Once you decided to go solar, your relationship with PG&E changed. Instead of receiving a monthly bill for your energy use, you’re now receiving an annual statement called a True-Up Bill. This bill is sent at the end of each solar billing cycle, which occurs at the end of your first year as a solar customer. Because solar production changes throughout the year, some months you will produce excess energy (requiring a credit), and other months you will pull energy from the grid (requiring a charge). To simplify, PG&E sends one bill each year summarizing your annual electricity charges and credits. The goal is to be at net zero at the end of the year. If you’ve received your first True-Up Bill and it’s considerably more than expected, read on to examine why it might be so high and what you can do to decrease or eliminate your true-up costs.
How Is My True-Up Bill Calculated?
Before we can discuss how to decrease or eliminate your true-up costs, it’s helpful to understand how your PG&E True-Up Bill is calculated. To start, all utility customers have a meter that calculates how much power you use and when, so PG&E can bill you appropriately. As a solar user, you can receive power from both your solar panels and the grid. If your solar panels generate more power than your home needs, you can also send power back to the grid. Your bill is then calculated like this:
Basically, during those high production months when your solar panels are generating more energy than your home needs, the energy that your home sends back to the grid is noted as a credit for you to use in the future. That means your net energy will be a negative number. However during the low production months, your home may need to consume some electricity from the grid. This means your net energy will be a positive number, and any energy credits you have saved will be applied at the retail rate.
On your bill, there will also be a monthly charge for grid usage and connection fees. You’ll see your monthly net energy usage (showing as either a charge or a credit), and at the end of your annual cycle, the balance due is your True-Up bill. The bill will include all of the following information:
- The electricity produced by your solar system over the course of the year (measured in kilowatt-hours, or kWh)
- The amount of electricity you used throughout the year
- How much electricity was used and credited
- The retail electricity rate used to value your kWh credit accrued
- The total amount owed to PG&E
How Much Does PG&E Pay For Solar Power?
Now that you know how your PG&E True-Up is calculated, let’s look at how much PG&E pays for solar power. To start, a solar system will typically generate electricity at $0.02 – $0.12 kWh depending on site conditions and financing, which is well below PG&E’s Tier 1 cost of energy of $0.26 per kWh. Suppose your solar system is producing more than 100% of your annual usage. In that case, you’re a Net Surplus Generator, which means that instead of earning retail rates for the power you send back to the grid, you’re only getting the wholesale rate for the excess energy: $0.04 per kWh. This means PG&E is able to pay you out at the much lower wholesale rate so that you’re receiving a smaller credit toward your account as a result.
Unfortunately, since PG&E owns the grid, they don’t want homeowners to become too powerful and sell all their excess power back. That’s why California’s Public Utilities Commission (CPUC) is looking to pass the NEM 3.0 program, which will decrease the solar benefits for customers and in many cases, render it unaffordable.
But don’t despair! There are solutions available to help ensure that you’re maximizing your solar system and lowering – or eliminating – your True-Up Bill. There’s also work being done to save California solar, and ensure it remains affordable and beneficial for consumers.
Why Is Your True-Up Bill So High?
You’ve received your True-Up Bill, and it’s higher than expected. Here are a few of the potential causes:
Fixed Fees and Charges
As we noted in our section about how your True-Up Bill is calculated, there are some monthly fees and charges that are built into the cost of your solar system. These include:
- Monthly fee for your connection to the grid
- Non-bypassable charges per kWh: which funds energy efficiency, low-income customer assistance, nuclear-decommissioning , and is somewhere between $0.02 – $0.03 per kWh
When your solar system is installed, the size of the system is calculated based on the previous 12-months of electricity usage. So your system is built to offset no more than that amount of electricity used. If your electricity use increased from that initial 12-month usage estimate – for example, maybe you’ve installed a pool or switched from working in an office to working from home – you may be surprised with a larger True-Up Bill as a result.
How To Decrease Or Eliminate Your True-Up Bill
We understand how frustrating a high True-Up Bill can be. Here are a few possible solutions:
Add More Solar Panels
As we noted above, if you’ve increased your electricity usage, it may make sense to increase the number of solar panels to maximize your savings. This will help offset your additional usage and decrease your annual True-Up Bill as a result.
Add Battery Storage
When your solar system is combined with battery storage, you’ll have a system capable of delivering power when it’s most valuable – day or night, or during utility power outages. A battery storage system will also reduce your carbon footprint. Basically, instead of sending all your power back to the grid, your battery will store the excess power your panels produce. That stored energy will then power your home at night or during peak hours when electricity is most expensive, allowing you to avoid high time-of-use charges and PG&E rate hikes.
If you need help decreasing or eliminating your high True-Up Bill, our team can help!