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.
People who go solar will see some changes to their utility bill. Solar users continue to get a monthly statement from your utility. In addition, solar users 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.
Background on net metering
All utility customers have a meter which reads off how much power you use and when, so the utility can bill you appropriately. Solar users make their own power when the sun shines and sends any surplus energy back to the grid. When the sun isn’t shining, the solar user buys electricity from the utility. You pay the utility for energy you use from the grid when the sun isn’t shining—minus the credit you receive for the solar energy you send back to the grid. That process is “net metering.”
Solar users who have a battery typically send most of their surplus electricity to the battery rather than the grid. When the sun isn’t shining, the solar user draws electricity from the battery rather than the grid. These solar users might still buy electricity from the utility from time to time if there isn’t enough sun, or the battery is empty.
What happens when the sun is shining
- During high solar production months, your solar panels will likely produce more energy than you consume. In those months, your extra energy will be sent back to the grid and “banked” as a credit for you to use in the future. Again, if you have a battery, you will likely store most of this energy in the battery, and send little to nothing back to the grid.
- NEM1 and NEM2 customers receive a credit for their excess electricity. This credit is similar to the price of electricity at that time of day. NEM3 customers receive a credit that is about 80% less than that. That’s thanks to utility industry lobbying. Note: NEM3 customers are those who submitted an interconnection application to the utility after April 15th, 2023.
- Under this circumstance, your “net” energy use will be a negative number.
What happens when the sun isn’t shining
- During low solar production months and anytime the sun isn’t shining, you likely consume some electricity from the grid.
- In those months, any extra energy credits you previously “banked” will get applied.
- Under this circumstance, your “net” energy use will be a positive number.
Your month-to-month statement from the utility
No matter what, you will always incur monthly charges for grid usage and connection fees. In addition, your monthly statement will also list your net energy usage. It will read as either a charge or a credit. NEM1 and NEM2 customers can defer paying any balance until True-Up. NEM3 customers must pay any balance monthly. In both cases, credits are carried forward until True-Up.
Your annual True-Up statement
The True-Up statement is what the utility sends solar users on the anniversary of the date your solar system turned on. The True-Up reconciles all the cumulative energy charges and credits and compensation for an entire 12-month period.
- If a balance is due after all credits and charges are reconciled, the amount will appear on the True-Up statement.
- If your system produced more energy than you consumed over the 12-month billing cycle, you will receive a small credit on your True-Up bill. The credit will be between 2 to 4 cents per kilowatt-hour for any leftover energy.
- At that time, your “bank” is cashed out, and you start the annual cycle over again.
If you are on NEM2 (with or without a battery): here is a more detailed writeup provided by a Solar Rights Alliance volunteer.
Consumer tip for NEM1 and NEM2 customers: Pay any balance monthly, don’t wait for your True-Up Statement
Even though NEM1 and NEM2 customers don’t have to pay their utility balance until True-Up, we don’t recommend that you wait. If you see a balance on your monthly statement, pay it then. This avoids any surprises at True-Up. As stated earlier, NEM3 customers are already required to pay any balances monthly.
Important Data Points on Your True-Up Statement
Your True-Up statement will include:
- The electricity your solar system produced over the course of the year (measured in kilowatt hours, or kWh).
- How much electricity you bought from the grid, and how much of that was covered by your net metering credits.
- The retail electricity rate used to value the accrued credit.
- The amount of any leftover solar energy credits, and the amount owed to you.
- The total amount you must pay the utility company.
What is the Difference Between My Monthly Bill and My True-Up Statement?
After going solar and knowing you will have an annual True-Up statement, consumers often ask why they still receive a monthly utility statement. Monthly statements from the utility includes minimum monthly due delivery charges. Additionally, the monthly bill allows homeowners to track toward the annual True-Up, with a snapshot of current and year-to-date charges and credits.
A Learning Curve at True-Up
Taking a few minutes to understand the difference between a standard bill and a bill that you will see once you go solar, on both a monthly and an annual basis is important. If you find you still have lingering questions regarding your bill, reach out to your local solar installer for additional guidance to ensure you are confident in the documents you receive from the utility.