That’s your true-up. And here’s the part nobody explains when you sign: your panels can make every kilowatt-hour your house uses in a year, and you can still owe money.
Whether you’re with PG&E, SCE or SDG&E, it usually comes down to four reasons, and most of them have nothing to do with broken panels.
What a true-up actually is
Your solar gets settled up once a year. Every month, your statement shows your charges and credits adding up, but depending on your plan, a lot of that isn’t due until the end.
What you do pay every month is the fixed part, like the Base Services Charge (24.15 dollars a month for most homes). Your solar credits can’t cover that one.
Then once a year, on the anniversary of when your solar plan started, everything gets added up. If your charges were bigger than your credits, you owe the difference, all at once.
And if your city buys power through a community choice provider (like Clean Power Alliance, San Diego Community Power or MCE), you may get two true-ups: one from your electric utility company for delivery, and one from the community choice provider for the power itself, often on different schedules.
So the true-up isn’t a penalty. It’s a year of bills you haven’t paid yet.
Reason 1: the clock
This is the one that surprises people most. On most NEM 2.0 plans, your credits are counted in dollars, not kilowatt-hours. Every kilowatt-hour you send out is credited at the price for that time of day, and every one you pull back is charged at the price for that time of day.
On one of the most common plans, SCE’s TOU-D-4-9PM, summer power costs about 34 cents in the middle of the day and about 58 cents between 4 and 9 PM on weekdays.
At noon, your panels send out a kilowatt-hour and you get a 34-cent credit. At 6 PM, you pull one back and pay 58 cents. Same kilowatt-hour, and you’re 24 cents behind. Do that with 10 kilowatt-hours a day all summer, and it’s roughly 250 dollars, even though your panels "covered" every one of them.
On top of that, NEM 2.0 adds small non-bypassable charges on every kilowatt-hour you pull from the grid, about 2 to 3 cents each, and your credits can’t cover them. Pull 6,000 kilowatt-hours a year and that’s about 120 to 180 dollars.
If you’re on NEM 3.0, the gap is even bigger, because the power you send out usually earns only about 5 to 8 cents.
So "net zero" kilowatt-hours is not net zero dollars. That alone can explain a few hundred dollars.
Reason 2: the bill changed
Over roughly the last ten years, home electric rates in California went up about 5 to 7 percent a year on average (SCE +101%, SDG&E +97%, PG&E +69% from January 2016 to June 2026, per Cal Advocates). The power you still buy costs more than it did when you went solar.
To be fair, the last three years have been close to flat, and a few rates even came down a little in 2026. So rates alone usually aren’t the whole story.
And the Base Services Charge is billed monthly, so it isn’t in your true-up. But it’s the reason your monthly bills aren’t close to zero anymore, even in summer. That’s almost 290 dollars a year your panels can’t touch.
Reason 3: your house changed, but your system didn’t
Your system was designed for the house you had back then. Since then, maybe you got an electric car, added AC to a room, started working from home, or more people moved in.
An electric car alone adds about 3,000 to 4,000 kilowatt-hours a year. On a lot of homes, that’s a third more power than the system was built for.
And sometimes the system was too small from day one. Some older systems were only designed to knock out the most expensive part of an old tiered bill. That’s called tier shaving, and a lot of those homeowners were never told there’d still be a true-up.
Reason 4: your panels made less than they should
A failed inverter, a tree that grew into your sunlight, or a monitoring app that went offline and nobody noticed. An inverter that’s down for three summer months can cost you more than any rate increase.
Panels also lose a little every year, about half a percent. That’s normal, but it adds up over ten years.
The 10-minute check: which reason is yours?
You need three things:
- Your true-up statement. Find the section that breaks down usage by time of day. If you’re a big net user between 4 and 9 PM and a big exporter midday, that’s reason 1.
- Your monitoring app. Compare what your system made this year to last year, or to the estimate in your contract. If it dropped, that’s reason 4.
- Your online account with your electric utility company (or your true-up statement). Look at your 12-month net usage in kilowatt-hours. Your meter already subtracts what you sent out from what you pulled in, so don’t subtract your solar again. If it’s zero or less, your panels made enough for the year, and the problem is timing (reason 1). If it’s above zero, your home used more than your system made. That’s reason 3, or reason 4 if your app showed a drop.
What to do about it
If production dropped: you need a repair, not a new system. If you lease your system, the company is usually responsible for repairs, and many contracts have a production guarantee. Call them first.
If it’s the clock: move what you can out of 4 to 9 PM. Cool the house before 4, run the dishwasher and laundry after 9, and charge the car overnight.
If your house outgrew the system: be careful how you add to it. On NEM 1.0 or 2.0, you can only add 1 kilowatt or 10 percent, whichever is bigger. Go over that, and your whole system moves to NEM 3.0. A separate system that doesn’t send power to the grid can add what you need and keep your plan. With the options I offer, that’s done through a prepaid lease. A zero-down lease add-on is also an option, but it moves the whole home to NEM 3.0, so I design it with a battery.
A battery by itself keeps your plan too, and it can move some of your midday power into the evening. But a battery can’t store power your panels never made.
Whatever the reason, stop letting it pile up. Ask your electric utility company if you can pay your solar charges monthly (SCE calls it the Monthly Billing Option). If not, set money aside every month, or ask for a payment arrangement when the true-up comes.
To be fair, a small true-up isn’t always a problem. If your system was built to cover about 100 percent of your usage, a few hundred dollars can just be the clock and those small grid charges. The goal isn’t a zero. It’s no surprises.
