What is MHHS?

Market-Wide Half-Hourly Settlement (MHHS) has been described by Ofgem as the most significant reform to Britain’s electricity retail market since privatisation in the 1990s. In simple terms, it changes how electricity consumption and export is settled - moving away from estimated profiles to actual half-hourly meter readings for every customer in the country.

Currently, only large industrial and commercial users are required to settle on a half-hourly basis. MHHS changes this: every meter - including residential and smaller commercial sites - will submit actual readings for each 30-minute window of the day, ensuring that generators and consumers are settled against what they genuinely used or exported in real time.

Migration began in October 2025, with an 18-month rollout targeting completion by May 2027. The regulatory compliance deadline is October 2026. Ofgem projects that this reform will deliver net consumer benefits of between £1.6 billion and £4.5 billion up to 2045 - a figure that reflects the enormous inefficiency baked into the current settlement model.

A New Energy Pricing Architecture

To understand why MHHS matters for battery storage, it helps to first understand the price distortion that is already emerging in the UK electricity market. The “duck curve” - a term coined in California - describes how midday solar generation floods the grid and depresses prices, only for demand to surge in the evening when the sun drops and people return home.

This phenomenon has now arrived in Britain. Electric Insight's data shows that in Q2 2025, daytime power prices fell below overnight prices for the first time ever, driven by a record-breaking spring (40% more sunshine hours than average) and rapidly growing solar PV capacity. In 2024, there were 155 hours of negative electricity pricing - the highest ever recorded - and in May 2025 alone, the N2EX market logged 17 consecutive hours of negative pricing.

Today, most export arrangements are under a flat rate. Therefore, a solar owner gets paid the same whether they export at midday - when the grid is already oversupplied - or at 6pm, when the grid is under strain and power is scarce.

MHHS fundamentally changes this pricing structure. Because settlement will be tied to actual half-hourly data, suppliers will be financially accountable for precisely when their customers consume or export - incentivising them to offer time-of-use and dynamic export tariffs that accurately reflect the value of energy at any given moment. Midday export, occurring when the grid is oversupplied, will attract lower - potentially near-zero or negative - rates. Evening export, when demand peaks, will attract a significant premium.

This pricing structure does already exist - Octopus Energy's Agile and Flux tariffs, for example, already pay very high export rates during the 4-7pm evening peak, versus far lower - or negative rates - at midday. MHHS brings this structure to the whole market, not just the tech-forward customers who have sought it out.

Arbitrage Opportunity for Battery Owners

Today, the opportunity for battery owners to exploit price differentials is relatively blunt. Most commercial sites operate under flat day-rate and flat-night rate tariff structures, and batteries arbitrage the gap between those fixed points. However, if this differential is any less than around 5-6p/kWh, the financial returns from energy arbitrage are not exactly ground-breaking.

Under MHHS, that opportunity becomes considerably more sophisticated. A battery, controlled by an appropriately configured energy management system (EMS), will be able to respond to half-hourly changes in export and import rates throughout the day - charging when prices are at their lowest, and discharging or exporting when they are at their highest. The core play is straightforward: charge during the cheap midday solar surplus, potentially at very low or even negative import prices, then discharge during the high-value evening peak.

Pacific Green - developers of a 475 MWh grid-scale BESS project in Kent - have summarised the commercial logic clearly, stating that MHHS:

"will facilitate the introduction of new energy tariffs and incentives to encourage off   peak energy consumption, which battery systems will be well placed to benefit from.”

Whilst this insight was offered in the context of grid-scale storage, the same methodology applies equally to commercial-sized batteries. Any battery connected to the grid and managed by a capable EMS will be positioned to exploit the half-hourly price signals that MHHS will make universal.

Implications for Solar System Design

As a solar developer, one of the most significant consequences of MHHS is the impact it will have on how solar systems should be designed going forward.

Historically, a range of incentives from the Feed-in-Tariff to simply high export rates, meant that solar systems could be reasonably sized at lower self-consumption levels. A system designed at, say 75% self-consumption might earn meaningful export income on the remaining 25% of generation, with flat-rate export payments providing a reliable financial return regardless of when that energy left the site.

Under MHHS, that changes materially. Export rates during solar-generating hours - the middle of the day - will increasingly reflect the oversupplied state of the grid, pushing towards zero or below. The premium export rates will sit in the morning and evening, precisely when solar generation is at its lowest or absent entirely. A solar-only system designed with low self-consumption can no longer rely on export income to justify its scale.

This leaves system designers and their clients facing a clear choice.

The first option is to design materially smaller solar systems, targeting very high self-consumption rates, and accept that the installation offsets less overall consumption. This is a conservative approach that reduces exposure to low or negative export values - but it also reduces the scale of carbon savings and financial return the system can deliver.

The second option is to integrate a battery energy storage system alongside the solar installation. A co-located BESS allows a larger solar array to be installed, offsetting significantly more of the site’s consumption, while ensuring that surplus generation is stored and discharged when it is most valuable - either during periods of high on-site demand or during the premium evening export window. Rather than losing value in the midday trough, the battery captures it and moves it to where it is worth most.

Conclusion

The price signals that make battery storage profitable are already present in the market -MHHS will amplify them across the board. As the UK targets over 45GW of installed solar capacity by 2030, the midday surplus problem will only deepen. Batteries are uniquely positioned to solve it.

To conclude, as electricity markets continue in this direction, solar without storage will become increasingly outdated.