A "true up" is the process by which solar customers reconcile their energy consumption with their solar production over a specified period. This reconciliation determines whether the customer owes money to the utility or has excess credits. The term "true up" essentially means "to balance out" the energy account. The frequency of true up periods varies by utility:
Annual True Up:
Definition: Under an annual true up, solar customers pay or receive credit for the net difference between the energy they've used from the grid and the energy their solar system has exported back to the grid over the course of a year.
Advantages: This system allows customers to accumulate credits during high solar production months (like summer) to offset consumption during lower production months (like winter). This can lead to substantial savings if the solar system matches or exceeds annual home energy use.
Risks: There's a potential for a significant bill at the end of the year if consumption consistently exceeds production. For instance, if a homeowner uses $100 more electricity than their solar system produces each month, they could face a $1,200 true up bill annually.
Management: It's advisable to monitor monthly statements to anticipate the annual true up. Customers can choose to pay down bills throughout the year or adjust energy use to minimize the final bill. The ideal scenario is for solar production to match or slightly exceed annual consumption, potentially leading to a zero or negative balance at true up, where credits might roll over to the next year.
Monthly True Up:
Definition: With a monthly true up, the balance of kilowatt-hours (kWh) consumed from the grid, minus the solar energy exported, is due at the end of each month.
Advantages: This method avoids the accumulation of a large annual bill, providing a clearer, more immediate view of solar benefits and costs.
Challenges: Monthly true ups might not allow for as much flexibility in using summer credits for winter usage, potentially leading to less overall savings if not managed carefully.
Sizing Recommendations: For areas with monthly true ups, it's beneficial to size the solar system slightly larger than necessary to cover peak usage months, especially in winter. This approach can help minimize monthly payments. However, utilities might have regulations on how much solar capacity can be installed, often based on historical consumption to prevent overproduction
Key Considerations:
Utility Policies: Each utility has its own rules regarding true up periods, credit rollovers, and allowable system sizes. It's crucial to understand your local utility's specific net metering or net billing policies.
System Performance Monitoring: Regularly checking production and consumption data can help manage expectations and plan for true up periods.
Energy Usage Patterns: Aligning energy use with solar production or utilizing battery storage can greatly affect the outcomes of true up bills.
Conclusion: Understanding the true up process is essential for solar system owners to maximize their investment's financial benefits. Whether you're on an annual or monthly true up schedule, strategic planning around energy consumption, system design, and sometimes battery storage can significantly influence your savings. Always consult with your solar provider and utility to ensure you're leveraging the most advantageous strategies for your situation.