What is a solar true-up bill, and how much should you set aside for it?

Three ways a utility can end the year on a solar account

Before any number on a statement means anything, you need to know which of three settlement designs your account runs on. They are not interchangeable, and a webpage written about one will mislead you about another. The table sorts the utilities whose own documents this page read, using each document's wording for what is billed monthly and what is left for the year-end statement.

The first design is annual-billing net metering. Each month the meter reads both directions, and the net energy for the month appears as either a charge or a credit that is carried forward. PG&E's solar billing page says these credits and charges carry forward month to month for 12 billing cycles and are reconciled on the annual True-Up Statement, and that a balance due appears on the last PG&E bill of the cycle. SCE's NEM 1.0 statement guide says residential and small business customers are not required to pay current energy charges each month, and that the energy-related charges are due in the 12th month. SDG&E's residential NEM page says a customer can pay in full each month or pay part, and that any outstanding balance for the year is due on the annual true-up statement.

The second design is net billing, the tariff California adopted for applications from April 15, 2023. The CPUC's Decision 22-12-056 kept the annual true-up but required residential and nonresidential customers to pay their bills monthly, meaning all incurred charges every month, so credits roll forward but charges do not pile up unbilled. The third design, used by Xcel Energy in Colorado, has no settlement bill at all in the ordinary sense: excess generation sits in a bank that is either paid out by check at year end or carried indefinitely, depending on an election made on a form.

If you are unsure which design applies, find the words on your statement. PG&E and SCE annual-billing statements show year-to-date energy charges that are not yet due. SCE's NEM 2.0 statement sorts customers into an annual billing option, abbreviated ABO, and a monthly billing option, MBO. A net billing statement shows a current amount due that already includes energy charges after credits.

Which month the bill lands in, and the one-time date change

The settlement date is not a calendar year end. It is an anniversary. SCE's Schedule NBT defines the Relevant Period as a twelve-month period starting on the scheduled read date on or after the original permission to operate date, repeating every anniversary. SCE's help page for the Solar Billing Plan says the settlement bill arrives in the same month the system started service, so a system switched on in March gets its true-up each March. SDG&E's NEM page describes the true-up date as the NEM anniversary or settlement date, when the account is reconciled and reset for a new period. PG&E adds a caution on its Solar Billing Plan page: for a variety of reasons some customers' billing cycles may be shorter than a year.

That anchoring matters because the anniversary decides which seasons sit on each side of the line. A system energized in April collects its best production early in the cycle and its heaviest winter charges late, so by the true-up month the account has absorbed the full winter. A system energized in October starts the cycle with weak production, builds a balance through winter, and then earns credits in spring and summer before settling in the following September. The yearly total is similar, but the balance shown on any given statement is not, and under monthly payment the order of the seasons decides how much is paid in cash and how much is covered by credits banked earlier.

Decision 22-12-056 anticipated the awkward cases. It retained the annual true-up from the NEM 2.0 tariff and added that customers may make a one-time request to change the true-up date going forward, so that generation credits accrued in the summer can be used against winter bills. Its ordering paragraphs direct SDG&E to develop a standard process for such requests within 120 days of adoption. SCE's tariff gives the mechanism: the start date of the Relevant Period may be changed once, prospectively, on SCE's Form 14-936, which shortens the existing period and begins a new twelve-month one, and no period may run beyond twelve months. SCE's NEM page also describes a separate billing option form that lets eligible customers change their billing method and adjust their Relevant Period once, without affecting their total annual electricity cost.

The twelve months are a maximum. SCE's tariff says that if a customer terminates service, or switches between SCE bundled service and a community choice or direct access provider, before the period ends, settlement covers only the time since the last anniversary, so a seller or mover should expect that settlement with the final bill.

What piles up unbilled on an annual-billing account

On an annual-billing account the monthly bill is deliberately small. PG&E's residential NEM statement, since March 2026, shows a Base Services Charge of approximately $24 a month, which PG&E says is not eligible to be offset by monthly generation credits; the same page says it replaced the Minimum Electric Charge and is about $10 higher than that charge. Customers on the CARE and FERA programs pay discounted amounts, which PG&E's Base Services Charge page puts at about $6 and about $12 a month. Over twelve months the standard figure is $288 that no export credit will ever touch.

What does sit on the true-up is the energy line. SCE's NEM 1.0 guide describes the cumulative energy charge year to date as the most important number on the statement for judging what may be owed at the end of the Relevant Period, and says current energy charges are shown for information, because they are only required to be paid in the 12th month. The same guide says payments toward energy charges are optional and appear as credits on the next statement. SCE's NEM 2.0 statement describes the same choice in different words: customers on the annual option see year-to-date energy charges and the month in which charges not offset by credits will be due, and may make additional payments at any time to lower them.

• What the monthly statement shows as due: non-energy charges, taxes, and any fixed or base charge, plus whatever energy charges you choose to prepay.
• What the statement tracks quietly: year-to-date net energy charges or credits in dollars and kilowatt-hours. This is the number to read each month.
• What changes the year-to-date number most: winter heating load, summer cooling load, and new loads such as an EV or a pool. PG&E's own list of factors that affect a true-up names a new household member, large appliances, an electric car and a pool, along with system size, roof orientation and weather.

Rate design changes how fast the balance moves. A time-of-use plan prices the late-afternoon and evening hours highest, so a household that exports at noon and imports at dinner builds charges faster than the kilowatt-hour totals suggest. EnergyBS explains the structures in its California electricity rates guide, and its time-of-use strategy guide covers how to model your intervals.

The charges your export credits cannot touch

Even a system that exports more than the house uses can produce a bill, and the reason is written into the tariffs. Export credits offset energy charges. They do not offset a defined set of other charges, and the set is longer than most homeowners expect.

SCE's Schedule NBT is explicit. It states that Energy Export Credits are never applied to non-bypassable charges, minimum charges, demand charges or any fixed charges assessed under the customer's otherwise applicable tariff. The tariff lists four non-bypassable charge components for its purposes: the public purpose programs charge, the nuclear decommissioning charge, the competition transition charge and the Wildfire Fund charge, each assessed per kilowatt-hour imported from the grid. For residential customers it folds the assessed non-bypassable charges into the minimum charge calculation. The ACC Plus adder, the extra credit that early net billing customers earn, is the exception: the tariff lets it offset those charges, with any unused adder rolling forward.

SDG&E's sample solar bill guide, from a 2024 billing period, makes the same split visible on the page. It labels a line Non-Nettable Charges and defines it as required charges not eligible to be offset by delivery or generation export credits, listing monthly minimum charges, customer charges, meter charges, facilities charges, basic service charges, demand charges and surcharges, non-bypassable charges and any fixed charges. It then separates the netted part into delivery and generation: delivery export credits can only offset delivery import charges, and generation export credits can only offset generation import charges. A household that exports generation value but imports delivery services at night can finish the year with unused credits in one bucket and charges in the other.

SDG&E's residential NEM page gives a plain-language version of the same point: some required charges, such as state taxes, city franchise fees and public purpose programs including the wildfire fund and energy efficiency programs, are collected on behalf of government and cannot be offset by excess generation.

If your generation comes from a community choice aggregator or direct access provider, SCE's tariff has each entity run its own annual true-up, and SCE's credits do not reduce the provider's charges or the reverse. Look to the provider for how unused generation credits are treated.

A surplus year pays pennies, and can claw back credits you already used

The rare good outcome is exporting more than you import across the full period. It is worth knowing how little that is worth, because it shapes how big a system should be. At the other extreme, a system that never exports skips this settlement entirely, and what a non-export system gives up and still pays is worked out separately.

Net surplus compensation, the payment for that surplus, comes from California Assembly Bill 920 and is priced off wholesale electricity. SCE's Schedule NBT sets the rate as the simple rolling average of SCE's hourly default load aggregation point prices from hour ending 8 to hour ending 17, 7 a.m. to 5 p.m., across the customer's twelve-month period. SCE's rate page listed $0.01858 per kilowatt-hour for periods ending in October 2026 and a 2026 range from $0.01697 for August to $0.01997 for November. PG&E's table of NSC rates by true-up month, built on the same method under CPUC Decision 11-06-016, lists $0.02740 for October 2026, with 2026 values between $0.02684 and $0.03116. PG&E's own web pages describe the rate in different ranges, from about 2 to 4 cents on one page to about 2 to 9 cents on another, which is the reason to read the month's table instead of any summary.

The paying rate is small next to the credit the same kilowatt-hour earned in the monthly bills. PG&E says so directly on its NSC page: the surplus rate is comparable to what it pays other wholesale producers, while the monthly export credit is calculated using the full retail cost of providing energy. SCE's help page says the net surplus rate may not cover the full amount of the credit adjustments on the settlement bill.

Those credit adjustments are the part few owners expect. SCE's NBT tariff has the settlement compute an Energy Export Credit Adjustment when the account has net surplus energy: net surplus kilowatt-hours multiplied by the then-posted Average Retail Export Compensation Rate. Unused export credits are first used against that adjustment, then against the period's remaining energy charges, and anything still left over is forfeited. SCE's own example on its Solar Billing Plan page is a customer who used 900 kilowatt-hours from the grid and sent 1,000 back: the credits for the extra 100 kilowatt-hours are adjusted at settlement, and the adjustment shows up as a balance on the annual settlement bill, labelled EEC Adjustment. At SCE's October 2026 rate, those 100 surplus kilowatt-hours pay $1.86 (100 times $0.01858).

• Who gets paid: SCE's tariff limits NSC to a customer who affirmatively elected it, whose system is intended primarily to offset their own load; systems intentionally sized larger than expected requirements are not eligible. NSC arrives as an on-bill credit unless the customer elects a check, in which case any amount owed to SCE is subtracted first.
• Where it goes at PG&E: PG&E's page says a credit balance on a true-up statement can be left on the account for future charges or paid by check if over $1, requested through its Solar Customer Service Center.
• What happens to the surplus afterward: SCE sets net surplus energy to zero at the start of the next Relevant Period, and PG&E says remaining credits are reset to zero before a new 12-month cycle begins.

The CPUC's customer explanation attached to the net billing decision puts the sizing consequence plainly: because the surplus rate is so low, it is generally not in a customer's financial interest to install a system that produces much more than they use. The panel sizing guide works that logic through with usage numbers.

The year-end statement, line by line

Utilities format the settlement statement differently, but the lines fall into the same groups. The table walks one illustrative annual-billing account, entirely invented for this page, through the statement. It is not a real customer, and the dollar figures are round numbers chosen so the arithmetic can be followed. The household's twelve monthly net energy figures are in the worksheet at the end of this page, and they sum to the $468 in the first line.

Read the table top to bottom as the order in which the utility's system applies the numbers: energy first, then the surplus test, then fixed charges already paid, then payments you made ahead.

Two things in the table catch people. First, the surplus line is a test of kilowatt-hours, not dollars. SCE's guide warns that a negative cumulative dollar amount is not the monetary value of any net surplus compensation; the compensation is computed from kilowatt-hours at the wholesale-based rate. A spring dollar credit of $187 is a bookkeeping balance against future charges, not a payout. Second, the Energy Export Credit Adjustment on a net billing statement is a reduction of credits already applied, so a net billing customer with a surplus year can see a line that looks like a charge even though the household exported more than it imported.

Colorado's different ending: a bank instead of a bill

Xcel Energy's Colorado Solar Bank Election Form (version 02-24) shows an ending with no settlement statement. Under Option A, each excess kilowatt-hour becomes a dollar credit at the total energy rate and sits in a rollover bank. The form says the bank cannot be cashed out, nothing is credited if you move or stop service, and the election is permanent. Option B, the default, rolls excess monthly and pays a check at the end of the year at the average hourly incremental cost of electricity over the previous 12 months, which the form prints as 1.529 cents per kilowatt-hour for 2023. The form also sets a December 1 deadline for changing from B to A. Utah's Rocky Mountain Power ends the year differently: dollar credits carry from bill to bill and anything unused lapses at the March meter reading, worked through in the Utah export credit guide.

The lesson for a reader elsewhere is about defaults. In California a surplus year ends in a small credit or check at a wholesale-based rate, and in Colorado the default is a check at a wholesale-style cost. Either way a year-end surplus is priced like wholesale energy, and any plan that counts it at the retail rate overstates it several times over.

Moves that shrink a true-up before it arrives

A true-up balance is mostly a timing and load question, and several levers are in the owner's hands before the statement is produced. Each is documented by the utility, though availability varies by tariff and by account.

First, pay as you go if you can. SCE's NEM 1.0 guide says paying current energy charges each month reduces the chance of a large balance on the 12-month bill, and tells residential customers to call to request monthly billing. SCE's NEM billing option form lets eligible customers change billing method once. On the SDG&E NEM page, residential customers can pay in full each month or pay only part, and the page tells those who want to pay annually to turn off automatic payments, which is a warning that autopay may otherwise settle charges early. Whether you choose monthly payments or a reserve account, the cost is the same in total; only the timing changes.

Second, move the anniversary if the order of the seasons is wrong for you. The one-time date change in the decision and in SCE's tariff exists so credits earned in summer can be used against winter bills. The order matters most when charges are paid monthly, because credits can only offset charges that come after them. A period that starts in spring banks the spring and summer credits first, and the winter charges then draw them down. A period that starts in autumn makes you pay the winter charges in cash with nothing banked, and the summer credits arrive afterward with little left to offset before the period ends and unused credits reset. The move shortens the current period and cannot be repeated, so check the new anniversary against your production before requesting it.

Third, watch new loads. PG&E's list of true-up drivers names an electric vehicle and a pool, and any large load that runs outside solar hours adds import charges at the plan's evening prices. The break-even tables show how much a given increase in evening use changes payback, and EnergyBS covers the rate side. A battery shifts some of that load, which the battery decision guide prices, and the retrofit guide explains why adding storage to a grandfathered system can touch its tariff.

Fourth, do not change the system without reading the rules on periods. SCE's tariff says that if a customer modifies an existing generating facility and remains on the schedule after the new permission to operate, the Relevant Period stays the same as before the modification. Adding panels does not restart the clock, so a bigger system mid-cycle changes the second half of the year without resetting the first half. The grandfathering guide covers which changes can cost you your existing terms.

A month-by-month worksheet for setting the money aside

The aim is a reserve that is large enough by the true-up month and does not leave you cash-poor in between. Two rules are compared on the same invented household. The household is on an annual-billing account with an April anniversary, so its year runs from April to March. Its monthly net energy figures are round numbers: negative for months when exports earned more than imports cost, positive for months when charges exceeded credits.

Rule A follows the statement: each month, hold back the year-to-date net energy number, floored at zero, because a negative year-to-date balance is not money you can spend. Rule B is level: take last year's true-up, here $468, divide by 12 to get $39, and transfer that every month. The last column shows what the household would have paid each month if it had been billed monthly with credits rolling forward, which is how net billing customers are charged. All three routes end at $468, confirming that the choice changes timing, not total cost.

Read the table for the shape, not the digits. Through August the household's statements show a credit, and a person watching only the dollar balance would feel ahead by as much as $187 in June. Rule A holds nothing until September, then has to build $468 over the last seven months. Rule B parks $195 by August, which is cash the household did not need to set aside yet, and is short by $4 in February, because winter charges outrun a level plan. No simple rule is exact. What the worksheet shows is that the reserve needed in the last quarter is large and the gap between the two rules is widest in the middle of the year.

Rule B needs a correction when the year changes. Suppose a household adds an EV charger in January and its January to March net charges rise by $60 a month, a $180 increase on this example. At the end of December the Rule B reserve is $351, and the projected true-up is now $648. The remaining three months must carry $297, or $99 a month, instead of $39. The general formula is the projected balance minus the reserve so far, divided by the months left, recomputed whenever the monthly statement's year-to-date block shows a surprise.

To use the worksheet on your own account, replace the twelve net figures with the net numbers from your last year's monthly statements, or, if the account is new, with an estimate from your installer's production model compared with your bills; the guide to reading a production estimate shows how that model is built and where it errs. The break-even arithmetic behind the numbers is in how payback is calculated. If you plan to enlarge the system before the true-up month, the guide to expanding an existing system covers the permit and tariff steps that change the balance.