The Truth About True-Ups
“Isn't the true-up payment at the end of the year? My neighbor said he pays $2,500 for his true-up which is more than I pay all year for PG&E.”
I stumbled upon this quote the other day from a response to a Facebook post one of my customers wrote. You can read her original post and her response here-as well as another one of my customers who also commented. (Sonora is a great town!)
The person’s concern is legitimate, and if this was how solar was designed to work, it would be a terrible idea.
The good news is your true-up bill should be $0.
So where does the sad reality of people getting big PG&E bills come from?
This blog posts gives you what you need to know about solar True-Up bills:
What causes them
How to avoid them
Why the big True-Up is no longer a concern for new solar customers.
So What is a True-Up Bill?
For PG&E customers who went solar before April 2023, a true-up bill is what PG&E sends the solar customer at the yearly anniversary of their system being turned on.
It is supposed to be $0.
If the system did not produce as much electricity as the solar customer used over the year, the remaining electricity came from PG&E at their standard rate and they would be billed for it.
For example:
The solar system produced 10,500kWh of electricity that year, but the customer used 11,300kWh.
This means 800kWh came from PG&E. So the customer would owe PG&E for that 800kWh.
At $0.42 per kilowatt hour, their “true-up” would be $336. (800kWh * $0.42= $336).
Why Do Some People Get True-Up Bills?
Sadly, the fear of getting a huge a True-Up bill is one of the primary reasons many people avoid getting solar. What is truly sad is it doesn’t have to be this way.
So why do they happen?
Part of the persistence of this fear is that there is no one simple reason it occurs, but here are the main causes, and how you can avoid them if you are wanting to go solar.
The System Was Not Sized Correctly Initially
Solar companies base the system size off of your usage for the past 12 months. Standard practice is to size the system around 120% of the previous years usage.
If the solar rep or solar company that initially sized your system did not follow this rule, the customer will get a true-up bill because the system may not be able to produce everything they need.
So why would the rep/company under size the system?
Sometimes it is due to incompetence, but sadly, sometimes it is due to unethical sales reps deliberately under sizing the system.
Whether it’s a Purchase or a PPA, if the rep undersized the system it looks like the customer is saving more money. But then the end of the year hits and they get a whopper true-up bill.
Sad but true. In my 10+ years doing this, I have seen it too many times- and even spoken with a rep who bragged about it. Sort of the solar version of ENRON.
How Do I Avoid This If I Want to Go Solar?
This is a pretty easy fix. Make sure your rep shows you how many kilowatts you used last year and what the system is supposed to be producing in kilowatts.
Then ask what the offset is. If it is below 120% you may have an issue if you plan on using the same amount of electricity. If you want to use a lot more AC, you may need to go above 120%.
These numbers should be on the proposal and the rep should tell you without you asking. This is a red flag if the rep doesn’t bring it up or show it to you.
Note for Solar Owners- If you got a True-Up bill from year one and still get one, sadly this is likely what happened. It is possible in many circumstances to add panels, but it depends on your system set up.
I can help you determine if it is worthwhile to do this.
2. The System Went Down at Some Point During the Year and No One Noticed.
In this scenario, the solar system wasn’t producing anything so all the home’s electricity was coming from PG&E. The good news is once you get the system repaired, the true-up will go away.
For systems installed after April 2023, this is no longer an issue since the true-ups occur monthly under the new PG&E rules (see below). If you suddenly get a large bill from PG&E, check your monitoring app, your system may have an issue.
Note for Solar Owners installed before April 2023: If you never received a true-up bill and suddenly you get a large one, this is likely what happened. Check your monitoring app or call your installer/rep to tell them.
3. The People in the Home Began Using More Electricity Than In The Past.
This could be due to changes such as:
Adding a swimming pool/hot tub
Getting an electric car
Kids moving back into the house
Your neighbor tapping into your electricity to run their illegal grow operation next door. (Yes, this actually happens).
How Do I Avoid This If I Want to Go Solar?
Make sure you communicate with your Solar Rep any changes you think you will be making in the future.
Are you planning on getting a swimming pool/hot tub?
Are you planning on getting an EV that you will use a lot? (Tooling back and forth to the store wouldn’t be an issue if the system was sized correctly initially (120%)- though when to charge it is important).
Any major changes to the size of the household?
Note to Current Solar Owners: You can solve this by adding more panels, but under the new rules, it is very case specific if it is in your best interest.
4. People Moving Into a House With Pre-Existing Solar That Doesn’t Meet Their Needs
If the system was originally sized for an elderly couple who didn’t use much electricity, when a family of 6 move in, they will owe PG&E since the system will not meet their needs.
If you are looking to go solar, this isn’t a real concern, I just put it here because this is a not an uncommon reason for people to complain about True-Up bills. Especially if they moved into a new build that had mandatory solar. Often times home builders just put the bare minimum number of panels on.
Note to Current Solar Owners: You can solve this by adding more panels, but under the new rules, it is very case specific if it is in your best interest.
There are a number of reasons that True-Ups can happen, but if you are looking to go Solar now, you don’t need to worry about.
Here’s why:
Under PG&E’s new Net Metering Rules that began in April 2023, PG&E will bill the customer monthly, NOT yearly.
If one month you end up using more than your system produced, you will just be billed for that extra electricity at PG&E’s current rate.
Still, you don’t want even that. The whole point is to get away from PG&E as best you can, so it is important the solar rep understands how to size systems AND battery size under PG&E’s new rules.
If you are in PG&E territory, make sure you ask if your rep is from Northern California. If they are not, they may not size it correctly since it is far more nuanced now.
