Billing and settlement · Glossary

In the electricity system, billing and settlement are the process of valuing metered electricity quantities, or quantities determined by a permissible substitute method, using prices and other rules. This produces verifiable amounts payable or credits. The term covers more than a household electricity bill: suppliers, network operators, metering point operators, installation operators and balance responsible parties also settle services and quantities among themselves. The legal explanations below refer to Germany and were reviewed as of 11 November 2026.

Three processes must be distinguished: metering records technical quantities. Billing assigns them a monetary value for a given period. Payment then settles the outstanding amount. A bill that is arithmetically correct can still be wrong if, for example, the wrong meter, an incorrect price or an inappropriate period was used. Conversely, a late payment does not change the underlying quantity of electricity.

Energy, power and time

The main unit of energy is the kilowatt-hour, or kWh. A device that draws a constant one kilowatt for one hour consumes one kilowatt-hour. By contrast, kilowatts measure power, the instantaneous rate of energy conversion. The two quantities must not be confused: an 11 kW charger draws 5.5 kWh when operating at that power for half an hour. The energy rate prices the amount of energy, for example in cents per kilowatt-hour; a capacity charge prices a specified measure of power.

Time resolution is also crucial. Two businesses can draw the same amount of energy over a year but cause very different peak loads. Likewise, two households may consume the same amount of electricity but purchase it at different exchange prices. Billing can account for such differences only if the metering method and the agreed pricing rule capture them. An opening and a closing meter reading can establish the total quantity, but not how it actually varied within the period.

The electricity bill and its price components

Under a simple supply contract, the electricity price usually consists of an energy rate and a time-based standing charge. These contain economically distinct components: energy procurement and sales, network use, metering point operation, taxes, concession fees and other statutory charges. An agreed total price does not turn these components into a single market price. Under § 40 EnWG, certain charges included in the price must be shown separately; the breakdown is therefore not merely an optional extra offered by particularly transparent suppliers.

A simplified calculation: a household draws 3,000 kWh in a full billing year. The agreed gross energy rate is €0.30 per kWh and the gross standing charge is €120 per year. The costs are therefore €900 plus €120, totalling €1,020. If twelve instalments of €80 each have already been paid, €60 remains to be paid. In this example, taxes or network charges must not be added again insofar as they are already included in the agreed gross price.

Instalments are advance payments towards expected costs, not meter readings or evidence of actual monthly consumption. The consumption bill compares the calculated costs with the payments credited. If prices change during the period, the respective subperiods must be taken into account. A high instalment can therefore result in a credit even if consumption is unchanged; a low instalment may merely conceal a later additional payment.

For electricity supplies to final customers, the general rule is that billing periods must not exceed one year. Bills and final bills must generally be provided within six weeks, or within three weeks where monthly billing has been agreed. Payment is due no earlier than two weeks after receipt of the payment request. Billing information is not automatically a payment request.

Network use and power-dependent costs

Network charges are regulated charges for using the network. For withdrawals subject to demand metering, § 17 StromNEV generally provides for an energy component and an annual demand component. The latter is calculated from the annual demand rate and the annual peak demand. For certain low-voltage withdrawals of up to 100,000 kWh per year that are not subject to demand metering, an energy rate applies instead, possibly supplemented by a standing charge. The network level, metering method and utilisation hours influence the calculation of charges. Individual network charges under § 19 StromNEV are subject to specific conditions; they do not automatically apply to every larger business.

A purely illustrative example shows the effect of a demand charge: at €100 per kW for the billing year, a billing-relevant peak demand of 200 kW produces a demand component of €20,000. If that figure falls to 180 kW, the amount would be €18,000 at the unchanged rate. This does not mean that every brief equipment peak directly determines the annual bill. The relevant figure is the power determined under the metering and billing rules. Load shifting therefore does not save the same amount under every tariff or in all operating conditions.

Dynamic tariffs and metering data

Dynamic electricity tariffs reflect fluctuations in the short-term electricity market. Since 1 January 2025, all electricity suppliers have been required to offer corresponding contracts to final customers with an intelligent metering system. However, not every time-variable tariff is a dynamic tariff. For billing, consumption quantities and price intervals must match. This makes metering point operation a prerequisite for time-specific cost calculation.

Suppose 2 kWh is drawn in each of two billing intervals. At assumed complete energy rates of 20 and 40 cents per kWh, the total is €1.20. If all 4 kWh is instead drawn in the cheaper interval, the total is €0.80. The example explains the incentive to shift consumption, but is not a tariff offer. Whether a particular tariff is worthwhile also depends on fixed costs, metering costs and the quantities that can actually be shifted. A low exchange price alone does not describe the full price paid by the final customer.

Balancing is a different level of settlement

In the market, feed-in and withdrawal points are assigned to a balancing group. Its responsible party bears economic responsibility for imbalances, which are settled through imbalance energy. This must be distinguished from the final customer's bill. Under profile-based methods, quantities over time are initially assigned using predefined profiles. Differences in the subsequently established consumption quantity are settled between the network operator and the supplier through excess and shortfall quantity settlement. An additional kilowatt-hour on a household's annual bill is therefore not automatically an equal quantity of imbalance energy for the supplier.

This distinction explains why the same supply gives rise to several settlements without the same service necessarily being charged twice. The household pays for its supply. Market participants also settle network use, quantity differences and other services among themselves. These upstream processes affect the supplier's costs, but do not necessarily appear as separate items on every final customer bill.

Photovoltaics, self-consumption and storage

For a photovoltaic installation, grid imports, self-consumption and feed-in must be distinguished. Feed-in remuneration and the market premium generally concern eligible electricity fed into the grid; feed-in alone does not establish an entitlement to payment. Installation category, commissioning and support conditions remain decisive. For storage systems, the origin and allocation of the quantities of electricity charged into storage must also be considered. § 19 EEG distinguishes several support options for this purpose. Their statutory description does not mean that every option can be used without further evidence or implementation requirements.

A simplified energy balance without storage illustrates the distinction: if a rooftop installation generates 5,000 kWh and 2,000 kWh of that is consumed directly on site, the remaining feed-in is 3,000 kWh. The 2,000 kWh consumed on site has not also been fed into the grid. Storage shifts use in time and causes losses; its discharge must therefore not be counted again as additional original solar generation. Moreover, imports and feed-in cannot be netted into an annual quantity eligible for remuneration merely because they occur behind the same connection.

Sources of error and limits of interpretation

Missing meter readings do not permit arbitrary estimation. Permissible estimates must take actual circumstances into account appropriately; the reason and calculation factors must be stated. Checks should cover, in particular, the consumption point, meter assignment, period, prices and payments credited.

Market communication governs data exchange between the parties involved. To investigate errors transparently, a measured value, a substitute value and an estimate should be clearly distinguished in terminology: they are derived in different ways. An actual meter reading provided later initially describes its own reading date; it does not automatically replace a missing historical value. Whether a correction is needed, and for which period, must therefore be assessed on the facts of the case.

Finally, an electricity bill is not a complete representation of the electricity system. Annual quantities show neither individual network bottlenecks nor the climate impact of a particular hour of consumption. Electricity disclosure must also not be confused with an hourly physical measurement of origin. Billing and settlement primarily answer the question of which quantity or power is assigned to whom, at what price and under which rule. Their quality lies in making that allocation verifiable and preventing different cost drivers from disappearing behind a single final amount.

Sources

Energiewirtschaftsgesetz – EnWG — Bundesministerium der Justiz und für Verbraucherschutz / Bundesamt für Justiz; 2026-07-23. § 3, Definition dynamischer Stromlieferverträge; § 40 Abs. 3; § 41a Abs. 2
Rechnungen und Sperrungen — Bundesnetzagentur; unbekannt. Abschnitte zur Verbrauchsermittlung, Rechnungsfrist, Fälligkeit und Rechnungsprüfung
Stromnetzentgeltverordnung – StromNEV — Bundesministerium der Justiz und für Verbraucherschutz / Bundesamt für Justiz; 2023-12-22. § 17 Abs. 1, 2 und 6; § 19
Erneuerbare-Energien-Gesetz – EEG 2023 — Bundesministerium der Justiz und für Verbraucherschutz / Bundesamt für Justiz; 2014-07-21. §§ 19 bis 21; § 100 Abs. 34
Beschluss BK6-22-024 zur Anpassung der Marktkommunikation — Bundesnetzagentur, Beschlusskammer 6; 2024-03-21. Begründung, Abschnitte 2.6.1 bis 2.6.5, Seiten 21 bis 24

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Edited by eCMS on 11.11.2026 06:10