Balancing market: how a home battery earns on mFRR, aFRR and the capacity market

What are mFRR, aFRR and the capacity market?

Elering keeps the power system balanced every second: when consumption and generation diverge, it buys balancing energy. mFRR (manual Frequency Restoration Reserve) is a reserve Elering orders by hand in 15-minute steps; aFRR (automatic FRR) activates automatically and continuously according to the frequency. Estonia joined the Europe-wide mFRR platform MARI in October 2024 and the aFRR platform PICASSO in April 2025.

The capacity market is a third income source: there you are paid for availability rather than energy. The aggregator forecasts how much capacity its portfolio can keep in reserve, offers it to Elering and shares the availability fee among its customers.

A household cannot take part on its own – it needs an aggregator that pools hundreds of batteries into one virtual power plant. In Estonia that is Qilowatt (a Fusebox partner), KratTrade and MarkeDroid. They need a hybrid inverter, a battery, a controller (e.g. the Qilowatt Modbus R2) and the right to sell electricity to the grid.

What an activation looks like

The signal comes from the aggregator and usually lasts 1–15 minutes. UP means the battery feeds energy into the grid (or cuts consumption against the baseline); DOWN means the battery charges from the grid. Afterwards the controller restores normal mode. Unlabelled signals are mFRR in practice; aFRR signals reached homes in summer 2026.

Payment is calculated from the measured deviation from the baseline, not from what happens inside the battery. The BRP compensation (for the balance responsible party, i.e. your electricity seller, who buys the energy exported during UP at the exchange price) is deducted from the activation revenue, and of what remains the home gets 80%; the aggregator keeps 20%. DOWN energy is bought on the ordinary electricity bill (exchange price, network fee, taxes), which the activation price covers partly or fully.

Real numbers from one Estonian home

The calculator’s model is built on one home near Tartu (70 kWh battery, 20 kW hybrid inverter) that takes part in the mFRR and aFRR markets through KratTrade. The table shows its actual aggregator reports for 2025-10 – 2026-09: energy delivered to the grid (UP) and taken from it (DOWN), the number of signals and the payout after BRP compensation and the 80% share.

That is €64 per kilowatt of inverter per year, or €0.24 for every kilowatt-hour moved. Summer 2025, when mFRR prices were exceptionally high, is deliberately left out – those prices are not coming back.

The capacity-market availability fee

The same home joined the capacity market in summer 2026. By the aggregator’s payout the availability fee is about €0.46 per kilowatt offered per month – €9 a month with a 20 kW inverter. In the calculator it is a separate switch and number you can change.

Qilowatt publicly estimates that the capacity market adds at least 20% to mFRR income and aFRR about a third. Our figures are more modest, because they are one park’s real payouts, not a marketing estimate.

What the calculator assumes

For every 15-minute interval the reference park tells us how many kWh per kilowatt of inverter were moved UP and DOWN and how many euros each kWh earned. Your battery gets the same amount at the same time multiplied by the power you can offer (the inverter’s kW, but no more than the battery sustains for an hour, its usable kWh as kW), but never more than the battery holds or has room for, and never beyond your grid connection’s limits.

To stay ready for signals, the model keeps part of the battery (20% by default) in reserve from the house. The “availability” slider scales every activation at once – lower it below 100% if you doubt your aggregator and device will see as many signals. The balancing switch covers both mFRR and aFRR; aFRR activations appear in the data from summer 2026, when the reference park joined it.

Income = kWh moved × that moment’s €/kWh × your share (80% by default). The energy moved passes through the ordinary electricity bill: UP energy is sold to your seller at the exchange price, DOWN energy is bought with network fees and taxes. Both show separately in the result.

Things to keep in mind

• Balancing energy prices have fallen from their 2025 peak and will likely fall further as more batteries join. Last year’s income is not a promise for next year.
• Activations depend on the aggregator’s portfolio, your device’s response and the battery’s state of charge. Two identical batteries can earn different amounts.
• Activations consume battery cycles: the reference park moved almost 4 MWh a year for the balancing market, roughly 55 full cycles of a 70 kWh battery.
• Aggregators may charge for the device or the service; the calculator assumes you keep 80% of the revenue and pay nothing else.
• The main fuse limits DOWN activations: with a 25 A fuse no more than ~17 kW can come from the grid, part of which the house uses.

Frequently asked questions

How much does a 10 kWh home battery earn on the balancing market?

In the calculator’s default scenario (10 kWh battery, 10 kW inverter, a house with a heat pump) mFRR/aFRR gave €381 and the capacity market €50 a year, €431 together. Income grows with inverter power (kW), not only capacity.

Can I trade with Elering myself?

No. The minimum reserve bid is 1 MW and the participant must be a balancing service provider. Homes take part as part of an aggregator’s virtual power plant (Qilowatt, KratTrade, MarkeDroid), which bids, measures and settles.

Does the balancing market get in the way of using the battery at home?

A signal lasts a few minutes and normal mode returns afterwards. The calculator keeps part of the battery (20% by default) in reserve for balancing, so storing solar and using it in the evening continues, just with a slightly smaller battery.

How much did the reference park really earn?

The 70 kWh / 20 kW home near Tartu received €1,287 net from activations for 2025-10 – 2026-09 (after BRP compensation and the 80% share), plus from summer a capacity-market fee of about €0.46 per kW per month.

What is the difference between mFRR and aFRR for a home?

mFRR signals come less often and as firm 15-minute orders; aFRR activates automatically and more often, in smaller amounts. Qilowatt opened aFRR to homes in summer 2026 and one contract covers both markets.

Sources

• Market data: Baltic Transparency Dashboard, Elering – balancing services
• Aggregators: Qilowatt – paindlikkusturg, Qilowatt – aFRR for homes, MarkeDroid
• Reference park: KratTrade/Qilowatt reports, 2025-10 – 2026-09 (anonymised)