Nigeria’s electricity regulator has unveiled plans for new net billing regulations aimed at accelerating renewable energy adoption and allowing consumers to sell excess power back to the grid, in a major step toward decentralised electricity generation.
The initiative was announced by the Nigerian Electricity Regulatory Commission (NERC) on Wednesday, as part of its Net Billing Regulations 2026, which will enable eligible electricity users to generate power—mainly from solar—and export surplus electricity to distribution networks.
Under the proposed framework, participating consumers, described as “prosumers,” will be allowed to install renewable energy systems, primarily solar photovoltaic units, for self-consumption while feeding excess electricity into the grid in exchange for credits.
The regulator said the policy is designed to strengthen energy security, improve electricity reliability, and encourage private-sector participation in distributed power generation.
It also forms part of Nigeria’s broader push to reduce dependence on the national grid, which has long struggled with supply shortages, infrastructure constraints and frequent outages.
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How the system will work
Under the new rules, eligible participants must be connected to a licensed distribution company and install renewable energy systems ranging from 50 kilowatt-peak (kWp) to 1.5 megawatt-peak (MWp).
Applicants will be required to obtain approval from their distribution company, sign a Net Billing Agreement, and register with NERC before connecting to the system.
Approved users will receive bidirectional smart meters capable of measuring both electricity drawn from and exported to the grid.
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Surplus electricity fed back into the system will be credited at tariffs set under the new regulations.
Push for clean energy and private investment
The policy is expected to boost adoption of solar energy among households, businesses and industrial users seeking more reliable and cost-effective power alternatives.
It also aligns with Nigeria’s broader climate commitments by promoting cleaner energy sources and reducing reliance on fossil-fuel-based generation.
Energy analysts say the move could unlock significant private investment in distributed energy systems, particularly in commercial and industrial sectors where power costs remain high due to dependence on diesel generators.
However, successful implementation will depend on clear tariff structures, grid readiness, and the financial capacity of distribution companies to manage two-way power flows.
Despite these challenges, the new framework signals a gradual shift in Nigeria’s electricity market toward more flexible, decentralised and renewable-based systems—an approach increasingly adopted across emerging economies facing similar power supply constraints.
