What Is a True-Up Bill? (And Why It Might Be Higher Than You Expected)

Quick Summary:

A true-up bill is the annual statement your utility sends to settle the difference between what your solar system produced and what your home actually used over the past 12 months. Most solar customers owe something at true-up — the bill is high when consumption outpaces production, fixed fees accumulate, or your energy use doesn’t line up with when your panels are producing.

What Is a True-Up Bill?

A true-up bill is an annual statement your utility sends to reconcile the difference between the electricity your solar system produced and the electricity your home actually consumed over the past 12 months.

Here’s the basic mechanic: when your solar panels produce more power than your home needs at any given moment, the excess flows back to the grid. Your utility tracks that surplus and issues you bill credits. When your panels aren’t producing — at night, during cloudy stretches, or in winter — you draw power from the grid and those credits get applied against what you owe.

Throughout the year, this back-and-forth is tracked but often not fully settled each month. Once per year, on the anniversary of your solar activation date, your utility adds everything up. If you owe more than your credits cover, that balance shows up on your true-up statement.

If your system produced more than you consumed over the full year, you may receive a small credit — though most utilities pay out surplus energy at a rate significantly lower than what you pay to buy electricity. A typical net surplus payout runs between $0.02 and $0.05 per kilowatt-hour, depending on your utility and state program.

Which States Use Annual True-Up Billing?

True-up billing is tied to net metering programs, which exist in most U.S. states. The structure varies by utility and state policy, but the annual reconciliation concept is common across:

• California — PG&E, SCE, and SDG&E customers on NEM 2.0 settle annually; customers on the newer Net Billing Tariff (NEM 3.0 / Solar Billing Plan) settle monthly
• New Jersey — credits roll over monthly at the retail rate; any remaining surplus at year-end is paid out at a lower wholesale rate
• New York — National Grid and other utilities roll credits monthly with annual settlement
• Massachusetts — annual true-up with settlement at avoided cost rates for surplus
• Hawaii — annual settlement for older NEM programs
• Many other states — including those served by Xcel Energy across Colorado, Minnesota, and other territories

Not every state or utility uses annual true-up billing. Some settle monthly, some allow credits to roll over indefinitely, and some states — including Texas, which operates its own deregulated grid — do not have statewide net metering at all. Always check your utility’s specific solar billing policy or your interconnection agreement for the exact terms that apply to you.

Source: NC Clean Energy Technology Center, 50 States of Solar, 2024 Annual Review. U.S. Energy Information Administration, Electric Power Monthly.

Why Is My True-Up Bill Higher Than Expected?

This is the question most people are actually asking. Here are the four most common reasons a true-up bill ends up larger than the installer projected.

1. Your System Was Undersized

Solar installers size systems based on your historical electricity usage — typically your previous 12 months of utility bills. But estimates aren’t guarantees. If your system was designed to offset 80% of your usage and you ended up using more electricity than the prior year, your solar production won’t keep pace.

Common reasons usage grows after going solar: people run the air conditioning more freely, add an electric vehicle, switch from gas to electric appliances, or simply have more people living at home. Any increase in consumption that wasn’t factored into the original system design will show up as a balance owed at true-up.

What this means practically: A system that was correctly sized for last year’s usage isn’t automatically sized correctly for this year’s. If your lifestyle or household has changed, your true-up bill will reflect that gap.

2. Fixed Fees and Non-Bypassable Charges That Solar Can’t Offset

Solar credits can offset the energy portion of your electric bill, but they cannot offset certain fixed fees that utilities charge every customer regardless of how much solar you produce.

These fees go by different names depending on your state and utility. In California, they are called non-bypassable charges (NBCs) and cover programs such as public purpose programs, low-income customer assistance, and nuclear decommissioning costs. In other states, similar fees fund grid infrastructure, transmission costs, or regulatory programs.

In California, NBCs typically amount to $0.02–$0.04 per kilowatt-hour on every kWh you import from the grid. They also apply on a gross usage basis, meaning they can’t be netted away by your solar production. Over a full year, these charges accumulate and appear on your true-up statement even if your solar credits would otherwise zero out your energy bill.

Most utilities also charge a minimum monthly service or connection fee — sometimes called a base service charge or customer charge — that applies regardless of solar production. These fees exist to cover the utility’s cost of maintaining your grid connection. As of 2026, PG&E’s base services charge for residential customers is approximately $24 per month for non-CARE customers, effective March 2026.

Source: California Public Utilities Commission (CPUC), Net Energy Metering and Net Billing page. PG&E Solar Bill page, March 2026.

3. You Used More Electricity During Peak Hours Than Your System Produced

Most solar customers in the U.S. are now on time-of-use (TOU) rate plans, which charge different prices for electricity depending on the time of day. Peak hours — typically late afternoon through evening, often 4 PM to 9 PM — carry the highest rates. Off-peak hours, usually overnight and early morning, carry the lowest.

The mismatch with solar is structural. Solar panels produce the most electricity during midday when the sun is highest. Peak demand — and the highest electricity rates — happen in the evening after solar production has dropped off. This means you’re often exporting solar during the lower-value midday hours and buying back expensive electricity during peak evening hours.

The financial impact of this mismatch has grown as more states and utilities have shifted solar customers to TOU rates. Under older flat-rate net metering, this timing gap didn’t matter — a kilowatt-hour produced at noon was credited the same as a kilowatt-hour consumed at 7 PM. Under TOU billing, those two kilowatt-hours are valued very differently.

If your true-up bill is higher than expected and you’re on a TOU rate, check how much of your household electricity consumption falls in the peak window. Evening routines — cooking dinner, running the dishwasher, doing laundry, charging an EV — are the most common culprits.

4. Your Export Credits Are Worth Less Than What You Pay to Import

This applies most directly to solar customers in California under the current Net Billing Tariff (NEM 3.0, effective April 2023), but the underlying dynamic is spreading to other states as net metering policies evolve.

Under traditional net metering, every kilowatt-hour your solar system exported to the grid was credited at roughly the same rate you’d pay to buy electricity. The math was straightforward. Under net billing structures, exported electricity is compensated at a much lower “avoided cost” rate — what the utility would have paid to generate that power elsewhere — rather than the retail rate.

In California under NEM 3.0, the average midday export rate is approximately $0.05–$0.08 per kWh. The retail rate for electricity in the same utility territories runs significantly higher. This gap means that even if your system is producing plenty of electricity, you may be banking credits worth far less than the electricity you buy back during evening peak hours.

Outside California, states including Nevada, Arizona, and others have reduced net metering compensation rates in recent years. The specific structure varies by state and utility. If you’re unsure what credit rate applies to your solar exports, check your utility’s current rate schedule or your interconnection agreement.

Source: California Public Utilities Commission (CPUC), Net Energy Metering and Net Billing. San Diego Gas & Electric, Understanding Your Solar Bill.

How to Read Your True-Up Statement

True-up statements vary by utility but generally include:

• Year-to-date energy charges: The cumulative electricity you consumed from the grid over 12 months
• Year-to-date export credits: The credits you earned by sending solar energy back to the grid
• Non-bypassable charges or fixed fees: Charges that accumulated separately and can’t be offset by solar credits
• Net balance: What you owe after credits are applied, or a note of any surplus credit

If your statement shows a balance due, it’s the sum of everything that your solar credits didn’t fully cover over the year. Reading the line items tells you which category drove the bill — was it energy charges (meaning your system underproduced relative to consumption), fixed fees, or a combination?

Your monthly statements throughout the year typically show a running year-to-date balance. If you review those monthly, you can catch a rising balance early rather than seeing the full number at true-up.

Can You Reduce Your True-Up Bill?

In most cases, yes — though the right approach depends on why your bill is high.

If your system is undersized: The most direct fix is adding panels, though this may affect which billing tariff applies to you depending on your state and utility rules. Check with your utility before expanding a system to understand any implications for your current agreement.

If peak-hour consumption is the issue: Shifting when you run high-draw appliances makes a measurable difference. Running the dishwasher, laundry, and EV charging before 4 PM or after 9 PM (or whatever your utility’s peak window is) reduces how much expensive grid electricity you consume in the billing year.

If you want to reduce grid dependence at all hours: Battery storage lets you store excess solar production during the day and use it during evening peak hours instead of buying from the grid. This is particularly effective under TOU rate plans where the cost difference between peak and off-peak electricity is large.

If fixed fees are the driver: These are generally not reducible — they’re mandatory charges that apply to all grid-connected customers regardless of solar production. Factor them into your annual solar savings estimate rather than expecting solar to eliminate them.

What to Do If Your True-Up Bill Surprises You

Start by reading the statement line by line. Identify whether the balance is primarily from energy charges, fixed fees, or both. If something looks incorrect — for example, if your meter data shows much higher usage than your monitoring app suggests — contact your utility. Billing errors do happen, particularly in the first year on a solar billing program.

If the math is correct but the bill is larger than your installer projected, compare your actual annual electricity consumption to what the proposal assumed. If your usage grew, that’s a sizing conversation. If your usage was flat but your credits came in below the estimate, look at whether export rates changed or whether your system underproduced.

Most utilities have solar billing support lines separate from general customer service. In California, PG&E’s solar billing department can be reached at 1-877-743-4112. SCE and SDG&E have dedicated solar billing pages on their websites with sample statements and billing explanations.

Source: PG&E, Solar Bill page. SDG&E, Understanding Your Solar Bill.

Final Thoughts

A true-up bill is not a sign that solar isn’t working. It’s a sign that the annual math came out in the utility’s favor — which happens when consumption outpaces production, when fixed fees accumulate, or when the timing of your energy use doesn’t align well with when your panels are producing.

Most solar customers do reduce their electricity costs significantly over time. But “significantly reduced” and “eliminated” are different things, and the gap between them shows up most clearly on true-up day.

Understanding what drives your true-up bill gives you actual options — not just frustration.

This article is for informational purposes only. Net metering policies, billing structures, and fee schedules vary by state, utility, and individual interconnection agreement and are subject to change. Contact your utility directly for the billing terms that apply to your specific account.