There are two fields in Aurora financings - Billing Frequency and True-Up Frequency, which dictate how a customer’s credits for excess solar production are handled. Aurora tracks both the energy charges and credits that a customer builds up over the course of a month and a year, as well as the net amount of energy produced or consumed for net surplus compensation.
Billing frequency can be set to either Monthly (default) or Annual. This is used to show how often a customer has to pay their energy charges. Most customers have Monthly billing frequency and will pay each month. If the customer has an Annual billing frequency, they will pay the sum of their energy charges and credits at the end of their True-Up period
True-Up Period determines how often a customer’s bill credits and charges are reconciled and when excess kWh is compensated for at the net surplus compensation rate. Most NEM programs use an Annual True-Up period. Each year at the specified month, any leftover credits are lost, and any excess energy is credited at the Net Surplus Compensation Rate. The month is sometimes specified by the utility, often the end of December or the end of March, or it’s based on when the system is given permission to operate by the utility. Some NEM programs have a Monthly True-Up Period - any charges are paid each month like a regular, non-solar customer, any energy credits are lost and can’t be applied to future months, and any excess kWh is compensated at the wholesale Net Surplus Compensation Rate.
How the combinations work:
Monthly Billing Frequency / Annual True-Up Period:
Customers with a Monthly billing frequency will pay any accrued energy charges at the end of a month, but if they have billing credits from excess energy production, the credits will be passed to future months. At the end of the specified True-Up period, any remaining credits are expired. The customer may receive Net Surplus Compensation if they offset more than 100% of their energy usage for that year, based on the low Net Surplus Compensation rate.
Annual Billing Frequency / Annual True-Up Period:
Customers with an Annual billing frequency will just pay any applicable fixed and minimum utility charges each month, until the end of their True-Up Period. At this point, any remaining energy charges are due - sometimes this will be a large bill and customers may be caught by surprise. If the customer has more energy credits than charges for the whole year, they just pay the monthly minimum and fixed charges for the year. The customer will also receive Net Surplus Compensation if they offset more than 100% of their energy usage for that year, based on the low Net Surplus Compensation rate.
Monthly Billing Frequency / Monthly True-Up Period:
Customers with Monthly billing and a Monthly True-Up Period will pay any accrued energy charges at the end of a month, and will also lose any accrued credits at the end of each month. If their PV system has produced more energy than they used, they will receive Net Surplus Compensation based on the Net Surplus Compensation Rate. This is common for utilities that don’t offer net metering policies and read meters on a monthly basis.