As a customer care representative, we receive calls for a wide variety of reasons. One aspect about the process of going solar many homeowners find confusing is how your local utility company bills you for your electricity usage after going solar. Each utility company operates differently, but there are some consistencies. One example is ‘true-up’ billing. Today we’ll talk about what exactly a ‘true-up’ bill is, how to avoid paying a lump sum and what questions to ask your utility company about its ‘true-up’ bills.
What is a True-Up Bill?
‘True-up’ billing is defined by California utility company PG+E as, “A reconciliation of all electric usage charges and credits for the previous 12 month billing cycle.” http://www.pge.com/en/myhome/myaccount/explanationofbill/nem/trueupbill/index.page
In layman’s terms, instead of charging you monthly for your electric bill, the utility company adds up all your charges for a 12-month period and sends you a one-time, annual bill at the end of your service year.
For some homeowners, the idea of paying an electricity bill at the end of the year can be daunting compared to smaller, monthly installments.
If you prefer to pay bills monthly, rather than worrying about setting money aside for an annual bill, there may be another option.
Does Every Utility Company use ‘True Up’ Bills?
No, not every utility company uses this billing format—many will still charge you monthly bills just like before after you go solar. The easiest way to find out is to contact your utility company and ask them how their billing will work after you go solar.
We always recommend doing this so that you don’t run into any shocks or surprises at the end of the year!
When is my true-up bill due?
If your utility company does use true-up style billing, it’s good to be prepared for it.
One rather confusing aspect of ‘true-up’ billing is when the bill is actually due. A due date of the “end of the year” doesn’t necessarily mean the end of the calendar year. The end of the year may be the anniversary of when you were officially issued ‘permission to operate,’ and the utility company accepted your solar system to their power grid. For example, if you received permission to operate from the utility company in mid-April, then you should expect your 12 month true-up bill to also be due around April of each year.
Can I Avoid a True Up Bill?
The good news with the true-up bill is you can still pay it monthly. The utility company won’t tell you in your monthly statement that this bill is due, but they will tell you the amount of electricity you used for the month and what it costs. This information is usually found in a ‘true-up’ section of your billing statement.
INSIDER TIP:** One of the biggest confusions with true-up billing comes from the way that some utility companies put what is ‘due’ on the front page. They usually state an amount of $2-$3 in taxes and fees, while putting the actual amount they are charging you for your usage that month later in your bill. Most people see the $2-$3 due on the front page, think their solar system covered all their energy usage (and that they don’t owe anything), when in actuality their true power usage is listed on page 3 or 4 of that same statement. So make certain to read all pages of your utility bill carefully!
Once you find the section of your utility bill that has the actual amount of power you’ve used for the month and how much you will be billed, you can send your utility company the taxes and fees you owe plus that amount. This way, when the end of the year comes around, you won’t have to scramble to pay your 12 months all at once—you’ll have already taken care of each payment each month.
What Questions Should I Ask My Utility Company?
The two best questions to ask your utility company about your billing type and timing are:
A. Will I still receive a monthly utility bill or will I be billed a lump sum at the end of the year for the power I use?
And
B. Can I pay the actual usage charges each month even though they won’t technically be due until the end of the year? If so, what is the easiest way to submit that payment to your company?
If you still have questions after reaching out to your utility company, contact the company helping you go solar as a resource. Your solar provider should know the questions that need to be asked and can call your utility company with you to get more information.
At the end of the day, as solar providers we are here to save you money and help you utilize the benefits of clean, efficient energy. We want to make ‘going solar’ easy for you, and make the transition as simple as possible. Feel free to contact us if you have any questions at all!
