You have solar panels. You assumed you were covered. So why is your utility asking you for money? Here's how the true-up actually works.
Every year, somewhere between April and June, hundreds of thousands of California solar homeowners receive a document from their utility company that many didn't expect and few fully understand: the annual true-up statement. For some, it's a pleasant confirmation that their solar system covered their electricity costs. For many others — particularly those with older systems from Sunrun, Vivint Solar, or SolarCity — it's an unpleasant surprise.
If you're staring at a true-up bill for $500, $1,000, or more, and you're wondering how that's even possible when you have solar panels on your roof, this post is for you. We're going to explain exactly how the true-up process works, why you still owe money, and what you can do to change the outcome next year.
When you have solar panels, your home doesn't just use electricity from the grid anymore. During the day, your panels produce electricity. If they produce more than your home is using at that moment, the excess flows back to the grid. When that happens, your utility meter literally runs backward — you're earning credits.
At night, on cloudy days, or any time your home uses more electricity than your panels produce, you pull electricity from the grid like normal. That costs money.
Net energy metering (NEM) is the billing arrangement that tracks this back-and-forth over the course of an entire year. Your utility doesn't settle up monthly in the traditional sense — instead, it accumulates credits and charges over 12 months. The true-up is the annual final bill where everything gets settled.
If it were just a matter of total kilowatt-hours, the true-up would be straightforward. But there are several factors that make the math more complicated — and usually not in your favor.
If you're on a time-of-use (TOU) rate plan — and most solar customers in California are — the price of electricity changes depending on when you use it. Electricity during peak hours (typically 4 PM–9 PM) costs significantly more than during off-peak hours.
Here's the problem: your solar panels produce most of their electricity between 10 AM and 3 PM, which is off-peak. The credits you earn for exporting that energy are valued at the lower off-peak rate. But when you pull electricity from the grid in the evening during peak hours, you're charged the higher rate. So even if the raw kWh numbers are close to balanced, the dollar values aren't.
Even if your solar system produces 100% of the electricity you use over the course of the year, you'll still owe something on your true-up bill. California utilities charge what are called "non-bypassable charges" (NBCs) on every kWh you import from the grid, regardless of your solar credits. These are small per-kWh fees (typically 2–4 cents) that fund public programs like low-income assistance, nuclear decommissioning, and energy efficiency programs. They can't be offset by solar credits. Over the course of a year, NBCs typically add $100–$200 to your true-up bill even on a perfectly balanced system.
Your utility also charges a minimum monthly delivery fee — usually around $10–$12 per month — just for being connected to the grid. That's roughly $120–$144 per year that shows up on your true-up regardless of your solar production. Think of it as a membership fee for having grid access.
True-up statements from SCE, SDG&E, and PG&E can be confusing. Here are the key numbers to look for:
1 Total kWh Generated (Received by Grid): This is how much electricity your solar system exported to the grid over the year. It's a proxy for your system's production, though it doesn't include the solar electricity you consumed directly in your home.
2 Total kWh Delivered (From Grid): This is how much electricity you pulled from the grid. The higher this number relative to your generation, the bigger your bill.
3 Net Energy Charges by Period: This breaks down charges and credits by TOU period (peak, off-peak, super off-peak). This is where you'll see the impact of the rate imbalance described above.
4 Non-Bypassable Charges: The fixed fees that solar credits can't offset.
5 Total Amount Due: The bottom line — what you owe after all credits are applied.
Based on the hundreds of solar system assessments we've done for homeowners across Southern California, here are the most frequent causes of unexpectedly high true-up bills, roughly in order of how often we see them:
In our experience, most homeowners have at least two of these factors working against them simultaneously. It's rarely just one thing.
Shift heavy energy use to solar hours. Run your dishwasher, laundry, and pool pump during the day when your panels are producing. If you charge an EV at home, set it to charge between 10 AM and 2 PM if possible. Every kWh you use directly from your panels is a kWh you don't have to buy from the grid at peak rates.
Get your system inspected. If you haven't had a professional look at your system since it was installed, an inspection can uncover problems that are easy to fix but expensive to ignore. A failed microinverter, a tripped breaker, or heavy soiling can each account for hundreds of dollars on your true-up.
Optimize your rate plan. Contact your utility and ask about available TOU plans for solar customers. Different plans have different peak/off-peak windows and rate structures. The right plan for your production and usage pattern could save you $200–$500 per year.
Add battery storage. A home battery like the Tesla Powerwall or Enphase IQ Battery stores excess solar production during the day and discharges it during evening peak hours. This maximizes the value of every kWh your panels produce, especially under TOU rate structures. For many pre-2018 system owners on NEM 1.0 or 2.0, adding a battery is the single most impactful upgrade available.
Expand your system. If your energy needs have genuinely outgrown your system, adding panels may be the most direct solution — especially if your roof has space and you're still on a favorable NEM plan.
Yes. SCE, SDG&E, and PG&E all offer payment plans for true-up balances. Contact your utility to set one up. Some also offer levelized billing that spreads your estimated annual costs across 12 equal monthly payments.
If nothing changes — your system continues to degrade, your usage stays the same or increases, and utility rates keep rising — then yes, it will likely increase. That's why taking action now, rather than hoping for a better outcome next year, is so important.
You are. Your lease or PPA is with your solar company. Your true-up is with your utility. They're separate bills. If your leased system underperforms, you still owe the utility for any electricity your system didn't cover — on top of your monthly lease payment.
Under NEM 1.0 and 2.0, if your system produces more than you use over the full year, you'll receive a net surplus compensation — but the rate is very low (typically 2–4 cents per kWh). It's generally better to size your system to produce close to what you use rather than significantly overproduce.
Your true-up cycle starts on the anniversary of when your system was connected to the grid (your Permission to Operate date). It's not necessarily aligned with the calendar year. Check your utility account or your original interconnection paperwork for your specific date.
SoCal Solar Check helps homeowners across Southern California make sense of their true-up bills and take concrete steps to reduce them. Our free solar assessment covers system performance, rate plan analysis, and actionable recommendations — whether you have Sunrun, Vivint, SolarCity, or any other system.
Get Your Free Solar AssessmentThe true-up statement doesn't have to be a mystery or an annual source of dread. Once you understand how NEM billing works, where your money is going, and what's causing the gap between your solar production and your electricity needs, you can make informed decisions. Whether that means shifting your usage patterns, fixing an underperforming system, changing your rate plan, or adding a battery, the path to a lower true-up bill starts with understanding the one you just received.