eli5: what is a true up bill?


We moved into a rental that has owned solar. I know true up is a thing, but I have no idea what it is. Or why it is.

Because it’s probably relevant, this is I’m California, and the utility is PG&E.

In: 0

True up refers to bringing a system of charges and credits back to zero after a period of time, rather than each individual billing cycle.

There’s a back and forth between you and the electric company. If your panels generate more energy than you use, the energy gets sold back to the utility company so that it doesn’t get wasted. All sorts of credits and charges involved.

The problem is the utility company doesn’t know in advance how much energy your panels will generate, so there’s not a good way to know in advance how much your bill will end up being. So basically the utility company says “You know what, we’ll assume some middle value throughout the year, and then at the end of the year we’ll do all the math to figure out who owes who how much.”

So maybe you spend $150/month on your bill, meaning $1800 over the course of the year, but because of a cloudy streak in the summer you didn’t actually generate as much energy as expected. PG&E does some math and figures out at the end of the year that you should have spent $2000 in total that year. They’ll send you an extra bill – the true up bill – to bring you back to where everyone has a net of zero charges and zero credits.