What Is a True-Up Bill? The Solar True-Up Explained for SCE, SDG&E and PG&E Customers

Your true-up date is the annual anniversary of your solar system's interconnection — and what you actually pay on that date depends entirely on which tariff you're on. Under legacy NEM 1.0 or NEM 2.0, energy charges and credits roll across the full 12-month cycle and settle in a single statement; under the newer NEM 3.0 Net Billing Tariff, you pay energy charges every month and the year-end statement mainly reconciles unused export credits. Either way, fixed charges — service charges, minimum charges, the Base Services Charge — are due on every monthly statement regardless of how much solar you produced.

Last verified: October 2026 by Helios Energy Global.

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How the 12-month cycle works

Every residential solar customer on SCE, PG&E or SDG&E is assigned a 12-month "relevant period" that starts on the day their system first interconnected to the grid. Your true-up is tied to your NEM interconnection anniversary date — the date your system was first connected to the grid. That date rarely changes unless you add generation capacity or switch tariffs.

Throughout the year your meter measures two flows: electricity you pull from the grid (imports) and excess solar you push back (exports). The net energy usage during each billing period appears as either a credit or a charge on your NEM Electric Statement, and these credits and charges are carried forward month to month for 12 billing cycles.

The final amount is reconciled on your annual True-Up Statement.

What "reconciled" means in dollars depends on your tariff — covered in the next section.

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NEM 1.0 and NEM 2.0: the annual-billing model

Under the Annual Billing Option (ABO), fixed fees are still billed monthly, but total energy usage charges are calculated once at the end of a twelve-month cycle in what SCE calls a Settlement Bill or True-Up Bill. PG&E and SDG&E use the same structure for legacy NEM customers.

Annual billing is often preferred by solar customers because it lets energy credits earned during high-production months, such as summer, offset usage during lower-production months, such as winter — though this advantage primarily benefits customers still on NEM 1.0 or NEM 2.0.

What you pay every month on NEM 1.0/2.0:

• Fixed charges — service charge, minimum charge, or Base Services Charge (these cannot be offset by solar credits)
• Non-bypassable charges — small per-kWh charges that fund public programs; non-bypassable charges cannot be offset with solar credits regardless of your billing option or NEM version

What settles at the 12-month true-up:

• The net of all energy charges and credits accumulated across the year
• Any Net Surplus Compensation if you over-produced for the full cycle (see below)

On your monthly statement, look for a running "cumulative NEM balance" or "year-to-date charges" section — that number is your live true-up tracker. All energy charges, the charges that are calculated on a per-kWh basis, will be tracked and paid on an annual basis, reflected in your annual True-Up Bill.

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NEM 3.0 (Net Billing Tariff): monthly billing, annual credit settlement

All residential solar systems connected to SCE after April 14, 2023 are placed on the Solar Billing Plan, commonly called NEM 3.0 or net billing. The same April 2023 cutover applies to PG&E and SDG&E.

Under NEM 3.0 the billing model flips: Net Billing Tariff (NEM 3.0) customers pay bill charges monthly and carry unused credits to the annual true-up — so they are not hit with a whole year of net imports in one statement.

What you pay every month on NEM 3.0:

• Fixed Base Services Charge (cannot be offset)
• Energy charges for grid power you imported, priced at your time-of-use rate
• Any net balance after applying that month's export credits

What reaches the annual true-up:

Export credits earned each month roll forward to subsequent months to offset future charges

• At the 12-month mark, any remaining unused export credits are reconciled and any Net Surplus Compensation is calculated

Why exports earn so little under NEM 3.0: For PG&E, SCE and SDG&E customers applying in 2026, exported solar earns about 3.7 to 4.6 cents per kWh on average, roughly a tenth of what electricity costs to buy. Specifically, for 2025 and 2026 applicants, the average export credit is about 3.9 cents per kWh on PG&E, 4.6 cents on SCE and 3.7 cents on SDG&E, with hourly values that vary by season and time of day. That rate asymmetry is why self-consumption — using your solar power as you make it — matters so much more than exporting it.

For a deeper dive into how NEM 3.0 changes the economics of solar, see our guide NEM 3.0 explained.

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Utility-by-utility breakdown

Utility	Tariff for new systems	Monthly bill includes	What settles at true-up	Avg. retail rate
SCE	NEM 3.0 / Net Billing Tariff	Energy charges + Base Services Charge	Leftover export credits, Net Surplus Compensation	~34–35¢/kWh
PG&E	NEM 3.0 / Solar Billing Plan	Energy charges + Base Services Charge	Leftover export credits, Net Surplus Compensation	~40–41¢/kWh
SDG&E	NEM 3.0 / Net Billing Tariff	Energy charges + minimum charge	Leftover export credits, Net Surplus Compensation	~46¢/kWh
Legacy NEM 1.0/2.0 (any IOU)	NEM 1.0 or 2.0	Fixed charges only	Full 12-month net energy balance	Same retail rates
LADWP (municipal)	LADWP NEM Rider	Net energy charges each billing period	No standard annual true-up; credits roll forward	~28¢/kWh effective

Rates are estimates based on 2026 tariff filings. SCE peak (4–9 PM) charges run ~48–58¢/kWh. Always verify current charges on your utility's rate page.

SCE

Under NEM 3.0, SCE does not settle your solar account every month. Instead, the utility issues monthly statements that track your energy usage, solar production, and net position, but the actual financial settlement — where money changes hands for your 12-month net energy balance — happens once per year on the anniversary of your system's interconnection date.

SCE charges all solar customers a Minimum Daily Delivery Charge of roughly $0.37 per day, which adds up to about $11 per month. This fee covers grid infrastructure and cannot be offset by solar production. On top of that, if you consumed more grid energy than you exported in a given month, you pay the difference. Months where your exports exceed your imports result in a net credit that carries forward toward your annual true-up.

SDG&E

SDG&E's own NEM billing page explains the cycle plainly: at the end of every 12-month cycle, SDG&E sends an annual "true-up" statement. This is when any outstanding balance you owe for the year is due. Because your NEM bill balance can be positive or negative month to month, depending on your usage and the output of your renewable system, the "true-up" process is a simple way to zero out your balance annually.

On leftover credits: the retail value of excess generation is only applicable to offset charges for energy within your True-Up period. At True-Up, any remaining excess generation will be purchased by SDG&E at the wholesale rate. In other words, over-producing all year earns you a small wholesale-rate payout — not retail value — for any surplus that remains after all charges are zeroed out.

PG&E

Per PG&E's Solar Billing Plan page: as a Solar Billing Plan residential customer, you'll receive monthly billing statements and an annual True-Up statement.

The PG&E NEM bill explainer describes what appears on each: you'll get a NEM statement every month with an account summary that includes the current electric monthly charge for connecting to the grid, which is paid monthly; any gas charges, if applicable; and your year-to-date NEM charges, which will be paid at your annual True-up.

At year-end: after 12 months, your monthly net energy charges and credits are reconciled in an annual True-Up statement. Any remaining charges must be paid and any excess surpluses are typically reset to zero.

The True-Up statement covers all your energy charges and credits, plus any Net Surplus Compensation for the entire 12-month billing cycle.

If you are a PG&E customer who receives electricity supply from a Community Choice Aggregator (CCA) such as MCE, East Bay Community Energy, or Peninsula Clean Energy, note that Net Surplus Compensation credits may vary if you receive energy from a Community Choice Aggregator, because CCAs buy energy for certain cities or counties while PG&E delivers the energy to your property. Your CCA will conduct a parallel generation settlement — see our guide to CCA vs. SCE: what LA solar owners pay for how that split works.

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What happens to leftover credits: Net Surplus Compensation

If your system over-produced across the full 12 months — more kWh exported than imported — you may be eligible for Net Surplus Compensation (NSC). On PG&E, the True-Up statement shows this automatically: if you send more energy to the grid than you received, you are eligible for net surplus compensation credits, shown as a negative number in the total amount due.

The catch: NSC pays at a low market-based rate, not retail. Any excess energy credits for the True-Up period will not be applied to your next True-Up period. The net metering program was designed by the legislature for systems sized to customer load on an annual basis; currently approved tariffs and legislation provide that no credit be carried forward to the next True-Up period.

On PG&E, leftover exports become Net Surplus Compensation, which PG&E describes as roughly two to four cents per kWh and the CPUC pegs at about two to three cents under D.11-06-016. The practical lesson: size your system to cover roughly 100% of annual usage — not significantly more — so you maximize retail-rate self-consumption and don't give away surplus power at wholesale prices.

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Municipal utilities: a different world

NEM 3.0 applies to PG&E, SCE and SDG&E. Municipal utilities such as LADWP and SMUD set their own rules. Southern California's municipal utilities include LADWP, Pasadena Water and Power, Burbank Water and Power, Glendale Water & Power, Anaheim Public Utilities, and Riverside Public Utilities. None of them are on the CPUC's Net Billing Tariff. For details on how each program works, see our net metering guide for municipal utilities.

LADWP

LADWP is the largest municipal utility in the U.S. and the one most relevant to our Southern California customers. Under LADWP's current net metering rider, customers receive bill credits at their applicable retail rate for every kilowatt-hour they send to the grid. Those credits never expire and roll forward month to month against future bills.

Under LADWP's Net Energy Metering rider, your meter simply nets kWh out against kWh in over the billing period, and any surplus is credited at your applicable rate schedule's own pricing — your retail rate, not a discounted "avoided cost" rate. LADWP bills on a bi-monthly cycle rather than monthly, so your net position is calculated over each two-month billing period. There is no standard annual true-up event the way SCE and PG&E run one; credits roll forward indefinitely. Per LADWP's own NEM guidelines, LADWP will apply any credit balance to charges under each subsequent bill except taxes and minimum charges until no further adjustment is due to the customer. If a credit balance remains at the time when the customer terminates service, the balance will automatically be adjusted to zero and the customer shall be owed no further compensation for excess generation.

The effective LADWP rate runs approximately 26–31¢/kWh all-in, and because credits are at retail, while Southern California Edison and PG&E customers now receive roughly $0.08 per kWh for solar exports under NEM 3.0, LADWP customers still earn credits pegged to the retail rate they would otherwise pay. For more on how LADWP solar exports and billing compare to SCE, see our guide on selling solar power back to the grid in California.

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Why your first true-up can be a surprise

The most common shock is a large balance on the first true-up after going solar. Several things drive it:

1. System sized below actual usage The system was designed around historical usage, but your household's consumption grew — a new EV, a heat pump, a home office, or an added family member. If you added an EV after your system was sized, you may be importing thousands of extra kWh per year that your panels don't cover.

2. New EV or heat pump Both can double or triple a home's electricity use. An EV charging overnight adds load entirely outside solar production hours, directly inflating your import balance.

3. Winter production shortfall

By paying annually, you may see that you build up a balance in the winter months, when you're likely to use more energy from the grid because your system is taking in less sunlight and producing less electricity. A system that looks perfectly sized in July can run a significant deficit from November through February.

4. The 4–9 PM peak problem (SCE and PG&E customers) On NEM 3.0, every kWh you pull from the grid between 4 and 9 PM costs you ~48–58¢/kWh on SCE — while any solar you exported at noon earned only ~4–5¢/kWh. That rate gap accumulates all year and lands in your true-up.

5. A failed inverter or shaded string

A strong spring can mask a weak December until the annual bill arrives. If one string of panels was shaded by a new tree or a microinverter failed mid-year, you may not notice until the true-up reveals a production shortfall. Check your monitoring app for any months where production dropped unexpectedly.

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How to shrink your next true-up

Shift load out of 4–9 PM

Run the dishwasher, laundry, and EV charging before 4 PM or after 9 PM. On SCE's TOU-D-PRIME, the difference between a peak-hour import (~48–58¢/kWh) and an off-peak import (~28–30¢/kWh) is substantial. Shifting 5 kWh per day out of the peak window can reduce your annual import cost by several hundred dollars.

Add a battery so midday solar covers the evening

A home battery charges from your panels during peak production (roughly 9 AM–3 PM), then discharges through the 4–9 PM peak window. On SCE's NEM 3.0, that displacement of peak imports — which would otherwise cost ~48–58¢/kWh — is where most of a battery's economic value comes from. See our battery storage page for current system pricing and options.

Check for a failed inverter or shaded string

Pull your system's production data month by month and compare it against the original production estimate your installer provided. A sudden dip — or a string that's consistently underperforming — is a sign of a hardware issue or new shading. Catching it mid-year saves you from compounding the loss through the rest of the 12-month cycle.

Resize if usage grew significantly

If you added an EV, heat pump, or expanded your home since the original system was designed, the math may simply not work anymore at the original system size. A custom design and savings analysis can show you whether adding panels closes the gap or whether a battery alone is the better investment.

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Frequently asked questions about solar true-up bills

When does my true-up happen?

Your true-up date is the anniversary of your solar system's interconnection date — the day your utility officially turned on your NEM or Net Billing account. It is unique to your household and does not align with a calendar year. SCE, PG&E and SDG&E each send a settlement or true-up statement at that 12-month mark.

Will I always owe money at true-up?

Not necessarily. If your system produced more than you consumed over the 12 months, you may receive a small Net Surplus Compensation credit rather than a bill. However, NSC is paid at a low market rate (roughly 2–4¢/kWh on PG&E; wholesale rate on SDG&E), so even a surplus year rarely results in a meaningful check. Most well-sized systems land close to zero at true-up, with a small balance either way.

Why do I still get a monthly bill if I'm on annual billing?

Under the Annual Billing Option, fixed fees are still billed monthly, but total energy usage charges are calculated once at the end of a twelve-month cycle. That means your service charge, Base Services Charge, non-bypassable charges, and any gas charges are due every month — only the energy component defers to the annual settlement.

Does NEM 3.0 mean I get one big bill at the end of the year?

No — that's the key difference. Legacy NEM 1.0 and NEM 2.0 may use annual billing, with charges and credits rolling over the 12-month cycle and settling at true-up. Net Billing Tariff (NEM 3.0) customers pay bill charges monthly and carry unused credits to the annual true-up — so they are not hit with a whole year of net imports in one statement.

What happens to my credits if I switch to a CCA?

If you're on SCE or PG&E and your city joins a Community Choice Aggregator, your NEM account continues with the IOU for delivery charges, but the CCA handles generation. As a joint SCE/OCPA customer, for example, you are switched to monthly billing and have an annual true-up in April for the generation portion of your bill. Each CCA sets its own true-up date and credit rules — check with your specific CCA for the details. Our guide on CCA vs. SCE: what LA solar owners pay covers how the split billing works.

Does LADWP have an annual true-up?

Not in the same way SCE and PG&E do. LADWP bills bi-monthly and credits excess solar at the full retail rate each billing period, with credits rolling forward to subsequent bills. There is no formal annual settlement event — your credit balance simply carries forward indefinitely until you use it or terminate service. For more on how LADWP solar billing works, visit our net metering guide for Southern California municipal utilities.

Can I avoid a big true-up bill by going solar with a battery?

A battery significantly reduces the risk of a large true-up on NEM 3.0 by letting you use your own midday solar during the expensive 4–9 PM window rather than buying from the grid at peak rates. It doesn't eliminate the true-up — fixed charges and non-bypassable charges still apply — but it addresses the main driver of large year-end balances for NEM 3.0 customers. See our solar vs. battery under NEM 3.0 guide for a side-by-side comparison.

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Next steps

• Book a free consultation and custom design — we'll model your 12-month production and import balance before you sign anything
• Explore battery storage options and pricing — see how a Powerwall 3 or Enphase IQ Battery changes your true-up math
• Run a custom design and savings estimate — see your projected true-up balance under your specific utility and tariff
• Read the NEM 3.0 rules in full — the complete guide to how the Net Billing Tariff works
• Understand what selling back to the grid pays — export rates, Net Surplus Compensation, and LADWP vs. SCE compared
• See all Southern California service areas — Helios serves SCE, LADWP and SDG&E territory across the region