# Net Metering True-Up: What Happens to Unused Solar Credits

> A net metering true-up settles a year of solar credits. Unused credits pay out at a low wholesale-type rate, roll over or, in some places, expire.

- URL: https://solarexaminer.com/posts/net-metering-true-up/
- Site: Solar Examiner (https://solarexaminer.com/)
- Category: Solar Costs & Incentives
- Published: 2026-10-23
- Last verified: 2026-10-23
- Author: Craig Leslie

## Key takeaways

- A true-up is the once-a-year settlement of a net metering account: the utility adds up a year of solar credits and charges and either bills you the balance or deals with leftover credits.
- Leftover credits are usually worth much less at the true-up than during the year. PG&E pays about 2 to 9 cents per kWh in Net Surplus Compensation; New Jersey pays the supplier's avoided cost of wholesale power.
- Some states let credits keep rolling. In Massachusetts, net metering credits for typical home systems never expire and roll over to the next bill.
- Where you can pick the true-up month, ending the year after winter, not after summer, lets winter use draw down the summer bank first. New Jersey lets each customer choose once.
- A big true-up bill or a big unpaid surplus both point to a system sized off from your use. Check your monthly year-to-date figures rather than waiting for the annual statement.



A net metering **true-up** is the once-a-year settlement of a solar customer's account. The utility totals 12 months of solar credits and electricity charges, bills you for any balance, and then handles leftover credits under its own rules. Those rules vary more than most homeowners expect: some utilities pay out unused credits at a low wholesale-type rate, some roll them forward indefinitely, and some limit how long they last.

This guide explains how a true-up works and what decides whether you owe money or leave credits on the table, using published rules from California, New Jersey, Massachusetts, Florida and Rhode Island. For how generous each state's crediting is in the first place, see our [state-by-state net metering guide](/posts/net-metering-state-guide/).

## How a True-Up Works

Under net metering, the utility measures power you pull from the grid and power your panels send back. Instead of settling each month in cash, many utilities let surplus credits carry forward, then reconcile the account once a year:

1. **During the year:** each monthly bill shows that month's charges and credits. In sunny months, export credits may exceed what you used, and the surplus is banked. In darker or high-use months, the bank is drawn down.
2. **Fixed charges still apply monthly:** most utilities bill the monthly customer or base services charge every month, whatever your solar does. PG&E, for example, says each monthly statement shows "the amount due for that billing period including monthly Base Services Charge."
3. **At the true-up:** the utility adds up the year. If charges exceeded credits, you get a bill for the balance. If credits exceeded charges, the leftover is paid out, rolled over or forfeited under the tariff.

PG&E describes the final statement of the cycle as the True-Up Statement, which "provides your net energy charges and credits over the entire year and shows any final balance due."

## What Happens to Leftover Credits

The key point: solar that offsets your own use saves the retail rate, and a banked credit earns the retail rate under classic net metering or the export rate under net billing, but a credit still unused at the true-up is often paid at a much lower rate.

| Utility or state | What happens to unused credits at the end of the period | Source |
|---|---|---|
| PG&E (California, NEM customers) | Paid as Net Surplus Compensation, which PG&E says varies with wholesale prices, roughly 2 to 9 cents per kWh | PG&E |
| California Net Billing Tariff (since April 2023) | Bills are due monthly; surplus bill credits roll over to later months until the annual true-up; net surplus at true-up valued at the wholesale price of energy | CPUC |
| New Jersey (utilities and electricity suppliers) | Credits carry month to month through a 12-month annualized period; excess kWh are then paid at the supplier's avoided cost of wholesale power | N.J.A.C. 14:8-4.3 |
| Massachusetts | Credits appear as dollars on the bill and "never expire," rolling over to the next billing period (cash-out rules apply to certain cap-exempt and larger facilities) | Mass.gov net metering guide |
| FPL (Florida) | Surplus kWh are banked for future months; FPL says unused kWh left when the meter is read in December are credited to the December bill | FPL |
| City of Homestead (Florida municipal utility) | Credits can offset use for no more than 12 months; unused credits are paid in the last billing cycle of the year at the utility's average wholesale avoided cost or average generation cost | Homestead tariff filed with the Florida PSC, Sept. 2025 |

Rules as published on the dates we checked (October 23, 2026). Rhode Island Energy's pending Docket No. 26-30-EL would change how surplus from home systems is valued; see our [Rhode Island net metering coverage](/posts/rhode-island-net-metering-2026/).

### An example of what leftover credits are worth

Suppose a PG&E customer on older net metering ends the year with **600 kWh** of unused surplus. At PG&E's stated Net Surplus Compensation range of about 2 to 9 cents per kWh, that surplus pays roughly **$12 to $54** (600 × $0.02 and 600 × $0.09). Had the household used those 600 kWh itself, each one would have offset the full retail price instead. This is an illustration of the gap, not a forecast of any customer's true-up: the actual rate depends on wholesale prices for that year.

The same logic applies in New Jersey, where year-end excess is paid at the avoided cost of wholesale power, and anywhere else the payout rate is below retail.

## Why the True-Up Month Matters

Solar banks credits in late spring and summer and spends them in fall and winter. When the 12-month period ends affects how much is still in the bank at cash-out:

- **Period ending in late summer or early fall:** the bank is near its peak from summer production, so more of it is cashed out at the low year-end rate, and the new year starts with an empty bank just as production falls.
- **Period ending in spring:** winter use has already drawn down the bank, so less surplus is left to be cashed out at a low rate.

This is our reasoning from how credits accumulate, not a utility rule, and it matters most for systems sized close to or above annual use. Some utilities let you choose: New Jersey's rules give each customer-generator "one opportunity" to select the billing month that starts its annualized period, and the request can be made at any time. Others tie the period to your interconnection date or settle once a year on a fixed bill; FPL settles leftover kWh on the December bill. Ask your utility before assuming you can change it.

## Why True-Up Bills Surprise People

A large true-up bill usually has one of these causes:

- **Use grew.** A new EV, heat pump or home office can outrun a system sized to last year's bills.
- **Export credits are worth less.** Under net billing, as in California's Net Billing Tariff, exports are credited at avoided-cost values the CPUC describes as usually lower than import rates, so the same kWh exported cover less of the bill.
- **Winter.** Output in December can fall to a fraction of a summer month; our guide to [solar panels in winter](/posts/solar-panels-in-winter/) shows how much.
- **Charges solar cannot offset.** Fixed monthly charges, and some non-bypassable charges, are not reduced by export credits. See [fixed charges and solar savings](/posts/fixed-charges-and-solar-savings/).

## How to Avoid a Bad Surprise

1. **Read the year-to-date figure on every bill.** Utilities with annual true-ups typically show how you are tracking. If the balance owed is growing in winter, set money aside monthly.
2. **Size the system for your real use.** Credits you cannot use in a year are usually paid at a wholesale-type rate. Our [solar system size calculator](/solar-system-size-calculator/) helps you match production to use, including planned additions.
3. **Check where your true-up falls** and whether your utility lets you change it.
4. **Read your utility's net metering tariff**, or ask the installer to show you the sections on surplus credits, rollover and year-end payout. Make sure the savings estimate on your quote uses the same rules.

## Sources and verification

| Important claim | Source | Status |
|---|---|---|
| PG&E annual True-Up Statement; monthly Base Services Charge; Net Surplus Compensation about 2 to 9 cents per kWh | [PG&E, Net energy metering bill](https://www.pge.com/en/account/billing-and-assistance/understand-your-bill/net-energy-metering-bill.html) | Verified |
| California Net Billing Tariff: monthly billing, credits roll over until annual true-up, export values usually lower than import rates, surplus at wholesale price | [CPUC, Net Energy Metering and Net Billing](https://webtraining.cpuc.ca.gov/industries-and-topics/electrical-energy/demand-side-management/customer-generation/net-energy-metering-and-net-billing) | Verified |
| New Jersey: annualized period, monthly carryover, excess paid at avoided cost of wholesale power, one chance to choose the start month | [N.J.A.C. 14:8-4.3](https://regulations.justia.com/states/new-jersey/title-14/chapter-8/subchapter-4/section-14-8-4-3) | Verified |
| Massachusetts credits never expire and roll over | [Mass.gov net metering guide](https://www.mass.gov/info-details/net-metering-guide) | Verified |
| FPL banks surplus; unused kWh at December meter read credited to December bill | [FPL net metering](https://fpl.com/netmetering.html) | Verified |
| Homestead: 12-month limit; year-end payout at average wholesale avoided cost or average generation cost | [Homestead tariff, Florida PSC filing](https://www.psc.state.fl.us/library/filings/2025/13549-2025/13549-2025.pdf) | Verified |
| 600 kWh × 2 to 9 cents = $12 to $54 | Our arithmetic | Calculation |

## Frequently asked questions

### What is a net metering true-up?

It is the annual reconciliation of a net metering account. Over 12 months the utility tracks the value of power you imported and the credits for power you exported. At the end of that period it settles the account: you pay any balance owed, and leftover credits are paid out at a set rate, carried forward, or, under some tariffs, allowed to lapse, depending on your utility's rules.

### What happens to unused solar credits at the end of the year?

It depends on the utility. PG&E pays Net Surplus Compensation of roughly 2 to 9 cents per kWh. In New Jersey, excess kWh are paid at the avoided cost of wholesale power. FPL credits leftover banked kWh to the December bill (its page does not state the rate). In Massachusetts, net metering credits for typical home systems never expire. Check your utility's net metering tariff.

### Why is my solar true-up bill so high?

Usually because the credits earned in sunny months did not cover a whole year of use, often after higher winter or summer cooling use, a new electric vehicle or heat pump, or a rate change. Under California's Net Billing Tariff, export credits are usually valued lower than the retail rate, so the same exports cover less of the bill than they would under older net metering.

### Can I change my true-up month?

Sometimes. New Jersey rules give each net metering customer one chance to select the billing month that starts their 12-month annualized period. Many other utilities set the period from your interconnection date or use the calendar year. Ask your utility; changing it can trigger an early settlement.

### Is it better to oversize solar to build up credits?

Rarely. Credits beyond a year of use typically pay at a wholesale-type rate, a fraction of what the same kWh saves when it offsets your own use. Size close to your expected annual use, plus planned additions like an EV.


Image credit: Photo by Sergio Martins on [Unsplash](https://unsplash.com/photos/solar-panels-installed-on-a-tiled-residential-roof-VAegToqdX3A?utm_source=solarexaminer&utm_medium=referral)