What Is Hourly Settlement? 2026 Guide for Unlicensed Solar Owners

Hourly settlement is a critical change for unlicensed solar owners that moves the generation-consumption calculation from monthly totals to hourly matching. It is no longer enough to place total monthly generation and total monthly consumption side by side; each hour is evaluated within itself.

For this reason, two facilities with the same installed capacity may produce different financial results. A business with low consumption during daytime generation cannot read solar return the same way as a business whose shift structure overlaps with solar production hours.

Scope Note

This article is a general assessment prepared especially for unlicensed generation facilities that received a call letter after 12 May 2019. Residential subscriptions, small installed capacities, older call letters or special association structures may be subject to different practices. Before implementation, the facility’s connection agreement, subscriber group, call letter date and current EPDK decisions should be checked together.

Main Difference Between Monthly and Hourly Settlement

In monthly settlement, generation delivered to the grid and consumption withdrawn from the grid during the month are compared on a total basis. Surplus generation at noon may be offset by night consumption within the same month.

In hourly settlement, this balance is built separately for each hour. If generation exceeds consumption in one hour, surplus production occurs. Withdrawal during the night of the same day does not retroactively erase the noon surplus.

This change highlights three results:

• Self-consumption ratio becomes more critical.
• The hours when surplus generation occurs determine the financial result.
• The supply contract becomes an inseparable part of the solar revenue calculation.

How Should the Paid Production Limit Be Read?

With the transition to an hourly system, one of the most important concepts is the paid production limit. In simple terms, this limit refers to the annual upper threshold for surplus production that can receive payment from the incumbent supplier.

In practice, the limit calculation is evaluated according to the facility’s historical consumption, association structure and regulatory scope. Therefore, investment feasibility should model not only "annual generation", but also the question of "which generation creates paid revenue and which generation only reduces consumption."

When the limit is reached, generation does not become worthless. The solar system still continues to meet consumption within the same hour. However, payment expectations for surplus above the limit may change.

For this reason, showing annual generation in a single line is not enough in feasibility. Generation should be divided into three separate baskets:

• Self-consumption that reduces consumption within the same hour
• Surplus production delivered to the grid with expected payment
• Surplus production that creates a different financial effect due to limit, period or application conditions

If this separation is not made, the payback period may look shorter than it actually is. This mistake is common especially in facilities with high summer production, low summer production-line operation or reduced weekend consumption.

Price and Net Revenue Calculation

Gross revenue for surplus production should be evaluated together with subscriber group, current tariff, distribution charges and related board decisions. Therefore, calculating annual revenue over a single fixed price is risky.

Active energy prices and distribution effects differ especially across industrial, commercial, agricultural irrigation and residential groups. Since tariffs may change across invoice periods, the financial model should be updateable.

The supply contract should also be considered in net revenue calculation. A business that creates surplus generation during the day may withdraw high-cost electricity from the grid at night or due to shift changes. In this case, the real impact cannot be seen unless surplus generation revenue and net withdrawal cost are placed in the same table.

Three Practical Scenarios

Facility with daytime surplus generation

If consumption drops at noon in a production facility while solar generation remains high, surplus occurs. In monthly settlement, this surplus could be offset by night consumption; in the hourly system, it is evaluated separately for that hour. In this scenario, incumbent supplier revenue may occur, but because night net withdrawal increases, the bilateral agreement price becomes critical.

Three-shift facility

If the facility runs with continuous load and generation never exceeds consumption in any hour, surplus does not occur. In such a structure, the effect of hourly settlement remains limited. Value comes from generation directly reducing the invoice.

Facility whose limit is reached during the year

If the annual paid production limit is reached early, payment expectations for surplus production change during the remaining part of the year. This is especially important in facilities with high summer production and seasonally low consumption.

What Should Businesses Do?

The priority is hourly data analysis. The last 12 months of consumption, preferably hourly meter data and solar generation records should be combined in the same model.

Topics to be checked:

• At which hours does net withdrawal occur, and at which hours does surplus production occur?
• In which month may the paid production limit be reached?
• Are the associated consumption facilities in the same subscriber group?
• Is there night, weekend or market-indexed price risk in the supply contract?
• Who tracks payment notifications and objection processes?

A good control model should produce the following monthly outputs:

• Hourly net withdrawal and surplus generation table
• Usage ratio of the paid production limit during the year
• Difference between solar generation forecast and actual generation
• Reconciliation of supply invoice, distribution invoice and settlement records
• Expected surplus generation and supply cost scenario for the next month

This tracking is important not only for the investor, but also for finance and accounting teams. Settlement, payment notification and supply invoice may occur at different times; if regular reconciliation is not made, revenue and cost may be posted to the wrong period.

Conclusion

Hourly settlement makes solar investment more technical and data-driven. The question "how many kWp did we install" is no longer enough. The correct question is: At which hour does this generation meet which consumption, and under which commercial terms does it create revenue?