NERC Launches Net Billing Scheme, Allows Nigerians to Sell Excess Solar Power to DisCos

Nigerian Electricity Regulatory Commission (NERC )

NERC Launches Net Billing Scheme, Allows Nigerians to Sell Excess Solar Power to DisCos

The Nigerian Electricity Regulatory Commission (NERC ) has officially commenced the Net Billing Regulations 2026, a landmark framework that allows electricity consumers with qualifying solar power systems to generate electricity for their own use and sell any surplus energy back to distribution companies. The commission announced the rollout of the framework on Wednesday, June 3, 2026, describing it as a major step towards expanding renewable energy adoption and improving electricity access across the country. Under the new arrangement, eligible electricity consumers — now officially designated as “prosumers” (consumers who both consume and produce power) — can generate electricity primarily through solar photovoltaic systems for their own consumption and export any surplus energy to the distribution network under a net billing arrangement.

According to NERC, the regulations are designed to achieve five core objectives: promote the adoption of renewable energy technologies, enhance energy security and reliability for electricity consumers, encourage private sector participation in distributed generation, support the reduction of greenhouse gas emissions, and facilitate efficient integration of renewable energy systems into distribution networks. “The Regulations establish a framework that enables eligible electricity customers (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 stated. The net billing regulations arrive as Nigeria continues to grapple with significant electricity supply challenges. According to recent NERC data, average available generation stood at just 4,286 megawatts in April 2026 out of a total installed capacity of 13,625 megawatts across 28 grid-connected plants — meaning generation companies operated at only 31 per cent of installed capacity. The country also experienced its first national grid collapse of 2026 on January 23, when total generation fell to 0.00 megawatts, plunging large parts of the country into darkness. The gap between supply and demand — estimated national demand stands at about 20,000 megawatts — has forced millions of households and businesses to rely heavily on petrol and diesel generators.

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To participate in the net billing scheme, applicants must meet several eligibility conditions established by the commission. Prospective prosumers must already be connected to a distribution company’s network and install renewable energy systems that comply with applicable technical and regulatory standards. They must also obtain approval from the relevant DisCo, execute a net billing agreement, and register with NERC. The commission specified that eligible renewable energy installations must have a minimum installed capacity of 50 kilowatt peak (kWp) and a maximum capacity of 1.5 megawatt peak (MWp). This capacity threshold indicates that the scheme is targeted primarily at medium-to-large scale consumers — including commercial and industrial customers, factories, shopping complexes, office campuses, hospitals, and telecommunications facilities — rather than small residential customers with modest rooftop solar installations. Industry observers note that the 1.5-megawatt upper limit suggests NERC intends to stress-test the framework with a defined initial cohort before potentially expanding eligibility in the future.

NERC has outlined a clear procedural framework for interested customers seeking to participate in the net billing arrangement. Interested customers are required to apply to their respective distribution companies for a technical feasibility assessment. Upon receiving a complete application, the distribution licensee must conduct a technical feasibility study and issue a report. Where an application is approved, both parties must execute a Net Billing Agreement. Following the execution of the agreement, applicants must register with NERC in accordance with the provisions of the regulations before they can commence electricity export to the grid. “Interested customers are required to apply to their Distribution Licensee for a technical feasibility assessment,” the commission stated. “Upon approval and execution of a Net Billing Agreement, the applicant shall register with NERC in accordance with the provisions of the Regulations.”

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Approved participants will receive bidirectional net metering facilities capable of separately measuring electricity imported from the distribution network and electricity exported to it. This metering infrastructure is essential for accurately tracking both the power consumed from the grid and the surplus solar energy supplied back. The regulations mandate that distribution companies install revenue-grade import/export meters with time-of-use capability to ensure accurate measurement and billing. The commission disclosed that electricity exported to the grid will attract credits based on an export tariff approved by NERC, creating a financial incentive for consumers investing in solar energy systems. Monthly electricity bills issued to participating customers will indicate imported energy, exported energy, applicable tariffs, export credits, and the net amount payable for the billing period. A significant feature of the framework allows unused export credits to be carried forward to subsequent billing cycles, enabling customers to offset future electricity costs with accumulated credits from excess renewable energy supplied to the grid. The initiative is expected to boost distributed renewable energy generation while helping consumers reduce electricity costs and improve power reliability. For many large-scale organisations, solar installations often generate excess electricity during peak sunshine hours, especially on weekends or during periods of reduced operational activity. The new framework allows such surplus generation to be utilised productively rather than wasted.

The Net Billing Regulations 2026 complement other recent NERC initiatives aimed at improving electricity access across Nigeria. In April 2026, the commission issued the Mini-Grid Regulations 2026, which raised capacity thresholds for mini-grids to 5 megawatts for isolated systems and 10 megawatts for interconnected systems, providing a comprehensive framework for the development, operation, and oversight of mini-grids, with a focus on attracting investment and ensuring consumer protection in underserved and unserved communities. Industry groups representing renewable energy developers had lobbied for clearer rules governing grid-tied solar for commercial customers for several years, arguing that regulatory ambiguity was suppressing investment even among companies willing to commit capital. Together, these regulatory reforms represent a concerted effort to decentralise electricity generation, attract private capital into distributed energy projects, and accelerate Nigeria’s transition toward a more sustainable and reliable power sector.

NERC advised stakeholders and interested participants seeking additional information on the programme to consult the Net Billing Regulations 2026, which are available on the commission’s official website. The commission urged interested customers to begin the process by applying to their distribution company for a technical feasibility assessment. Once approved, participants must execute a Net Billing Agreement and register with NERC before they can begin exporting power. The launch of the Net Billing Regulation marks a significant shift in Nigeria’s electricity landscape, opening the door for businesses, industries, and larger households to become active participants in the country’s energy supply rather than passive consumers — and to be compensated accordingly.