Photovoltaics and Settlement Systems: Net Billing vs Net Metering

Net Billing vs Net Metering – What Is the Difference?

Net metering and net billing are two completely different methods of calculating electricity bills for photovoltaic system owners.

Net metering, also known as the discount system, was the first solution introduced chronologically. Under this model, surplus electricity generated beyond current consumption is transferred to the distribution system operator’s (DSO) “virtual storage,” from which the prosumer can retrieve it within the following 12 months, subject to a commission fee.

The commission amounts to 20% or 30%, depending on the system capacity (the threshold is 10 kW, meaning that most households and small businesses qualify for the lower fee). The installation capacity cannot exceed 50 kW, as this is the limit for prosumer photovoltaic systems.

A key feature of net metering is that the value of electricity fed into and drawn from the grid remains at a 1:1 ratio, regardless of fluctuations in market electricity prices.

It is important to note that new prosumers can no longer choose the net metering system. However, it remains available to users who installed photovoltaic systems by March 31, 2022. From that date, net metering can continue to operate for an additional 15 years, until 2037.

Unlike net metering, net billing assumes that unused energy is sold to the energy supplier at market rates, with the proceeds credited to an individual settlement account. This approach provides greater flexibility in the energy market and better reflects actual energy prices. As a result, one kilowatt-hour can be purchased and sold at different prices.

Despite their significant differences, self-consumption plays a crucial role in both systems. The more of the generated electricity a user consumes directly, the less energy is sent to the grid. Whether you settle your photovoltaic production through net metering or net billing, increasing self-consumption can be highly beneficial.

Net Billing vs Net Metering – How Do the Systems Work?

The net metering system is generally easier to understand and makes it simpler to forecast and plan business activities, such as purchasing a new energy-efficient machine or investing in electric vehicles. Net billing, on the other hand, is more variable but may prove more advantageous if electricity purchase prices fall below the prices at which the energy was sold.

Under net billing, the value of the transaction is closely linked to the electricity purchase and sale prices. In practice, the average user has little ability to predict future prices, although the value of electricity is more accurately reflected by market conditions. The prosumer deposit can only be used to purchase electricity. In exceptional circumstances, a portion of the accumulated funds may be withdrawn, but not the full amount. This mechanism prevents photovoltaic systems from becoming a speculative source of income resulting from unforeseen energy price fluctuations.

The greater flexibility of net billing means that it tends to be more profitable during periods of rising electricity prices. However, when selling prices fall below purchase prices, its profitability decreases.

It is worth noting that some net billing rules changed in February 2025. The value of the monthly prosumer deposit was increased by nearly 25%, allowing a larger share of electricity purchases to be covered by accumulated funds. Additionally, settlement methods were differentiated depending on when the PV installation was commissioned. Settlements are now based either on the Monthly Market Electricity Price (RCEm) or the Market Energy Price (RCE), calculated at hourly or fifteen-minute intervals.

A one-time transition from the RCEm system to the RCE system was also introduced, while maintaining a higher refund rate for surplus funds (30% instead of the previous 20%). As can be seen, net billing continues to be adjusted to better reflect the realities of Poland’s energy market.

Net Billing or Net Metering – How to Maximize the Benefits of Photovoltaics?

Instead of focusing solely on which settlement system to choose, it is worth considering how to maximize self-consumption. In reality, self-consumption is the factor that determines the profitability of a PV installation. Ideally, self-consumption should match production as closely as possible. While achieving a perfect 100% match throughout the year is unrealistic, the closer these values are, the lower the final electricity bills will be.

One of the most effective solutions is installing an energy storage system. Such a device stores excess electricity and releases it when production does not meet demand, for example at night or during the autumn and winter seasons. A single, small storage unit is usually sufficient for households, while larger businesses may invest in entire battery storage networks.

Another way to increase self-consumption is to install HVAC systems or heat pumps. Many companies already use such technologies to heat or cool large industrial facilities. Investing in electric vehicles and charging stations is also worth considering, as they can function as “micro energy storage units.”

Accurate energy monitoring should always be the foundation of a profitable photovoltaic installation. Therefore, before making an investment decision, it is advisable to conduct a detailed energy audit to determine actual electricity demand.

Which System Is Better in 2025? Profitability Analysis of Net Billing vs Net Metering

Although net billing is gradually replacing net metering, understanding the differences between these systems remains important for many prosumers. A significant number of users still operate under the older settlement model and will continue to do so for many years.

The profitability of photovoltaics under net metering can be illustrated quite easily. Let us assume that:

• The photovoltaic installation generates 1,200 kWh of electricity.

• Self-consumption amounts to 800 kWh.

The remaining 400 kWh (1,200 – 800 kWh) is fed into the grid and can be recovered within 12 months for personal use, subject to a 20% commission fee. This results in an effective saving of 320 kWh (400 × 80%).

In the case of net billing, providing such a straightforward example is much more difficult because the calculation must always take into account both the sale price of electricity at the time it is fed into the grid and the purchase price at the time electricity is consumed. This is precisely why increasing self-consumption remains the most effective way to reduce uncertainty and improve profitability.

It can be said that net billing has significantly changed how the profitability of photovoltaic installations is assessed. The gradual shift from RCEm to RCE further complicates matters, as it requires monitoring energy prices almost in real time. One thing remains certain: solar energy continues to be the most efficient source of electricity generation, regardless of the settlement method used.

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