Beach Cities Solar Consulting

What is a true-up bill

What is a true-up bill


By James Kennedy, Founder and President Beach Cities Solar Consulting LLC

Once you go solar, the billing with your designated utility changes. Most customers are also utility customers of PG&E, one of the three major utility companies in California. A good solar installation company will walk you through what to expect with your bills when you go solar and introduce what is known as a True-Up bill.
A true-up bill is an annual billing statement that you will receive from your utility provider, such as PG&E. Although you will receive a monthly statement from PG&E, there will be an end-of-year statement that is known as a true-up bill. Your monthly statement will outline the total energy production and energy consumption of the household. It will also specify how much energy was purchased from the energy grid and the credits for any over-production from your panels awarded to your account. The monthly bill will also charge the household for any carrier fees and gas fees that must be paid monthly.
The true-up statement will be similar, but a bit more in-depth. The true-up will have a final, concrete calculation that outlines each month’s total solar production, and how much of that energy was consumed by the household and how much was fed back into grid. Additionally, the amount of electricity that was purchased from the utility will also be stated, per month and what the annual total cost of purchased electricity was. Also, any annual utility fees and other mandatory fees will be charged for the annual billing cycle.
What surprises can you plan for? There are a few surprises we have found customers confronted with that they were unprepared for. First, a large true-up bill. What this means, as we think we own the energy we produce, often there is a notable true-bill at year end, meaning we used much more electricity than produced. A second surprise that customers find is that the rate they purchased electricity from the utility is much higher than the rate the utility gives them for electricity they sell back to the utility. In an ideal world, the cost of sale and purchase is 1 to 1. However, in reality, the rate is higher than a solar homeowner was expected.
Why do you have a true-up balance due? A true-up balance can occur for several reasons, many of which can be avoided, or at least budgeted for. First, there are annual costs associated with being connected to the energy grid. These costs and associated fees are by passable and will be a cost that appears on a true-up bill.
Second, the residential solar installation was not built to offset the homeowner’s energy usage 100%. There are several reasons for this. One is that a rooftop may not be ideal for solar panel installation. Steep inclines, chimneys, vents, and skylights are a few of the problems solar installers and designers find. If there are obstacles on the roof, panels cannot be installed safely. Or, panels are placed in areas that now have efficiency rates, meaning they are not producing at capacity. Another reason is unscrupulous salespeople who will undersell a system to knock down the sticker price of the system to lure in timid buyers. The problem with that is buyers will think they have a full system when in reality the system is only built to offset a small percentage of total energy use, which could result in a very high true-up bill.
Third, some consumers either consciously, or unconsciously, increase their electricity usage once they go solar. As systems are built off a baseline energy unit, assuming it was built to offset usage by 100%, an increase in electricity usage could result in a true-up bill. Increases in electricity consumption could be caused by additional family members moving in or keeping the home at a cooler temperature while running the A.C.
Finally, if a homeowner has a system built without a good baseline energy usage, there is a chance that the system will not be designed to offset the actual energy usage of a home. Having a solid 12 months of energy usage will give your solar installation company enough information to truly design a system that answers a home’s energy usage. Less than 12 months leave the homeowner open to risking a large true-up bill due to inaccuracy in system design.
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