Got excess power? Your business may now be able to sell it to the national grid. Find out how.
Businesses Can Now Sell Their Electricity to the National Grid - Find Out if You’re Eligible.
On 3 June 2026, Nigeria's electricity regulator, NERC, announced the commencement of the Net Billing Regulations 2026. The headlines made it sound like a breakthrough:
For a country that has spent decades living with blackouts, rationing generators, and watching electricity bills climb faster than incomes, that sounds like the beginning of something transformative. The reality is more complicated, and understanding the difference between what this policy promises and what it actually delivers is the most financially useful thing any Nigerian can do right now.
Start with what net billing actually is
Under the old way of thinking about solar, a building generates electricity from panels on its roof, uses what it needs, and whatever is left over isn’t put to any use. Net billing creates a formal channel for that surplus. A two-way meter records how much electricity your building pulls from the grid and how much it pushes back. At the end of each month, those two figures are set against each other, and if you exported more than you imported, you receive a credit that reduces your future bills. You are not paid cash. You receive a reduction on what you owe your distribution company (DisCo) in the months ahead.
A credit on a future electricity bill is only as reliable as the DisCo holding it
Nigeria's distribution companies have been financially strained for years, collecting less revenue than the value of electricity they distribute each month. The Bloomfield LP legal analysis of the regulations notes that DisCos are required to hold customer credits in a separate, ring-fenced account, which offers some protection. But it also flags that the security of that credit depends directly on how sound the DisCo's finances are. For a country where collection efficiency across DisCos averaged 81.17% as recently as February 2026, according to NERC's own Commercial Performance Factsheet, that is not a trivial concern.
Most of the coverage has missed one important detail. These regulations are not for the average household. The minimum system size to qualify for net billing is 50 kilowatts peak, or 50kWp, and the maximum is 1.5 megawatts peak. To put that in perspective, a typical Lagos home solar installation runs between 3kWp and 10kWp. The 50kWp floor is five to sixteen times larger than what most households install. In plain terms, if you have rooftop solar at your house, these rules do not apply to you. The scheme is designed for factories, hospitals, shopping complexes, office buildings, hotels, and large estates. These are the prosumers, a word that combines producer and consumer, that NERC is speaking to. And that is intentional.
The regulations also cap approved export capacity at 120% of a building's own measured electricity demand. A business cannot register a system sized primarily to sell power to the grid. It can only export what it genuinely cannot use itself. The scheme is built on self-consumption first, grid export second. This matters because of how the export price is structured.
When your surplus reaches the grid, you are not paid the same rate you pay to buy electricity. You are paid a fraction of what is called the avoided cost, which is roughly the wholesale cost of generating and moving power across the national network. That fraction is set at 0.55 during off-peak hours, and 0.75 during the evening peak between 6pm and 9pm. But the higher rate only applies if your system includes a battery storage unit verified by NEMSA, Nigeria's electricity meter standards authority. Solar panels produce electricity during the day. The evening peak is after sundown. Without batteries to store daytime generation and release it later, everything you export earns the lower off-peak rate. One unit sold back to the grid is worth considerably less than one unit purchased from it.
The financial logic this creates is straightforward and worth stating directly. The return on investment for a net billing installation comes primarily from the electricity you generate and use yourself, not from what you sell. Every kilowatt-hour your business consumes from its own panels instead of buying from the grid saves money at the full retail tariff rate. Every kilowatt-hour you export earns a fraction of that. Size your system around your own consumption, not around how much you can sell, and the numbers work. Size it around exports, and the numbers will disappoint you.
One constraint
There is one more structural constraint that businesses need to understand before they invest. The regulations cap the total surplus any section of the distribution network can absorb at 30% of that line's average load, and access is allocated on a first-come, first-served basis. Think of it like a queue for a finite resource. If enough businesses in your area have already signed up, the available export capacity on your feeder line may be fully subscribed before your application is processed. The Bloomfield brief recommends that any business serious about joining the scheme should ask its DisCo to confirm remaining capacity on the relevant line before spending anything.
The regulation's limitations should not obscure what has changed. For years, the possibility of a Nigerian business generating its own power and receiving any value at all for surplus electricity existed in regulatory grey. There was no official framework, no formal meter standard, and no recognised settlement process. The Net Billing Regulations 2026 create all of those things. For large commercial and industrial energy users, estates, and off-grid developers, this is a meaningful new tool.
Global regulatory experience supports the direction Nigeria is taking. The Energy Regulators Regional Association, in a December 2025 paper examining shifts across Europe and the Caucasus, concluded that net billing provides a more durable and equitable foundation for integrating distributed solar generation than earlier net metering schemes, which had a tendency to create unfair cost transfers between those who could afford solar and those who could not.
That equity dimension connects directly to the ordinary Nigerian who cannot afford a 50kWp commercial installation. Every time a large business cuts its dependence on the grid, it reduces the strain on a distribution network that serves everyone. Every time a factory or hospital generates its own daytime power instead of pulling from a system that cannot reliably supply it, there is slightly more available for the residential customer down the road. The benefits are indirect, gradual, and difficult to measure, but they are not zero.
What this policy does not do is give the average Nigerian household a way to earn money from rooftop solar panels. That conversation remains unresolved, and the regulatory framework for it does not yet exist at the national level. The more immediate question is whether businesses that lower their energy costs through net billing will pass those savings on through lower prices, improved services, or further investment. The answer to that question will depend less on what NERC has written and more on how effectively distribution companies implement the framework in practice.
Sources: NERC Nigeria, Commencement of the Net Billing Regulations 2026, June 2026; Bloomfield LP, Power to the Prosumer — With Strings Attached?, June 2026; NERC, Commercial Performance Factsheet, February 2026; Mikheil Odisharia, ERRA Paper: From Net Metering to Net Billing: Ensuring Fair Tariffs in the Age of Prosumers, December 2025.
Fabian Omini
Energy Analyst
Fabian Omini is an energy analyst with a keen interest in translating complex energy and finance topics into clear, accessible narratives for everyday Africans.
