cents per kilowatt-hour (kWh) for any leftover energy.
  • At True-Up, all of your credits are cashed out and you start over again. No credits roll over to the following year. 

How the True-Up Statement is different for those who went solar after April 2023

For those who got solar after April 2023 (Solar Billing Plan), the above is still true. However, the utility takes some additional steps to calculate your True-Up statement:

  • At True-Up, the utility calculates the amount of kWh you exported above and beyond the amount of kWh you imported. 
  • They then claw back the credits you got for those kWh. For example, if you shared 500 kWh of your solar but only bought 400 kWh with the utility, then the utility will claw back any credits they gave you for the extra 100 kWh in the prior 12 months
  • You would think that the utility would simply calculate the clawback using the same rate they originally credited you. Instead, the utility applies a rate that is the average credit they applied to all solar users in the utility service territory over last 12 months.
  • Often, that rate is higher than the credit you got for those kWh. The reason why is that many solar users have batteries with active management systems that target their exports to the high value hours in August and September. That pulls up the average across all customers. 

This, of course, is ridiculous. The whole idea of the clawback is counterproductive. But this particular method of clawback forces some solar users to pay hundreds of dollars more to the utility than they should. So not only are they not being compensated fairly for their excess solar, but they are being charged for sending excess to the grid. 

It bears repeating that this is the product of a decision made by the CA Public Utilities Commission (CPUC), with the full involvement of the Newsom Administration—at the behest of the monopoly utilities. 
 
If you find that you are sending a lot more energy to the utility than you are buying from the utility, you may want to consider these steps:

My True-Up statement seems a lot higher this year. What's going on?

There are several possible reasons for this, which we explain in Why is my electric bill so high if I have solar panels?

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Dave Rosenfeld

Executive Director

Dave Rosenfeld, Executive Director

Cailey Underhill

Advocacy &
Development Director

Cailey Underhill, Advocacy & Development Director
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