The Nigerian Electricity Regulatory Commission (NERC) has introduced the Net Billing Regulations 2026, allowing electricity consumers in Nigeria to generate solar power for their own use and sell excess electricity to the national grid.
The new framework is designed to ease Nigeria’s persistent electricity shortfall by encouraging the adoption of renewable energy and improving power supply reliability across the country.
Nigeria currently has about 13,625 megawatts (MW) of installed power generation capacity but typically generates only around 4,000 to 4,500 MW for distribution on the national grid.
This is significantly below the estimated national demand of about 20,000 MW.
Official data from December 2025 showed that only 5,151 MW of the installed capacity was available for dispatch, meaning just 38 per cent of total capacity was usable at the time.
The wide gap between installed capacity and actual generation has been attributed to liquidity challenges in the power sector, weak contract enforcement, gas supply constraints, outdated transmission infrastructure, frequent grid collapses and poor revenue collection by distribution companies.
The situation has also forced millions of households and businesses to rely heavily on petrol and diesel generators, with power outages estimated to cost Nigeria about $29 billion annually in lost economic output.
Under the new regulations, NERC said consumers will be able to install renewable energy systems, mainly solar photovoltaic (PV) plants, and export excess electricity to their distribution companies through a structured framework.
The commission explained that the policy aims to promote renewable energy adoption, improve energy security and reliability, attract private investment in distributed generation, reduce greenhouse gas emissions and support better integration of renewable systems into the national grid.
Eligible participants, referred to as “prosumers,” must be connected to a Distribution Licensee’s network and install renewable energy systems that meet technical standards.
The systems must have a minimum capacity of 50 kilowatt-peak (kWp) and a maximum of 1.5 megawatt-peak (MWp).
Prospective participants are required to apply to their Distribution Licensee for a technical feasibility assessment before installation.
If approved, they must sign a Net Billing Agreement and register with NERC to participate in the scheme.
NERC said approved participants will be equipped with bidirectional net metering devices to measure both electricity consumed from the grid and power exported to it.
Electricity exported to the grid will be credited at an export tariff to be determined by the commission.
According to NERC, the scheme is expected to provide households, businesses and industrial users with a formal avenue to monetise surplus solar energy, increase available electricity supply on the grid, and reduce pressure on Nigeria’s overstretched power infrastructure.
The regulator added that the Net Billing Regulations will complement ongoing reforms aimed at improving generation, transmission and distribution performance across the electricity value chain.
