Quick definition
Solar systems under net metering or similar billing structures don't settle their account every single month. Instead, credits and grid usage accumulate throughout the year, and at a specific annual date, the true-up period, the utility adds everything up and settles the account for good: any remaining credit gets handled according to program rules, and any shortfall gets billed.
This annual reconciliation approach lets a solar system's summer surplus production offset winter shortfalls across the full year, rather than forcing month-by-month settlement that wouldn't account for solar's natural seasonal production swing.
At a glance: the true-up date is often set based on the specific date a system was first interconnected to the grid, so it can genuinely differ from one solar customer to another, even within the same utility. San Diego Gas & Electric, for example, reconciles each customer's account on their own annual anniversary date rather than a single fixed date for everyone.
Why it matters
Understanding the true-up period matters for setting realistic monthly bill expectations throughout the year. Monthly bills under a net metering program often don't reflect the final financial picture, since a summer month showing a large credit balance could still be offset by winter months drawing that balance back down, all reconciled together only when the true-up date finally arrives.
This is exactly why homeowners new to solar sometimes get an unwelcome surprise at their first true-up if they assumed monthly credit balances told the whole story. A system genuinely sized well for annual usage can still show wide month-to-month swings, and the true-up period is where those swings finally get resolved into one clear, final number for the year.
What happens to leftover credit at true-up also varies meaningfully by program, which is worth understanding well before the date arrives. Some utilities pay out remaining credit, often at a reduced rate compared to its value during the year, while others handle it differently. Pacific Gas and Electric's own program is a real example: under California's Assembly Bill 920, PG&E pays surplus generation at a rate that has ranged from roughly 2 to 9 cents per kilowatt-hour, well below the retail rate that same energy would have offset during the year. Knowing your specific program's true-up rules ahead of time helps set accurate expectations rather than assuming credit simply carries forward indefinitely. California's solar consumer guide explains how the annual true-up settles a net metering customer's credits and charges.
Where you'll see this
The annual true up payment estimator projects your likely true-up settlement based on your system size and usage pattern.
For community solar participants, the community solar annual true up estimator works through the equivalent annual reconciliation for a shared solar subscription.
This term comes up on annual utility bills for net metering customers, in solar financial proposals explaining billing mechanics, and any conversation about how monthly credit balances ultimately get resolved into a final annual settlement. DSIRE's database of state incentives and policies lists the net metering and true-up rules that apply in each state.
Related terms
Frequently asked
Solar production varies significantly by season, with most systems producing far more in summer than winter. An annual true-up lets summer surplus offset winter shortfalls across the whole year, rather than forcing a settlement every single month that wouldn't account for this natural seasonal swing.
If your usage exceeded your accumulated credits over the true-up period, you'll typically receive a bill for the difference, usually calculated at the utility's standard retail rate for that shortfall amount, due according to the utility's normal payment terms.
This depends on the specific program. Some programs pay out remaining credit at true-up, often at a reduced rate compared to what it was worth during the year, while others may let a portion carry forward. Checking your specific program's rules clarifies what happens to unused credit.
Not necessarily the same for everyone. The true-up date is often set based on the specific date a system was first interconnected to the grid, meaning it can differ from one solar customer to another within the same utility service territory.