The Nigerian Electricity Regulatory Commission (NERC) has officially commenced its Net Billing Regulations 2026, a policy designed to empower electricity consumers to generate their own power from renewable sources and sell any excess electricity back to the national grid.
This new framework allows eligible electricity users, termed “prosumers,” to install solar photovoltaic systems for personal consumption and export surplus energy to their respective distribution companies under a net billing arrangement.
The regulations aim to promote the adoption of renewable energy technologies, enhance energy security and reliability, encourage private sector participation in distributed generation, support the reduction of greenhouse gas emissions, and facilitate the efficient integration of renewable energy systems into distribution networks.
For consumers, this development means that households, businesses, and industrial users investing in renewable energy, particularly solar systems, can now reduce their electricity bills by utilizing self-generated power and potentially earn credits for any excess electricity supplied to the grid.
To participate in the scheme, customers must be connected to a distribution company’s network, install renewable energy systems that meet regulatory standards, and obtain approval from their electricity distributor. The installed capacity for these systems must fall within a range of 50 kilowatt-peak (kWp) to 1.5 megawatt-peak (MWp).
Participants are also required to sign a Net Billing Agreement and register with NERC after obtaining approval. NERC will equip approved users with bidirectional metering devices to measure both electricity consumed from the grid and power exported back into it. Exported energy will be credited in accordance with the export tariff approved by the Commission.
Applicants must first undergo technical feasibility assessments by their distribution companies before final approval is granted. The new regulation is expected to accelerate rooftop solar adoption and gradually shift Nigeria toward a more decentralized electricity generation system, particularly among consumers seeking to reduce reliance on the national grid.
The framework establishes a standard structure for the interconnection of renewable energy systems at customer premises to electricity distribution networks, creating a compensation mechanism for surplus electricity supplied back to the grid. This is in line with the Electricity Act 2023, which empowers NERC to regulate the electricity sector and promote renewable energy adoption.
NERC stated that the framework is designed to ensure renewable energy systems do not compromise safety and overall network reliability, while also supporting Nigeria’s energy transition plan. Users will register with NERC and obtain certification before commencing electricity export to the grid.
Electricity imported by a prosumer from a Distribution Company will continue to be billed at the prevailing retail tariff approved by the Commission. The regulation also mandates that Distribution Licensees conduct technical feasibility studies and issue reports within 15 days, assessing network suitability and infrastructure for proposed interconnections.
