Net billing in Nigeria: what the 2026 regulations mean for commercial and industrial sites

What the Regulations establish

The Nigerian Electricity Regulatory Commission (NERC) published the Net Billing Regulations 2026 (Regulation No. NERC-R-002-2026) and announced their commencement on 3 June 2026. They set out a standard framework for connecting renewable installations at customer premises to a distribution network and for crediting exported energy against the customer’s electricity bill. A customer with a commissioned arrangement is referred to as a prosumer.

As published, the framework applies to solar only. The Regulations state that small wind and hydro may be added once NERC issues the relevant technical standards and an updated schedule.

Eligibility and capacity limits

The Regulations apply to systems with an installed capacity of at least 50 kWp and not exceeding 1.5 MWp per user. Within that range, several further limits apply:

• Approved export capacity may not exceed 120% of the customer’s Eligible Load Demand, defined as the highest average monthly maximum demand over the 12 months before application or, where maximum demand is not recorded, the contracted load.
• A distribution company may approve more where the customer demonstrates verifiable and imminent load growth, up to the projected demand within 24 months.
• The limit applies to the inverter-rated AC export capacity. The DC array may be larger, provided export is limited through certified inverter settings or export control.
• Aggregate prosumer export on a given 0.4 kV, 11 kV or 33 kV network asset may not exceed 30% of that asset’s average load, and connections are granted on a first-come, first-served basis subject to technical feasibility.

The feeder-level cap matters: sites on feeders with several existing prosumers may find export constrained regardless of their own load.

How exported energy is valued

Imported energy continues to be billed at the applicable retail tariff. Exported energy is credited at an Export Tariff that NERC derives from the Avoided Cost Delivered, which is built from the generation and transmission cost components in the distribution company’s Multi-Year Tariff Order, adjusted for transmission losses. An Export Tariff Factor is then applied: 0.55 for off-peak exports and 0.75 for exports during the peak period, which the Regulations define as 6 pm to 9 pm. Where the calculated off-peak export tariff equals or exceeds the prosumer’s retail tariff, it is capped by reference to the retail tariff.

The peak factor is available only where the system includes a battery verified by the Nigerian Electricity Management Services Agency (NEMSA) with usable capacity of at least two hours of rated output at 50% of installed solar capacity. Systems without a qualifying battery are settled at the off-peak rate for all exports. The same applies to any system provisionally commissioned with a standard bidirectional meter before a time-of-use meter is available; the distribution company must then upgrade the meter within 12 months.

Credits, not cash

Credits are calculated in naira and applied only against the monthly import bill. Where credits exceed the bill, the balance is carried forward, but the Regulations state that no cash payment is made to the prosumer except where expressly provided. Carried-forward credit is netted off on the anniversary of connection, and the distribution company must give at least 30 days’ written notice before a balance expires. Credits transfer with the premises to a new occupier but are extinguished if the system is relocated.

NERC is to review settlement parameters at least every 12 months, or sooner if avoided cost moves by more than 20%. Parameters in force when the agreement is signed remain fixed for at least 12 months from connection. Beyond that, export values will move with regulated tariffs.

Process and timelines

The process runs through the distribution company, NERC and NEMSA, with prescribed periods expressed in business days:

• Technical feasibility report from the distribution company within 15 days of a complete application.
• Net Billing Agreement signed within 5 days of that report, followed by registration with NERC, which issues a certificate within 10 days.
• Connection charge paid within 15 days, or 30 days where reinforcement is needed; interconnection works completed within 30 days, or 120 days for major reinforcement at 11 kV or 33 kV.
• NEMSA inspection within 10 days of application, and commissioning by the distribution company within 3 days of a complete request.

Connection charges follow a NERC-approved methodology and are published by each distribution company. The applicant also bears interconnection costs up to the connection point.

Implications for commercial and industrial sites

For most sites, self-consumption will remain worth more than export, because exported energy is credited at a fraction of avoided cost rather than at the retail tariff. Net billing is best treated as a way to recover value from unavoidable surplus, such as weekend or holiday generation, rather than as a reason to oversize. The template agreement annexed to the Regulations states that the prosumer shall own the system on its premises, so sites considering a lease or third-party ownership model should take advice on how that requirement applies to them.

An independent adviser can model self-consumption and export under the published tariff mechanics and review whether a proposed configuration, including any battery, is justified by the site’s own load.