The Mini-Grid Regulations 2026: what changes for developers and operators

Scope and status

The Mini-Grid Regulations 2026 (Regulation No. NERC-R-001-2026) were published by NERC on 10 April 2026, with the accompanying schedules published separately on 3 June 2026. The 2023 Regulations (NERC-R-117-2023) applied to isolated and interconnected mini-grids of up to 1 MW per site. The 2026 Regulations apply to isolated mini-grids of up to 5 MW per site and interconnected mini-grids of up to 10 MW per site, and state that no separate licensing regime is created for projects above 1 MW within those limits.

The option to register, rather than obtain a permit, remains available for isolated systems with distributed power not exceeding 100 kW, as under the 2023 Regulations. The Regulations also address the role of State Electricity Regulatory Commissions: where a state regulator has assumed oversight, the Regulations apply only to matters remaining within NERC’s jurisdiction, and NERC may rely on equivalent state approvals to avoid duplication.

Permits and distribution company obligations

NERC may issue a permit or register a tripartite agreement within 30 business days of a complete application, a timeline broadly consistent with 2023. What changes is the discipline imposed on distribution companies:

• A distribution company asked for a no-objection to an isolated mini-grid must respond within 15 business days, failing which it is deemed to have issued one.
• An objection based on the company’s own expansion plans lapses if physical construction has not begun within 12 months, or energisation has not occurred within 24 months, unless NERC grants an extension.
• Distribution companies must maintain a public registry of unserved and underserved areas and publish feeder-level Hosting Capacity Information, updated at least every 12 months and within 60 days of a material feeder change.
• After commissioning documents are submitted, the distribution company must issue energisation approval or written technical reasons within 15 business days.

Interconnection and export

Interconnected projects above 1 MW require a System Impact Study limited to matters relevant to safe interconnection. Solar projects of 1 MW or less may use a simplified pathway: where published hosting capacity is sufficient and the project meets standard technical conditions, a Short-Form System Impact Study Confirmation may suffice. Projects are assigned an operating mode of non-export, limited export or managed export.

Interconnected mini-grids of at least 1 MW, and smaller ones where NERC approves, may apply for export capability at the point of common coupling. The distribution company must decide within 30 business days, giving documented reasons for any rejection. If the parties cannot agree an export tariff within 30 business days of technical approval, a default methodology in Schedule 8 applies. Commercial terms between operator and distribution company may include a Network Asset Use Fee and a Cost of Energy charge, both determined under Schedule 8.

Tariffs

Tariffs continue to be set through the NERC mini-grid tariff model, with a five-year control period. The default loss benchmarks of 4% technical and 3% non-technical are unchanged from 2023, but NERC may now approve higher project-specific allowances, generally capped at 8% and 5% respectively and reduced over no more than 36 months from commercial operation. Registered operators may still agree tariffs directly with a community representing customers who consume at least 60% of output, subject to NERC review.

Grid arrival and compensation

The 12-month notice requirement before grid extension reaches an isolated mini-grid is retained. The 2026 Regulations list a wider range of transition options, including conversion to an interconnected mini-grid, asset transfer, continued operation under a commercial arrangement, or orderly exit, and allow either party to refer the matter to NERC if no agreement is reached within 60 business days.

Under the 2023 Regulations, compensation on asset transfer comprised the depreciated book value of network assets plus an amount equivalent to pre-tax profit over the 24 months before handover. The 2026 Regulations instead base compensation on the higher of verified indexed historical cost net of depreciation and verified net depreciated replacement cost, plus approved transition costs. Additional amounts depend on timing:

• Within five years of commercial operation: unrecovered development and construction costs, plus revenue for the preceding 12 months.
• Between the fifth and tenth anniversaries: revenue for the preceding 12 months.
• From the tenth anniversary: the base amount only, unless NERC determines otherwise.

Grant-funded and customer-funded assets may be excluded or treated separately, and the operator may continue operating until compensation is paid or legally provided for.

Site exclusivity and reporting

Exclusivity of up to 12 months may be granted by the community and distribution company, with NERC able to add up to a further 12 months on evidence of progress. Registration now requires boundary coordinates, evidence of community engagement and a milestone plan, with a progress report due within six months and a public exclusivity registry. Operators below 1 MW report annually; those above 1 MW report quarterly.

An independent adviser can help developers and investors assess how these provisions affect site selection, interconnection strategy and the downside protection a project can realistically expect.