Quick answer: what a “solar true-up” is
A solar true-up is the utility’s annual settlement that totals up your solar-related credits and charges over a set 12-month period and shows whether you end the year owing money or with remaining credits.
Many utilities send you a monthly statement and a separate annual true-up statement. For example, PG&E describes a True-Up statement as a yearly summary of net charges and credits. Source: PG&E True-Up explainer. :contentReference[oaicite:3]{index=3}
Monthly statement vs annual true-up statement
- Monthly statement: shows what happened during that billing month (imports, exports, fees, minimum charges, and any credits applied).
- Annual true-up statement: reconciles the whole year under your program rules and shows the final balance due or how remaining credits are handled.
The #1 reason homeowners get surprised
Most surprises come from one of these:
- Credits don’t equal cash (and may be worth less at settlement than people assume).
- Some charges stay no matter what (customer charge, meter fee, minimum bill).
- Export credits may expire or reset at true-up depending on the program.
The 3 common ways utilities track solar credits
Before you interpret any true-up statement, you need to know what kind of credit accounting your utility uses. SolarBasicsHub covers the big picture of how credits can be tracked as kWh or dollars here:
1) kWh “bank” (classic net metering style)
Your bill shows a running balance of exported kWh that can offset imported kWh later (often seasonally). This is why summer exports can “cover” winter imports in some programs—until true-up rules say otherwise.
2) $ bill credits (common in net billing / modern export compensation)
Exports are converted into a dollar credit using an export rate (which may be lower than what you pay when you import). If export rates are low, a large export surplus might not erase a large import bill later.
3) Hybrid (kWh + $)
Some utilities show both: kWh netting for certain components and $ credits for others, or time-of-use export credit values that vary by hour/season.
What happens at true-up (step-by-step, plain English)
Step 1: Monthly charges still happen (even with solar)
Many utilities still bill certain costs monthly:
- Customer/meter charges
- Minimum bills (a minimum amount you pay even if net energy is low)
- Non-bypassable charges in some territories (program-specific)
This is one reason “100% offset” doesn’t always mean a $0 bill. SolarBasicsHub explains fixed charges and minimum bills in the electric bill guide: https://solarbasicshub.com/how-to-read-your-electric-bill-for-solar-before-after-going-solar/
Step 2: Annual reconciliation totals your net position
At true-up, the utility totals your imports and exports under the program’s rules for the settlement period (often 12 months).
Some California programs and utility explainers describe annual true-up/settlement structures, including annual true-up with credits/charges rolling over for 12 months depending on the option. Source: CPUC overview of net energy metering/net billing structures. :contentReference[oaicite:4]{index=4}
Step 3: “Net surplus” is defined (and paid out differently)
If you produce more than you consume over the settlement period, you may have net surplus generation. Many utilities do not pay the full retail rate for that surplus; instead, payout can be based on a separate compensation rate (often called Net Surplus Compensation or a similar term).
Example: Southern California Edison notes payout eligibility and references the Net Surplus Compensation rate in NEM contexts. Source: SCE NEM bill help center. :contentReference[oaicite:5]{index=5}
What happens to unused solar credits (the 4 outcomes)
This is the heart of true-up. “Unused credits” can behave in very different ways depending on your program.
Outcome A: Credits roll over (carry forward)
Some programs allow unused credits to carry forward month-to-month. This is what makes solar feel “season-proof” in classic net metering: summer surplus helps offset winter imports.
Outcome B: Credits expire or reset
Some programs reset credits at the end of the settlement period (or at a fixed annual date). That means “extra” exports you built up may not help later, which can make oversizing a system a bad financial decision.
Public program pages and community-choice aggregators describe situations where retail credits can be zeroed out at cash-out/true-up and surplus is handled separately. Source: MCE NEM program description. :contentReference[oaicite:6]{index=6}
Outcome C: Credits are cashed out at a different rate (NSC / avoided cost)
In many programs, if you end the year with net surplus, you may be paid at a net surplus compensation rate (or similar), which is often closer to wholesale/avoided cost than retail.
Utilities and local energy programs explain true-up as a settlement process that reconciles annual net energy and may result in either a bill or credit/payout. Source: San José Clean Energy true-up explainer and PG&E true-up definitions. :contentReference[oaicite:7]{index=7}
Outcome D: Special rules (rare, but real)
Some programs have unique rules like seasonal cash-out windows, limited transfer/donation options, or separate treatment for generation components. Always verify for your exact tariff.
How to tell if you’re oversized, undersized, or just seasonal
Seasonal swing is normal
Many homes export more in spring/summer and import more in winter (shorter days, more cloud cover, higher heating loads in some regions). SolarBasicsHub calls this out as a common reason bills can look “wrong” month-to-month. https://solarbasicshub.com/how-to-read-your-electric-bill-for-solar-before-after-going-solar/
Make sure you’re comparing the same date windows
A classic mistake: comparing your monitoring app’s “monthly” view (calendar month) to your utility bill (mid-month to mid-month). SolarBasicsHub explains how to align those windows here:
https://solarbasicshub.com/how-to-read-solar-monitoring-app/
Use these “true-up clues”
- Consistent large surplus credits every year + low or zero payout value → your system may be oversized for your program rules.
- Consistent year-end balance due despite decent production → TOU timing, export rate mismatch, higher usage than expected, or the system is undersized.
- Sudden change vs last year → check monitoring for outages, alerts, or new shading patterns (before blaming panels).
If your production estimate felt “too good to be true,” run a quick reality check with PVWatts (and compare monthly kWh, not just annual):
https://solarbasicshub.com/pvwatts-solar-production-estimate/
How TOU and export limits change true-up outcomes
TOU mismatch: midday solar vs evening rates
Solar often produces most around midday, but many TOU plans charge the highest rates in the late afternoon/evening—when solar is falling. That mismatch can make true-up balances worse even if your annual kWh looks strong.
SolarBasicsHub covers TOU impacts in the bill guide and net metering/net billing guide:
- https://solarbasicshub.com/how-to-read-your-electric-bill-for-solar-before-after-going-solar/
- https://solarbasicshub.com/net-metering-explained-how-solar-credits-work-and-what-net-billing-changes/
Export limits/curtailment: credits you never earned
If your system is capped by an export limit, you may see sunny-day reductions where the system “holds back.” That can reduce exports and therefore reduce credits that would have otherwise helped at true-up.
Start here to understand export limits and curtailment (and how to distinguish them from clipping):
https://solarbasicshub.com/solar-export-limits-curtailment/
Decision table: what your true-up outcome usually means (and what to do next)
| What you see at true-up | What it often means | Best next action (homeowner-safe) |
|---|---|---|
| You owe money even though you “made a lot of solar” | TOU timing + low export credit, fixed charges, or higher-than-expected usage | Check rate plan, shift loads, review billing windows; consider storage only if economics fit |
| You have lots of leftover credits but payout is tiny | Surplus is compensated at a low NSC/avoided-cost style rate | Avoid oversizing next time; increase self-consumption where practical |
| Your credits reset/expire and you “lost” them | Program has annual reset rules | Confirm rollover/expiration rules; consider right-sizing and load timing |
| This year is way worse than last year | Production drop, monitoring issue, new shading, or more usage | Use monitoring app patterns and safe checks; compare same month YoY |
| True-up date doesn’t match your calendar year | Settlement often aligns to PTO/interconnection or utility cycle | Mark the true-up month; compare bills within the same settlement window |
Homeowner checklist before your true-up date
Copy/paste these questions to your utility or installer (and save the answers):
- Is my program tracking credits as kWh, $, or both?
- Do credits roll over monthly? Do they expire or reset?
- Is there an annual true-up? What happens to remaining credits?
- If there’s a payout, what is the net surplus compensation rate (or equivalent)?
- What fixed charges/minimum bills remain even with high credits?
- Does export credit value change by time-of-use?
- Is my system subject to export limits?
- Is my settlement period tied to my PTO date?
- How do I read the “netting” section on my bill each month?
- Do I have consumption monitoring enabled (CTs/meters), so I can see imports/exports clearly?
For PTO timing context: https://solarbasicshub.com/solar-permits-inspection-interconnection-pto/
FAQ
1) What is a solar true-up statement?
It’s an annual statement that summarizes your net energy charges and credits over the settlement period and shows a final balance due or how remaining credits are handled. Source: PG&E True-Up definition. :contentReference[oaicite:8]{index=8}
2) Why do I still pay something even with solar?
Many utilities still charge fixed customer/meter fees or minimum bills. Also, your solar production timing may not match when you use power. Start here: https://solarbasicshub.com/how-to-read-your-electric-bill-for-solar-before-after-going-solar/
3) What happens to unused solar credits?
It depends on your program: credits may roll over, expire/reset, or be paid out at a different (often lower) rate at true-up. Program structures vary widely. :contentReference[oaicite:9]{index=9}
4) What is the net surplus compensation rate?
It’s a payout rate used by some utilities for annual net surplus generation, typically different from the retail rate. Utilities may reference NSC in NEM bill explainers. Source: SCE NEM bill help center. :contentReference[oaicite:10]{index=10}
5) Is my true-up date the same as the calendar year?
Often no. Many utilities align the settlement period to your interconnection/PTO timing or a utility-defined annual cycle. :contentReference[oaicite:11]{index=11}
6) Does an export limit affect true-up?
Yes—if your system curtails exports, you may earn fewer credits than you’d expect from “sunny day potential.” Learn how to spot it here: https://solarbasicshub.com/solar-export-limits-curtailment/
Next to Read (internal links)
- Net Metering Explained: How Solar Credits Work (and What Net Billing Changes)
- How to Read Your Electric Bill for Solar (Before & After Going Solar)
- How to Read Your Solar Monitoring App (Production vs Consumption, Import/Export)
- Solar Export Limits & Curtailment: What They Are and How They Affect Savings
- How to Use NREL PVWatts to Estimate Solar Production (USA)
- Solar PTO Meaning: Permits, Inspection, Interconnection & Timeline
