NERC’s new net billing rules let Nigerians sell excess solar power to the grid

Nigeria has taken a major step toward expanding electricity access and accelerating renewable energy adoption. The Nigerian Electricity Regulatory Commission (NERC) has introduced new rules that allow consumers to sell excess solar power back to the national grid.

The Net Billing Regulations 2026 create a framework for households, businesses and industrial users to generate electricity from renewable sources, mainly solar. They can use the power for their own consumption and earn credits for surplus electricity supplied to distribution companies.

Prosumers can now earn from solar investments

Under the regulations, electricity consumers who install approved renewable energy systems become what NERC calls ‘prosumers’. These are individuals or organisations that both consume and produce electricity. The framework allows them to export excess electricity from their solar photovoltaic (PV) systems to the grid through their distribution companies (DisCos).

The exported electricity will be measured and credited using an export tariff set by the regulator. This creates a formal market for surplus solar energy. Consumers can offset electricity costs and potentially earn extra income from their power investments.

Nigeria’s electricity deficit remains huge

The policy comes as Nigeria still struggles with a severe electricity deficit. The country has an installed power generation capacity of about 13,625 megawatts (MW). But actual power supplied to the national grid typically ranges between 4,000 MW and 4,500 MW. This is far below the estimated national demand of roughly 20,000 MW.

Official figures from December 2025 showed only 5,151 MW of installed capacity was available for dispatch. That is just 38 per cent of total capacity. Experts blame the gap on inadequate sector financing, gas supply shortages, weak contract enforcement, ageing transmission infrastructure, poor revenue collection and recurring grid disturbances.

Millions of Nigerians still depend on petrol and diesel generators. Power shortages cost the economy about $29 billion annually in lost productivity and output.

Eligibility and technical requirements

Eligible participants must be connected to a licensed distribution company’s network. They must install renewable energy systems that meet technical and safety standards. Approved systems must have a minimum capacity of 50 kilowatt-peak (kWp) and a maximum capacity of 1.5 megawatt-peak (MWp).

Before installation, prospective participants must apply to their distribution company for a technical feasibility assessment. Successful applicants will sign a Net Billing Agreement and complete registration with NERC. Approved users will get bidirectional net meters that measure both electricity consumed from the grid and electricity exported back into the network.

Broader impact on Nigeria’s power sector

NERC says the regulations are designed to promote renewable energy adoption, improve energy security, attract private investment and support the integration of distributed energy resources into Nigeria’s electricity market. The commission believes the initiative will strengthen grid reliability, expand available electricity supply and support the country’s transition to cleaner energy sources.

The Net Billing Regulations 2026 are expected to complement ongoing reforms aimed at improving generation, transmission and distribution across Nigeria’s power sector. The goal is a more resilient and diversified energy future.