- NERC’s Draft Net Billing Regulations (2025) allow renewable energy users to export surplus power through net meters, earn credits, and roll them forward on future bills.
- Prosumers keep all carbon credits, while DisCos must ensure safety, compliance, and transparent credit management to support Nigeria’s energy transition.
The Nigerian Electricity Regulatory Commission (NERC) has issued the Draft Net Billing Regulations, 2025, pursuant to its powers under the Electricity Act 2023. The regulation introduces a structured framework that allows customers who generate electricity from renewable sources, such as solar or small wind systems, to export surplus power to the national grid and receive compensation through a credit-based billing system.
Objectives of the Regulation
At its core, the regulation seeks to achieve three objectives: First, it creates a standardised framework for connecting renewable energy systems located at customer premises to distribution networks. Second, it provides a compensation mechanism that ensures prosumers, i.e. users who consume and generate electricity, receive fair value for excess power supplied. Third, it safeguards grid reliability and safety by setting technical and operational standards for interconnection.
Eligibility and Scope
The regulation applies to renewable energy systems with a minimum capacity of 50 kilowatts peak (kWp) and a maximum of 5 megawatts peak (MWp) per user. This threshold positions the regulation primarily for commercial and industrial consumers, estates, and institutions with mid- to large-scale installations, rather than small household solar setups. Distribution licensees must administer applications on a first-come, non-discriminatory basis. However, the total capacity of energy injected by prosumers into a given network segment may not exceed 30 per cent of that network’s average load.
Commercial Arrangements
Under the Draft Net Billing Regulations, commercial settlements operate through a two-way accounting system that distinguishes between electricity consumed from the grid and electricity exported into it.
Prosumers must install a net meter, a bi-directional device that records both energy streams. The meter separately tracks electricity imported from the grid and electricity exported into it, ensuring accurate billing and crediting.
- Energy consumed (imports): The prosumer pays the applicable end-user tariff approved by NERC, just like any other customer.
- Energy exported (surplus): The prosumer receives credits valued at an Injected Energy Tariff determined by NERC, which may differ from the retail tariff.
Distribution licensees must issue monthly bills that clearly present the kilowatt-hours imported, the kilowatt-hours exported, the applicable tariffs, and the resulting net amount.
The prosumer pays the balance if consumption exceeds exports within a billing cycle. Conversely, if exports exceed consumption, the difference becomes a carried-forward credit. These credits roll over indefinitely and apply against future electricity bills. Accrued credits transfer to the new owner or occupier when property ownership changes, provided the Net Billing Agreement is also transferred. However, if the renewable energy system relocates to another site, the accumulated credits expire, and the prosumer must initiate a new application.
The regulation requires every distribution licensee to maintain a segregated escrow account or ledger dedicated to prosumer credits to safeguard transparency. All postings, debits, and balances must be reconciled monthly, and prosumers may request statements to verify their credit status.
Technical and Metering Standards
The regulation requires all installations and interconnections to comply with the Distribution Code, the Nigerian Electricity Supply and Installation Standards (NESIS) Regulation 2015, and other technical codes. Certified engineers must carry out installations, and systems must include safety mechanisms such as anti-islanding protection and visible isolators. Prosumers must also install bi-directional meters that separately record imported and exported energy in compliance with the Metering Code.
Environmental and Financial Provisions
The Draft Net Billing Regulations exclusively assign all carbon credits generated from renewable energy systems to the prosumer. By retaining ownership of these credits, prosumers can document and benefit from the emissions reductions associated with their systems. This provision also positions prosumers to participate in potential carbon markets as Nigeria advances its climate policy framework.
The regulations further require prosumers to comply with all applicable health, safety, and environmental laws of the Federal Republic of Nigeria. This ensures that renewable energy integration into the grid occurs without compromising public safety or environmental standards.
Significance for Nigeria’s Energy Transition
The Draft Net Billing Regulations provide clarity for businesses, investors, and institutions seeking to adopt renewable energy. By codifying the rights and responsibilities of prosumers and distribution companies, the framework strengthens investor confidence, reduces dependence on fossil-fuel backup generation, and advances Nigeria’s energy transition objectives.