SCE Annual Settlement Bill: What It Is, Why It Is Big and How to Read It

An SCE settlement bill, which SCE calls the Annual Settlement Statement, closes out each 12-month cycle for net energy metering (NEM) solar customers. On SCE's default Annual Billing Option, the whole year's net energy charges come due on it at once. Leftover credit is paid at the Net Surplus Compensation rate, $0.01825 per kWh for cycles ending September 2026.

That is why the same household can pay very little for eleven months and then get one large bill. This page explains what the statement adds up, how to read it and how to avoid the surprise next year. It covers SCE's NEM customers; newer solar customers on the Solar Billing Plan pay monthly, as explained below. For the bigger picture on high bills, see our guide to high California electric bills.

What the settlement bill adds up

Each month, SCE subtracts the credit for power your system sent to the grid from the charges for power you took from SCE. That difference is your net energy charge or credit for the month. Credits roll forward to offset later charges. On the Annual Billing Option, you pay only the set fees each month, labeled Delivery or Nonbypassable charges, and SCE carries the net energy balance. At the end of the 12 months, the Annual Settlement Statement totals it all:

• If you used more than you produced, in dollar terms, you owe the balance in full.
• If you end with unused credit and opted in to Net Surplus Compensation, SCE pays it as a bill credit or a check at the NSC rate.
• Either way, the net energy balance resets to zero for the next cycle.

Your monthly bills already show where you are headed. SCE lists the Year-to-Date Charges on the first page for Annual Billing customers, which is the amount due at the end of the cycle if nothing changes.

An illustration of how the balance builds

The numbers below are made up to show the pattern, not SCE data. A home earns net credits in spring, when the panels produce a lot and the air conditioner is off, then runs net charges in summer evenings and in winter.

July through September does the damage. On SCE's TOU-D-4-9PM plan, summer weekday energy from 4 to 9 p.m. costs about 58 cents per kWh, against about 34 cents at other hours, and that is exactly when panels taper off and air conditioning runs hardest.

How much SCE pays for surplus at true-up

If you produce more than you use over the full year, the leftover is paid at the Net Surplus Compensation rate. SCE sets it monthly from a day-ahead wholesale price, and the rate that applies is the one for the month your 12-month cycle ends.

At $0.01825, 500 kWh of surplus pays about $9.13, our arithmetic. The same 500 kWh used at home instead of bought from SCE would have been worth far more. That gap is why a system sized well beyond your yearly use earns little for the extra panels, and why a credit balance is worth more used at home than carried to settlement.

How to avoid a surprise next year

• Switch to the Monthly Billing Option. SCE lets NEM customers pay net energy charges every month, which spreads the cost and leaves little for the settlement.
• Watch Year-to-Date Charges. If the number climbs through summer, set aside money or change habits before the cycle ends.
• Move big loads into solar hours. SCE suggests running major appliances and pool pumps from 8 a.m. to 2 p.m., when your system is producing.
• Account for new load. SCE notes an EV or a pool raises use, and a system not sized for it means buying more from SCE.
• Consider storage. SCE lists a battery as a way to keep more of your own power for the evening.

If you cannot pay the settlement in full, SCE says payment plans, bill support and financial assistance are available to customers who qualify. Ask before the due date.

If a community choice provider is on your bill

SCE says a NEM customer served by a community choice aggregator has generation credits and charges administered by the CCA, even though they still appear on the SCE bill with SCE's set fees. Timing can differ from SCE's. Desert Community Energy, for example, says it runs its own true-up, at the end of May for most of its NEM customers. Ask your CCA how and when it settles.

Solar Billing Plan customers: monthly, not annual

Systems that applied after the net billing tariff took effect are on SCE's Solar Billing Plan and must take TOU-D-PRIME. The CPUC says those customers pay their bills monthly so they are not surprised by a large annual bill; export credits still roll over for 12 months and true up once a year. The SCE guide to how the Solar Billing Plan settlement and EEC Adjustment work explains that annual bill line by line. The differences are laid out in net billing vs. net metering and NEM 2.0 vs. NEM 3.0, and what exports earn is covered in what utilities pay per kWh for solar exports.

For settlement bills at other utilities, see the California true-up bill explainer. For why a solar home still gets a monthly SCE bill, read whether you still get a utility bill with solar; for SCE's plans and prices, see SCE rate schedules and why an SCE bill runs high; and to judge whether a battery would pay, the battery payback guide.