As of January 1, 2024, the previous net settlement for newly installed solar panels has been phased out and gross settlement has been introduced instead. This is a significant change, as the way the electricity grid is settled affects how large a solar panel system should be installed and how the generated energy can be used most efficiently.
Balance vs. gross settlement – What's the difference?
Net billing (also known as net metering) allowed the home solar system to use the electricity grid as a kind of energy storage. The excess energy produced by the system, for example in summer, was fed into the grid and the same amount was withdrawn later, for example in winter or at night.
The settlement was done on an annual basis: at the end of the year, the electricity supplier summed up the energy fed into the grid and the energy taken from it, and settled the difference. If the solar panels covered the consumption on an annual basis, the electricity bill could even be zero. This system was beneficial to consumers, as the excess production in summer and the consumption in winter were balanced. However, it was less beneficial for service providers, as in this construction, the system usage fees and other costs were minimal.
In contrast, in gross settlement, energy fed into and taken from the grid is treated separately, with separate pricing. The electricity supplier purchases the energy produced but not immediately consumed at a fixed price – currently around 5 HUF/kWh – while the full price must be paid for electricity taken from the grid. This is on average ~36 HUF/kWh for residential consumption, and can be up to 70 HUF/kWh in the higher range.
The bill shows the purchased and fed-in quantities on separate lines, and the credit is much smaller than the portion to be paid. So even though the system produces as much energy annually as the house consumes, the bill does not go to zero – there is a significant difference between the value of the fed-in and repurchased electricity.
In summary:
- The balance system applied an annual balance and practically equalized the difference between production and consumption.
- The gross system treats production and consumption separately, and there is no balancing – this brings fundamentally new design and economic aspects to solar systems.
What impact does gross billing have on system sizing?
With the introduction of gross billing, it is necessary to consider how large a solar system should be installed. Previously, during the balance period, a general design principle was that the annual production of the system should cover the entire annual consumption of the household – this was how the break-even state could be achieved. For example, if a household consumed 5,000 kWh of energy per year, a solar system with a capacity of approximately 5 kW (with an annual production of ~5,000–5,500 kWh) proved to be sufficient to zero out the electricity bill. However, with gross billing, such a large system may already be considered financially oversized, because during the summer period it will feed significant energy into the grid, for which it will only receive a minimal fee.
A family house with a solar panel system installed on the roof. Due to gross billing, it is now more important to use the energy produced within the house, not feed it back into the grid.
For an average user – if he sizes his solar system to his full annual demand – he can consume approximately 40% of the solar energy produced immediately, locally, while 60% is sent to the grid as surplus. In the previous netting system, he “received” this later for free, but in gross settlement, he sells the 60% excess production at a price of only 5 HUF/kWh, and then buys back a similar quantity at a high price later. As a result, the return on the excessively large system deteriorates significantly. Even though, for example, a 5 kW system produces ~6250 kWh of energy per year (which could cover the consumption of a 4-5 person household), the household’s annual electricity bill still remains significant due to gross settlement. With specific calculations: in the case of a 5 kW system, ~2500 kWh is used directly, and ~3750 kWh is charged to the grid. For the charged energy, approx. They receive a credit of 18,750 HUF per year, but for ~3,750 kWh taken from the grid, they have to pay approximately 135,000 HUF (at an average price of 36 HUF/kWh). The annual electricity cost thus remains ~116,000 HUF in this example, even though the system produced the entire amount of consumption. This results in an annual saving of approx. 235,000 HUF, and an investment of ~2.5 million HUF would pay off in ~10.6 years. It can be seen that gross settlement results in a longer payback period compared to the balance, especially if the system produces a lot of surplus to the grid.
It follows from all this that in gross settlement, a system with typically lower power can be sufficient for a good return than what would have been required at the time of the balance. For example, if a household's annual consumption is 5,000 kWh, it may only be worth installing a ~3–4 kW solar system with the current settlement. A system of around 4 kW produces ~4,000–4,500 kWh per year, which covers most of the consumption, but at the same time produces extra to the network in fewer periods. This way, the household can use a larger proportion of the electricity produced immediately and "waste" less at a price of 5 HUF. The electricity bill will remain slightly higher (because they need to take some power from the network), but the investment cost is also lower and each kWh produced represents a greater value within the household. Of course, the optimal size also depends on individual factors: your consumption patterns, peak season distribution, roof orientation and future expansion plans. However, in general, it is not advisable to install a system that is too large for gross billing simply to generate a summer surplus.
Practical example of an average household
Let's take a specific example of an average Hungarian household with an annual consumption of approx. 4500 kWh. In the case of a balance settlement, this consumption could be covered on an annual basis by installing a solar panel system with an output of approx. 4–5 kW, so the electricity bill could approach zero. In the case of a gross settlement, however, if a system of the same size (say 5 kW) is installed, a significant part of the production is not immediately utilized due to the aforementioned reasons. In the summer months, the system can feed up to 700–800 kWh of surplus into the grid per month, while in the winter it still relies on the grid. The household consumes ~4500 kWh on an annual basis, and the 5 kW system produces ~5500 kWh. The difference (~1000 kWh) is quasi-sold for 5 HUF (~5000 HUF income on an annual basis), while the missing energy in winter is purchased at market price (e.g. 1000 kWh × 36 HUF = 36,000 HUF). In addition, due to the temporal differences in production and consumption, additional purchases are required: the energy fed into the network in summer is not “stored for free” for winter. As a result, the household’s electricity bill decreases from, say, a net ~0 HUF to a gross ~100,000 HUF/year, but it does not disappear completely.
If the same household installs only a 3 kW system (which produces ~3300 kWh per year), then the summer feed-in will be much smaller, because the system's output rarely exceeds the house's consumption. Most of the 3300 kWh production can be used, only a smaller part goes to the grid. The annual electricity bill in this case remains higher (about 1200 kWh of electricity still has to be purchased from the grid at full price), but the cost of the solar system is also lower, and the electricity produced almost entirely replaces grid consumption at a value of 36 HUF/kWh. To put it simply: the smaller system operates more efficiently for its own consumption, while the larger system produces more surplus and sells it cheaply. The optimal choice is often somewhere in between – for example, a system of around ~4 kW – which significantly reduces grid consumption, but does not produce a disproportionately large surplus.
It is important to highlight that the optimal sizing may vary from person to person. For example, if there are few people at home in the household during the day (so consumption is more in the evening and on weekends), then it is worth choosing a smaller system. However, if someone works from home, or operates electric heating (heat pump) and air conditioning during the day, or charges an electric car, then daytime consumption is high, so a larger system can also be well utilized. Ideally, the production curve of the solar panel system matches the daily consumption curve of the house, so that as little as possible is wasted. This goal can also be served if the household starts a few larger consumers – such as a washing machine, dryer, dishwasher – on a timed basis, during the sunny hours. In this way, a larger proportion of the energy produced is used immediately, not sent to the grid.
What to consider when designing? – Inverter, oversizing, battery
Inverter selection and system sizing
The solar inverter is the heart of the system, which converts the direct current produced by the panels into alternating current and feeds it into the household network. The inverter power must be carefully selected when sizing the system. As a general rule, the nominal power of the inverter should be adjusted to the total power of the installed solar panels. A certain amount of oversizing is permissible and common: for example, a 5 kW inverter can be connected to up to 5.5–6 kW of solar panels. This allows for maximum off-peak production, as the panels rarely reach their nominal peak power at the same time (cloudy weather, angle loss, etc.). In gross billing, moderate oversizing can also have a special advantage: if the total capacity of the panels is slightly larger, the inverter can produce near maximum for several hours of the day, but may regulate (clip) during peak times. However, the few percent of energy that is “lost” in this case would probably have gone to the grid anyway, at a price of only 5 HUF/kWh. So a reasonable panel oversizing can help increase self-consumption without causing significant loss of value.
However, you should be careful not to oversize the entire system significantly compared to your needs. Gross billing does not prohibit you from installing a larger capacity, but it is not financially worthwhile to produce energy, the majority of which goes cheaply to the service provider. It is better to plan with a reserve for future consumption growth: for example, if you plan to charge an electric car or install a heat pump in a few years, you can choose a slightly larger inverter and solar panel capacity in light of this. When choosing an inverter, so-called hybrid inverters are now also available, which are suitable for connecting a battery energy storage system. If you plan to install a battery later, it may be worth choosing this type so that later expansion is smooth.
The role of batteries in gross settlement
Battery energy storage systems have become significantly more valuable with the introduction of gross settlement. While previously, with net settlement, the grid “stored” the surplus generated in the summer for free, now this can only be bought back at a high price. The battery, on the other hand, allows the energy generated during the day but not used to be stored locally and used in the evening or on cloudy days. This means that a much larger proportion of the electricity produced is used directly in the household, meaning that the self-consumption rate can be drastically increased (up to over 80-90%). With a well-sized battery, it is possible to power the house at night or the next morning from the surplus energy generated during the summer sunny hours, reducing the amount taken from the grid. In this way, the disadvantage of gross settlement can be mitigated, since less energy has to be sold for 5 HUF and bought back for 36-70 HUF.
However, batteries are currently expensive. A battery with a capacity of, say, 10–15 kWh that can be used in a family home can cost several million forints, which can double the investment cost of a solar system. For this reason, the payback period can be long: at today's prices, such an investment would pay for itself in up to 20 years just from the savings on the electricity bill. Of course, prices are constantly changing, and rising energy prices or new subsidies may shorten this in the future. However, at the moment, it is important to consider carefully whether it is financially worth investing in a battery. However, it can be attractive from a non-financial perspective: it increases energy independence and security (it provides a backup in the event of a power outage), and it also helps to optimize the use of renewable energy from an environmental perspective.
If you find the battery too expensive, an alternative solution is to first adjust your consumption habits (as much as possible) to production. As mentioned, schedule your flexibly postponed higher consumption activities to the daylight hours. This does not cost any extra investment, but it also improves the efficiency of the system in gross settlement.
Grid feed-in tariffs and conditions in 2025
The introduction of gross billing also brings with it some practical changes in the terms and conditions of electricity suppliers. The installation of a smart meter is mandatory for all new solar systems, which can separately measure the amount of energy fed into and taken from the grid. Billing is done on a monthly basis: the electricity supplier summarizes each month how much electricity it has supplied to you (it bills you in the usual way) and how much excess electricity it has taken from your solar system (it credits or allocates the equivalent). In practice, owners of small household-sized power plants must make a one-time declaration to the supplier when switching to gross billing so that they can be paid the equivalent of the energy fed back. After that, the process is automated, and the fee for the electricity fed in is typically reimbursed monthly by bank transfer. It is important to note that in gross settlement, the system usage fee must be paid for each kilowatt-hour consumed (unlike the balance, where it was not required for the energy supplied).
The feed-in tariff is currently ~5 HUF/kWh, as we wrote above. The question arises whether this can be expected to increase in the near future. In 2024, the regulation enabled the introduction of so-called market-based sales: from the beginning of 2025, in principle, the possibility will open for household solar panel users to sell the excess energy they produce at a free market price, through a trader or aggregator. This means that they would not receive a fixed 5 HUF, but a fee that approximates the current market electricity price. In practice, this requires an appropriate IT and contractual background: energy trading companies that are willing to take over renewable electricity from household producers at a better price. According to the news, the technical conditions for this will be in place soon, but it will take time for the system to take root. However, it is not ruled out that in the coming years, the situation may improve due to market pressure and the advocacy of solar communities, and solar panel owners may receive a more favorable tariff than HUF 5 for the energy they produce. Professional organizations (e.g. the Hungarian Solar Panel Solar Collector Association) are also calling for the introduction of a fairer, higher feed-in price, as this would significantly improve the economics of the systems and the incentive to invest.
Other grid conditions are also worth paying attention to. At the end of 2022, feed-in for new solar systems was temporarily restricted in certain areas due to grid capacity issues. However, the government has gradually lifted the feed-in ban since autumn 2023 where the grid capacity allows. In 2025, most parts of Hungary will be allowed to feed the surplus from newly installed solar panels into the grid, but it is always worth checking with the service provider in advance about local conditions. The process of obtaining permission to connect to the grid in the case of gross billing is similar to the previous one, with the difference that the billing method will be fixed as gross in the contract, and a two-way (smart) meter will need to be installed upon commissioning.
Summary
Is it still worth installing solar panels in gross settlement? The answer is definitely yes – but the system needs to be designed more carefully than during the period of net settlement. Solar panel investment continues to reduce utility bills and protect against future energy price increases, only the payback mechanism has changed. The introduction of gross settlement slightly increases the payback time, since the amount received for the kilowatt hours fed into the grid is much less than what is paid for the purchased ones. However, this can be offset if we size and operate our system wisely: maximizing our own consumption has become the keyword. It may be worth installing a smaller capacity or expanding consumption (for example, electric heating, hot water storage, electric car) so that you use as much of the energy produced as possible. If necessary, the system can be further increased in terms of self-sufficiency by subsequently expanding it with a battery. Also, remember that regulations are not static: more favorable feed-in tariffs or new subsidies may appear in the future, which could make solar systems even more attractive.
