The Nigerian Electricity Regulatory Commission has introduced a new billing framework that will enable 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, which was released by the Commission on June 3.

According to the regulation, the framework establishes a standard structure for connecting renewable energy systems installed at customer premises to electricity distribution networks. It also creates a compensation mechanism through which consumers can receive credits for surplus electricity supplied back to the grid.

NERC explained that the regulation was issued pursuant to the Electricity Act 2023, which grants the Commission authority to regulate electricity generation, transmission, distribution, trading and system operations across Nigeria. The law also mandates the promotion of renewable energy adoption and improved access to electricity.

The Commission stated that although the regulation will take effect from the date it is approved through a resolution of the Commission, its objectives are 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.”

NERC further stated that the framework is designed to ensure that renewable energy systems connected to distribution networks do not compromise “safety and overall network reliability,” while also supporting Nigeria’s broader energy transition agenda.

Under the application and administration provisions of the regulation, electricity consumers seeking to participate in the net billing arrangement are required to submit applications to their respective Distribution Companies, alongside technical specifications of their renewable energy systems.

The Commission stated that once a complete application is received, the Distribution Licensee must conduct a technical feasibility assessment and issue a report within 15 days. The report is expected to contain “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, the customer and the Distribution Company must execute a Net Billing Agreement within five days. The agreement must specify the approved export capacity, interconnection voltage level, applicable export tariff and confirmation of compliance with all regulatory and technical standards.

NERC added that participating users will subsequently be required to register with the Commission and obtain certification before commencing electricity export to the national grid.

Under the commercial arrangement framework outlined in Chapter IV of the regulation, electricity imported by a prosumer from a Distribution Company will continue to be billed at the prevailing retail tariff approved by the Commission.

However, electricity exported to the grid will attract credits based on an Export Tariff determined through a formula linked to the “Avoided Cost Delivered” and an “Export Tariff Factor.”

According to the regulation, the Export Tariff Factor has been fixed at 0.55 for off-peak electricity exports and 0.75 for peak-period exports, although these rates remain subject to future review by the Commission.

The regulation further states that where the calculated off-peak export tariff is equal to or exceeds the applicable retail tariff, the compensation payable to the customer will be capped.

NERC 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 also permits unused export credits to be carried forward into subsequent billing cycles, allowing customers to offset future electricity costs with credits accumulated from excess renewable energy supplied to the grid.

In addition, Distribution Companies are required to install revenue-grade import/export meters equipped with time-of-use capabilities to separately measure electricity imported from and exported to the national grid.

The latest regulation comes months after NERC issued the Mini-Grid Regulations 2026 in April, aimed at improving electricity access across Nigeria, particularly in underserved and unserved communities.

The Mini-Grid Regulations 2026 provide a comprehensive framework for the development, operation and supervision of mini-grids, with the objective of attracting investment into the sector while ensuring adequate consumer protection.

The regulation applies to isolated mini-grids that operate independently of distribution companies and have 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 with capacities below 100 kilowatts can be registered, while those with capacities exceeding 100 kilowatts are required to obtain a permit from NERC before operation.