Nigerian Electricity Regulatory Commission (NERC) has unveiled a new billing framework that allows electricity consumers with renewable energy installations to earn credits for excess power exported to the national grid.
Other News
The framework was contained in the Net Billing Regulations 2026 released by the Commission on June 3.
According to the regulation, the framework establishes a standard structure for the interconnection of renewable energy systems installed at customer premises to electricity distribution networks, while also creating a compensation mechanism for surplus electricity supplied back to the grid.
NERC stated that the regulation was issued in line with the Electricity Act 2023, which empowers the Commission to regulate electricity generation, transmission, distribution, trading, and system operations in Nigeria, while also promoting renewable energy adoption and improved electricity access.
What they are saying
While the regulation shall come into effect on the date it is approved by a resolution of the Commission, NERC said the objective of the framework is to;
- “Establish a standard framework for the interconnection of renewable energy installations at customer premises to an electricity distribution network.”
- “Facilitate the export of surplus power from the customers’ premises to the grid under a credit-based billing system,” and.
- “Provide a clear compensation mechanism for the utilisation of excess power produced by a customer from a renewable energy facility installed at its premises.”
The regulation further stated that the framework is designed to ensure renewable energy systems connected to distribution networks do not compromise “safety and overall network reliability,” while also supporting Nigeria’s energy transition plan.
Under the application and administration framework, NERC said electricity users seeking participation in the net billing arrangement must submit applications to their Distribution Companies alongside technical details of their renewable energy systems.
- It added that upon receiving a complete application, a Distribution Licensee would be required to conduct a technical feasibility study and issue a report within 15 days containing “user load details and history,” “capacity, peak load, and average load of the affected network segment,” and an assessment of the “suitability of the distribution infrastructure for the proposed interconnection.”
The regulation also provides that where an application is approved, both parties must execute a Net Billing Agreement within five days, specifying the approved export capacity, interconnection voltage level, applicable export tariff, and confirmation of compliance with regulatory and technical standards.
NERC stated that users would subsequently register with the Commission and obtain certification before commencing electricity export to the grid.
More insights
Under the commercial arrangement framework contained in Chapter IV of the regulation, NERC said electricity imported by a prosumer from a Distribution Company would continue to be billed at the prevailing retail tariff approved by the Commission.
However, electricity exported to the grid would be credited using an Export Tariff determined through a formula linked to the “Avoided Cost Delivered” and an “Export Tariff Factor.”
- The regulation stated that the Export Tariff Factor has been fixed at 0.55 for off-peak exports and 0.75 for peak exports, subject to future review by the Commission.
- It added that where the calculated off-peak export tariff exceeds or equals the applicable retail tariff, the export compensation payable to the customer would be capped.
NERC also explained that monthly electricity bills issued to participating customers must clearly indicate imported energy, exported energy, applicable import and export tariffs, monthly import charges, export credits, carried-forward credit balances, and the net amount payable for the billing period.
- The framework further allows unused export credits to be carried forward to subsequent billing cycles, enabling customers to offset future electricity costs with accumulated credits from excess renewable energy supplied to the grid.
In addition, the regulation mandates Distribution Companies to install revenue-grade import/export meters with time-of-use capability to separately measure electricity imported from and exported to the grid.
What you should know
Recall that in April this year, the Nigerian Electricity Regulatory Commission (NERC) issued the Mini-Grid Regulations 2026 aimed at improving electricity access across Nigeria, particularly in underserved and unserved communities.
- The new regulation provides a comprehensive framework for the development, operation, and oversight of mini-grids, with a focus on attracting investment and ensuring consumer protection.
- The regulation applies to isolated mini-grids operating independently of distribution companies, up to 5 megawatts.
- It also covers interconnected mini-grids linked to existing distribution networks, up to 10 megawatts.
Mini-grids below 100 kilowatts can be registered, while those above 100 kilowatts require a permit from NERC.
