What is netting?
Batting means that an energy supplier offsets returned electricity with the electricity purchased from the grid within the same billing period. The meaning of netting therefore does not lie in the physical energy flow, but in the financial processing on the energy bill.
- Offtake from the grid: 10,000 kWh
- Feed back to the grid: 7,000 kWh
- Net purchase after netting: 3,000 kWh
Purchase and return are offset against each other.
What does feeding back power mean?
With power supply, an installation produces more electricity than is currently used locally. The surplus flows via the connection to the public electricity grid. The smart meter separately registers how much electricity is consumed and how much is supplied back.
- Production of the installation: 50 kWh
- Directly consumed by the building: 30 kWh
- Feed back to the grid: 20 kWh
The financial value of this surplus depends on netting, the feed-in tariff and the conditions of the energy contract.
What is the difference between netting and returning?
The difference is in what happens physically and financially. During feed-in, excess electricity flows from solar panels to the public electricity grid. With netting, part of the returned electricity is offset on the energy bill with electricity that has been purchased from the grid at another time.
Netting and returning in one example
A company with solar panels has the following energy profile on an annual basis:
- Purchase from the electricity grid: 20,000 kWh
- Feed back to the electricity grid: 12,000 kWh
- Direct local consumption of solar power: 6,000 kWh
- Net purchase after netting: 8,000 kWh
The 6,000 kWh that is used directly does not enter the grid. The 12,000 kWh that is supplied back can be offset against the electricity purchase within the netting scheme.
What happens if you return more than you purchase?
An organization can supply more electricity within a settlement period than it consumes from the grid. Then the full amount cannot be netted: netting is only possible up to the amount of electricity purchased.
- Purchase per year: 10,000 kWh
- Feed-in per year: 13,000 kWh
- Maximum to be offset: 10,000 kWh
- Remainder with feed-in allowance: 3,000 kWh
The amount and conditions of the feed-in payment are stated in the energy contract.
Why is netting financially more beneficial than a feed-in allowance?
With netting, a returned kilowatt hour is offset against a purchased kilowatt hour. This eliminates part of the costs of the electricity purchased.
The producer receives a feed-in payment for electricity that remains after netting. This compensation is usually lower than the full rate for purchased electricity. A netted kilowatt hour therefore generally has more financial value than a kilowatt hour that is returned as a net surplus.
| Situation | What's happening? | Financial processing |
|---|---|---|
| Direct self-consumption | Solar power is used locally | Avoids reduction in the network |
| Netting | Return deliveries will be deducted from purchase | Kilowatt hours are crossed out |
| Net return | After settlement, a surplus remains | Energy supplier pays a fee |
What will change in the netting scheme from 2027?
From 2027, returned solar energy can no longer be offset against electricity purchased from the grid at another time. Returns remain possible, but the financial processing will change. Electricity purchased will then be fully charged at the applicable supply rate.
The producer receives a separate payment for electricity supplied back. As a result, the financial advantage of annually settling production and consumption disappears.
It is becoming more important for solar panel owners to:
- use more solar energy directly;
- shift consumption to sunny hours;
- charge a battery smartly;
- limit returns at unfavorable prices;
- centrally manage generation, storage and consumption.
Does the end of netting also mean the end of supplying back?
No. The end of the netting scheme does not mean that solar panels are no longer allowed to supply electricity to the grid. If an installation produces more than is used or stored locally, the surplus still flows to the electricity grid.
The smart meter continues to register this return. Only the financial processing changes: returned electricity is no longer offset against purchased electricity, but reimbursed separately.
What are return costs?
Energy suppliers can charge costs to customers who supply solar energy. These costs are often called return costs, a return contribution or fixed return costs.
The amount and calculation differ per supplier and contract. Some suppliers work with scales, others process the costs in a different way.
Return costs and netting are two different things. A customer can therefore settle the amount and pay return costs at the same time.
Why is direct self-consumption becoming more important?
Direct self-consumption means that electricity generated is immediately used within your own installation. This energy does not go to the grid and does not have to be purchased again later.
A company can increase its own consumption by running electrical processes when the solar panels produce a lot. Think of charging stations, heat pumps, electric boilers or flexible production processes.
What role does a battery play?
A battery stores solar energy that is not used immediately. The stored energy can be used later when local consumption is higher than generation.
This means that less energy needs to be supplied directly and less power is drawn from the grid later. A battery can also be used for peak shaving, energy arbitrage and monitoring the grid connection.
A battery can:
- increase self-consumption;
- shifting solar energy to a later time;
- limit returns;
- smooth out power peaks;
- responding to price differences;
- make flexibility available.
The big advantage of an energy management system
Solar panels, batteries and flexible consumers each have their own possibilities and limitations. Without central control, these systems do not automatically respond to each other.
An energy management system (EMS) continuously measures how much energy is generated, used, stored and returned. Based on this, the EMS determines which action delivers the most value at that moment. An EMS can:
- maximize direct self-consumption;
- charging a battery in case of a production surplus;
- use stored energy later;
- distribute payload dynamically;
- limit returns;
- process negative energy prices;
- monitor asset limits;
- automatically adjust generation.
Smartbox
Smartbox: smart steering before and after netting
As long as netting is still possible, Smartbox] helps to use generated solar energy as efficiently as possible within the installation. The system centrally controls batteries, charging stations and other energy assets based on real-time data on consumption, generation, storage and grid capacity. This way, more solar power is used directly locally and the installation remains within the set power limits.
After the disappearance of the netting scheme, real-time control will become even more important, because returned electricity can no longer be offset against subsequent consumption. Smartbox therefore continuously determines whether solar energy is best used directly, stored, returned or limited in a controlled manner.
Why is Smartbox a smart investment?
- Increases direct self-consumption of solar energy.
- Automatically controls batteries based on generation, consumption and prices.
- Limited unfavorable return delivery with automatic curtailment.
- Distributes available power among charging stations and other energy assets.
- Combines self-consumption with peak shaving and energy arbitrage.
- Responds to changes in the installation within 20 milliseconds.
- Integrates batteries, solar panels, wind turbines, charging infrastructure, generators and cooling.
- Provides real-time insight into energy flows via the Smartbox Portal.
Prepare your customers for the end of settlement
As an installer or energy company, do you want to prepare your customers for an energy system in which netting disappears and smart management becomes more important? With Smartbox, generation, consumption and storage are automatically coordinated. Your customers increase their own consumption, limit unfavorable feed-in and get more value from their energy installation.
At the same time, you expand your services with intelligent energy management and new revenue models. Within our partner structure, both you and your customer benefit from flexible energy management, market optimization and better utilization of energy assets.
Interested in an introductory meeting? Call or email us, or fill in our contact form.