Key Takeaways
- Eligible users can now generate solar power and sell excess to their DisCo
- Minimum system capacity is 50kWp, open mainly to commercial and industrial users
- Participants will receive credits based on a NERC-approved export tariff
Nigeria’s electricity regulator has launched a new framework that allows eligible consumers to generate their own power and sell whatever they do not use back to the national grid.
The Nigerian Electricity Regulatory Commission (NERC) announced the commencement of the Net Billing Regulations 2026 in a public notice posted on its official channels on Wednesday in Abuja.
The framework was developed under the provisions of the Electricity Act 2023 and outlines procedures for registration, interconnection, metering, billing, and settlement between prosumers and electricity distribution companies.
Nigeria has one of the worst electricity supply records in Africa, with millions of homes and businesses relying on private generators for basic power needs. A policy that allows solar users to earn from surplus generation could shift the economics of investing in renewable energy systems for businesses and large commercial users.
NERC said the initiative is aimed at boosting renewable energy adoption, improving energy security and reliability, and expanding private participation in electricity generation.
“The Regulations establish a framework that enables eligible electricity customers, known as Prosumers, to generate electricity from renewable energy sources, primarily solar photovoltaic systems, for their own consumption and export surplus energy to the distribution network under a Net Billing Arrangement,” the commission said.
What the regulation actually does
The Net Billing Regulations 2026 formally introduces a new category of electricity user in Nigeria.
Under the scheme, participants who install renewable energy systems, particularly solar photovoltaic facilities, can export surplus electricity to their distribution company and receive credits based on a NERC-approved export tariff.
The term “prosumer” refers to someone who is both a consumer and a producer of electricity, a concept already in use in South Africa, Kenya and parts of Europe.
Approved participants will be provided with bidirectional net metering facilities to measure electricity imported from the grid and electricity exported to it, with exported energy credited in accordance with the export tariff approved by the commission.
NERC said the policy is also designed to reduce pressure on the national grid and support Nigeria’s broader energy transition goals.
Who qualifies and how to apply
The regulation is not designed for the average residential rooftop solar user. The qualifying conditions are as follows:
- You must be connected to a DisCo’s distribution network
- Your renewable energy system must have a minimum installed capacity of 50 kilowatt peak (kWp) and a maximum of 1.5 megawatt peak (MWp)
- You must obtain approval from your DisCo following a technical feasibility assessment
- You must sign a Net Billing Agreement and register formally with NERC
Customers must be connected to a DisCo’s network, install renewable energy systems that meet prescribed technical standards, and undergo a technical feasibility assessment by their respective distribution company before they can be enrolled in the scheme.
The capacity threshold effectively limits the initial rollout to commercial, industrial, and large-scale users rather than households.
NERC has not announced any plans to lower the minimum threshold for smaller residential systems at this stage.
What it means for Nigeria’s power sector
Nigeria’s electricity sector has struggled for decades with chronic underinvestment, grid instability, and low collection rates across distribution companies.
Industry stakeholders have described the Net Billing Regulations as a significant step toward expanding distributed renewable energy generation, particularly solar power, while supporting Nigeria’s energy transition objectives.
The regulations are also expected to improve the commercial viability of behind-the-meter renewable energy projects and provide additional incentives for investment in clean energy.
By enabling businesses, industries, and larger households to generate and sell power, the policy is expected to encourage investment in renewable energy while creating a more decentralised and resilient electricity system.
No export tariff figure has yet been published by NERC.
The commission said rates will be determined and communicated separately.
