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What is a true-up solar bill?

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

One year after you go solar, you will receive a true-up solar bill from your electric utility.  This is because the billing with your designated electric utility changes from traditional billing to solar billing.  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 solar bill.

A true-up solar bill is an annual billing statement that you will receive from your utility provider.  Although you will receive a monthly statement from the electric utility, 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 or business. 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 or business for any grid access or service account fees that must be paid monthly.

True up solar bill

One of our customers purchased a home last year with a leased solar system that did not meet their energy needs. They received a $5,000 true up solar bill from PG&E!

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 or business, and how much was fed back into the electric 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.

What surprises can you plan for?
There are a few surprises we have found customers were unprepared for. First, a large true-up bill. Many times this means the home or business used much more electricity than they 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 the electricity they sell back to the utility.  This is why it is important to understand the net energy metering program your electric utility is currently offering.

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, if the solar installation was not built to offset 100% of the home or business’s energy usage.  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. 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 this scenario 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.
  • Second, many consumers either consciously, or unconsciously, increase their electricity usage once they go solar.  Most systems are built off a 12-month baseline, 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 or business at a cooler temperature while running the A.C.
  • Finally, if your system was built without a good baseline of energy usage, there is a chance that the system will not be designed to offset the actual energy usage of your property. Having a solid 12 months of energy usage (and factoring in future improvements to the property) will give your consultant or solar installation company enough information to design a system that offsets all of the property’s energy usage (if possible).

Contact Us!
Want to ensure your family or business is not surprised with a large true-up solar bill?  Get your turnkey home or business solar system and battery proposal with ROI and financing options by e-mailing us your most recent electric bill (12 months for businesses), a picture of the electrical panel (or switchgear), and a picture of your roof today: info@beachcitiessolarconsulting.com