Businesses, Institutions Can Now Sell Excess Solar Electricity To DisCos Under New NERC Regulation
The Nigerian Electricity Regulatory Commission has commenced the implementation of the Net Billing Regulations 2026, introducing a major reform that allows eligible electricity consumers with renewable energy systems, particularly solar installations, to generate electricity for personal use and sell excess power to electricity distribution companies.
The new framework is expected to accelerate the adoption of renewable energy technologies across Nigeria, attract more private sector investment into electricity generation and improve power supply through distributed energy contributions to the national grid.
In a public notice titled “Commencement of the Net Billing Regulations 2026,” released on Wednesday, the commission informed electricity consumers, distribution companies, renewable energy developers, commercial and industrial operators, and the general public about the commencement of the new regulatory regime.
According to the regulator, the framework is designed to transform qualified electricity customers into what it described as “prosumers” — consumers who not only consume electricity but also generate and export electricity to the distribution network.
The commission explained that eligible customers must own renewable energy systems, mainly solar photovoltaic installations, with a minimum installed capacity of 50 kilowatt peak and a maximum capacity of 1.5 megawatt peak.
NERC stated that the regulation establishes a formal framework enabling eligible electricity customers to generate renewable energy primarily for their own consumption while exporting surplus electricity into the grid under a net billing arrangement.
“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 arrangement creates an opportunity for businesses and institutions operating large solar systems to monetize excess electricity that would otherwise remain unused.
Under the framework, customers will first utilize electricity generated from their renewable energy installations. However, where the systems generate more electricity than needed at any particular time, the surplus energy can be exported to the distribution company’s network.
The exported electricity will be measured through specially installed bidirectional meters capable of recording both electricity consumed from the national grid and electricity supplied back into it.
NERC explained that customers participating in the scheme would receive energy credits in line with tariffs approved by the commission.
The development marks a significant departure from Nigeria’s traditional electricity model where consumers solely depend on distribution companies for power supply.
With the introduction of the net billing arrangement, qualified electricity users can now become small-scale electricity producers contributing directly to the distribution network.
Industry experts believe the initiative could significantly benefit factories, shopping malls, universities, hospitals, industrial estates, telecommunications facilities and large commercial enterprises already operating extensive solar infrastructure.
Many of these organizations often generate excess electricity during peak sunshine periods, weekends or periods of reduced operational activities.
Before the introduction of the regulation, such excess energy could not be effectively utilized or monetized.
Analysts say the framework may help reduce operational costs for businesses while improving energy efficiency and supporting cleaner electricity generation.
The commission stated that the regulations are aimed at achieving multiple strategic objectives within Nigeria’s electricity sector.
According to NERC, the objectives include promoting the adoption of renewable energy technologies, improving energy security and reliability for consumers, encouraging private sector participation in distributed electricity generation, reducing greenhouse gas emissions and facilitating efficient integration of renewable energy systems into distribution networks.
The initiative comes amid rising interest in alternative energy sources as households and businesses increasingly search for reliable and cost-effective electricity solutions.
Nigeria’s power sector has faced persistent challenges for decades, including inadequate electricity generation, weak transmission infrastructure and distribution inefficiencies.
As a result, many Nigerians have resorted to self-generation using petrol and diesel generators, while solar energy adoption has also continued to grow rapidly in recent years.
Energy experts believe the net billing framework could help unlock significant private investment in renewable energy development and reduce pressure on the already strained national grid.
To qualify for participation, NERC said applicants must satisfy several technical and regulatory conditions.
The commission explained that participants must be connected to a licensed electricity distribution company’s network and install renewable energy systems that comply with approved technical standards and regulatory requirements.
Applicants are also required to obtain approval from the relevant distribution company, execute a formal net billing agreement and register with the commission.
NERC stated that interested customers would undergo technical feasibility assessments before being admitted into the scheme.
According to the commission, approved participants would be provided with bidirectional metering facilities necessary for measuring electricity imported from and exported to the distribution network.
“Approved participants shall be provided with appropriate bidirectional net metering facilities to measure electricity imported from and exported to the distribution network. Exported energy shall be credited in accordance with the export tariff approved by the commission,” the notice stated.
The commission added that the capacity threshold for participation indicates that the scheme is primarily targeted at medium- and large-scale electricity consumers rather than small residential solar users.
Industry stakeholders have described the regulation as a positive step toward modernizing Nigeria’s electricity sector and supporting the country’s broader energy transition agenda.
Experts also believe that encouraging distributed renewable energy generation could help improve grid stability, reduce carbon emissions and support sustainable economic growth.
The introduction of the Net Billing Regulations 2026 aligns with ongoing government efforts to increase the contribution of renewable energy within Nigeria’s electricity mix and reduce dependence on fossil fuel-based power generation.
Analysts say the success of the framework will largely depend on effective implementation, cooperation from distribution companies and the ability of regulators to ensure transparent pricing and metering systems for participating customers.
