The Nigerian Electricity Regulatory Commission (NERC) has introduced a new billing framework that enables electricity consumers with renewable energy installations to earn credits for excess electricity exported to the national grid.
The framework is contained in the Net Billing Regulations 2026, released by the Commission on June 3, 2026.
According to NERC, the regulation establishes a standard structure for connecting renewable energy systems installed at customer premises to electricity distribution networks. It also creates a compensation mechanism for surplus electricity supplied back to the grid.
The Commission explained that the regulation was issued under the provisions of the Electricity Act 2023, which empowers NERC to regulate electricity generation, transmission, distribution, trading and system operations while promoting renewable energy adoption and improved electricity access across Nigeria.
NERC said the regulation will take effect immediately after approval through a resolution of the Commission.
The primary objectives of the framework include creating a standard process for connecting renewable energy installations to distribution networks, facilitating the export of excess electricity through a credit-based billing system, and establishing a transparent compensation mechanism for customers generating renewable energy.
According to the Commission, the regulation is designed to ensure that renewable energy systems connected to distribution networks do not compromise safety standards or the reliability of the electricity grid. It also aligns with Nigeria’s broader energy transition goals.
Under the new framework, customers seeking to participate in the net billing arrangement must submit applications to their respective Distribution Companies (DisCos), along with technical details of their renewable energy installations.
Upon receiving a complete application, the Distribution Licensee is required to conduct a technical feasibility assessment and provide a report within 15 days.
The report must include customer load history, network capacity details, peak and average load information, and an assessment of whether the existing distribution infrastructure can support the proposed interconnection.
Where an application is approved, both parties must execute a Net Billing Agreement within five days. The agreement will specify the approved export capacity, voltage level, applicable export tariff and compliance requirements.
NERC further stated that approved participants must register with the Commission and obtain certification before exporting electricity to the grid.
Under the commercial framework, electricity imported from a Distribution Company will continue to be billed at the prevailing retail tariff approved by NERC.
However, electricity exported to the grid will attract credits based on an Export Tariff calculated using the “Avoided Cost Delivered” methodology and an Export Tariff Factor.
The Commission fixed the Export Tariff Factor at 0.55 for off-peak electricity exports and 0.75 for peak-period exports. These rates remain subject to future regulatory review.
The regulation also provides that where the calculated off-peak export tariff equals or exceeds the applicable retail tariff, the compensation payable to customers will be capped.
To ensure transparency, monthly bills issued to participating customers must clearly show imported electricity, exported electricity, import and export tariff rates, monthly charges, export credits, carried-forward credit balances and the net amount payable.
One of the key benefits of the framework is the ability for customers to carry forward unused export credits to future billing cycles. This allows consumers to offset future electricity costs using credits accumulated from excess renewable energy supplied to the grid.
In addition, Distribution Companies are required to install revenue-grade import and export meters equipped with time-of-use capabilities to accurately measure electricity flowing in both directions.
The introduction of the Net Billing Regulations follows NERC’s release of the Mini-Grid Regulations 2026 in April. The earlier regulation was designed to improve electricity access in underserved and unserved communities across the country.
The Mini-Grid Regulations provide a comprehensive framework for the development, operation and regulation of mini-grid projects. The framework applies to isolated mini-grids operating independently of Distribution Companies with capacities of up to five megawatts.
It also covers interconnected mini-grids connected to existing distribution networks with capacities of up to 10 megawatts.
Under the regulation, mini-grids below 100 kilowatts can be registered, while projects exceeding 100 kilowatts are required to obtain a permit from NERC.
Industry stakeholders believe the new net billing framework could encourage wider adoption of solar and other renewable energy technologies by providing consumers with financial incentives for generating clean electricity and contributing excess power to the national grid.
