Ten things you need to know as Nigeria opens its grid to solar sellers

 

Nigeria has officially opened its electricity grid to solar sellers.

As of June 3, 2026, the Net Billing Regulations 2026, made under the Electricity Act 2023 by the Nigerian Electricity Regulatory Commission (NERC), give commercial and industrial electricity users the right to feed surplus solar power back into the grid and receive credit for it.

Bloomfield LP, one of Nigeria’s leading energy law practices, has published a detailed plain-language guide to the rules on how new net billing rules give commercial electricity users a path to sell surplus solar power.

Here are the ten things every business, developer, financier and distribution company should understand before acting.

The basic idea is simple, but the economics are not

Install solar at your premises, run your surplus into the grid through a two-way meter, and each month, your exports are set off against your imports. Anyone who does this gets a new label in the regulations: a “prosumer” — someone who both produces and consumes.

But Ayodele Oni, partner at Bloomfield LP, is direct about what this is not.

“This is not a fair swap,” the guide states. “When you buy power from the grid, you pay the normal retail price, which is high. When you sell your surplus back, you are paid a much lower price, which is a fraction of the grid’s avoided cost.” One unit sent out, in other words, is worth considerably less than one unit taken in.

The export tariff formula rewards batteries, not rooftop solar

The regulations set two export tariff rates. The off-peak rate applies a factor of 0.55 to the grid’s avoided cost. The peak rate applies a factor of 0.75, but only between 6 and 9 p.m., and only if the prosumer has installed a battery storage system verified by the Nigerian Electricity Management Services Agency.

Because solar naturally generates in the daytime, most exported solar automatically lands at the lower rate.

As the Bloomfield guide puts it: “Most exported solar earns the lowest rate unless you add storage which strengthens, rather than weakens, the case for sizing the system to your own use.” The evening peak window, the one that pays better, is a battery incentive, not a solar incentive.

The primary lesson is self-consumption, not grid sales

Given the export pricing structure, the regulations carry one central commercial message.

“Build your system to power your own building, not to sell to the grid,” the guide states plainly. “Size it around what you actually use during the day. Treat money from selling surplus as a small bonus, never as the reason for the investment.”

Any financial model built on the assumption that exported power earns retail prices, the Bloomfield analysis warns, “is wrong, and will make the numbers look better than they are.” Developers and financiers pitching the scheme as a revenue play should revisit those projections carefully.

This is a commercial framework, not a household one

The regulations cover only systems between 50 kilowatts and 1.5 megawatts, a threshold deliberately high enough to exclude ordinary homes and small shops.

The intended market, as described in the Bloomfield guide, is “factories, shopping centres, office complexes, hotels, hospitals and estates, not household rooftops.”

There is also a ceiling: systems cannot be approved for export capacity exceeding 120 percent of the customer’s own measured demand. The framework is explicitly built on the assumption that prosumers generate primarily for themselves, which means anyone trying to register a system sized for grid sales rather than self-consumption will find the DisCo, the local distribution company, unable to approve it.

There is a queue, and it is already filling

Network capacity is finite. The regulations cap the total surplus any section of the grid can absorb at 30 percent of that line’s average load, with access allocated strictly on a first-come, first-served basis. “This turns space on the line into something you can run out of,” the guide notes.

“If businesses near you have already signed up, the room for your exports may be gone before you begin.”
The practical advice from Bloomfield is to ask the DisCo to confirm available capacity before spending a naira, and move quickly in competitive locations. An industrial estate, the guide observes, “is in effect a race for a limited allowance.”

Your credit is not cash, and it does not travel with you

When monthly exports exceed imports, the prosumer receives no payment. They receive a bill credit, which carries forward month to month but is netted off at the annual anniversary of grid connection, with a minimum of 30 days’ notice before expiry. More critically, the credit is attached to the building, not the business. “If you sell the premises,” the guide explains, “the credit can pass to the buyer — but only if the net billing agreement is formally transferred to them. A departing tenant, with no one to transfer to, simply loses it; and moving the solar system to a new site wipes it entirely.”

Given that most of the target market rents rather than owns, the Bloomfield guide calls this “a real trap.”

The solar arrangement and the lease, it advises, must be negotiated together — including who owns the system at lease-end, who keeps the credit, and what happens if the business relocates.
Connection costs all fall on the customer.

There are no subsidies for grid connection under these rules. The prosumer bears the cost of a one-time connection charge, any network upgrade the DisCo requires, the two-way meter, and a COREN-registered engineer to design and certify the installation. Anti-islanding and synchronisation protections, which prevent the system from feeding the line during a grid outage, are mandatory and must be certified before the DisCo will connect the system.

“None of this is unfair for plugging into a shared grid,” the guide acknowledges, “but it all belongs in your budget from day one, not as a surprise later.” Lines that need upgrading will also cost more and take longer, which ties back to the earlier point about joining the queue early.

The contract leans toward the DisCo

The standard net billing agreement is largely non-negotiable, and it tilts toward the distribution company. The prosumer indemnifies the DisCo against damage caused by its system; the DisCo retains broad rights to disconnect and access equipment; and the agreement can be terminated on notice for breach.

“You will have limited room to negotiate the wording,” the guide states. “Your real protection, therefore, is good engineering, careful compliance, and insurance that matches the risks you are taking on, not red-lining the contract.”

The DisCos, for their part, are not without obligations: they must process applications to a timetable, hold customer credits in ring-fenced accounts, and maintain a public register. Whether they do so enthusiastically is another matter. As Bloomfield notes, “every unit a prosumer makes for itself is a unit the DisCo does not sell,” and resistance to the scheme may extend beyond distribution companies to generation companies upstream.

The regulations are silent on carbon credits, and that silence is expensive

The final regulations contain no provision on who owns the carbon credits generated by a prosumer’s solar system.

Earlier drafts and press reports had suggested these would vest automatically in the prosumer, but the gazetted text says nothing on the point.

For businesses with sustainability commitments or those selling into carbon-priced markets, this omission has real commercial stakes.

“Treat ownership of carbon and other environmental attributes as a contract question to nail down in writing,” the guide advises, “especially where a developer owns the system, rather than something the scheme grants you automatically.”

The silence also extends to other environmental attributes. Anyone assuming the regulations settle this question should read the footnotes before signing anything.

In Lagos, and a growing number of states, these rules may not apply at all

The Net Billing Regulations 2026 are national rules from NERC. But under the Electricity Act 2023 and the constitutional changes behind it, NERC now regulates only the national and inter-state layer.

States that have passed their own electricity legislation and completed the regulatory handover operate under their own frameworks.

Oversight has passed to roughly fifteen states; Lagos completed its transfer in 2025, with its own regulator, LASERC, now building a distinct electricity market with its own system operator and metering rules.

“A site connected to a network that has passed to a state like Lagos,” the guide explains, “may fall under different rules, a different capacity band, a different price, a different cap.” Every number that matters in this framework, the export tariff factors, the 30 percent feeder cap, the battery requirement for peak rates, and the credit duration, could be different under a state scheme, or may not yet exist at all.

“Confirm, per site and not once but as plans firm up, which regulator is in charge; and write your contracts so that the governing tariff, the credit treatment and what happens on a change of regulator are dealt with expressly,” the Bloomfield guide said.

The bottom line

The Net Billing Regulations 2026 are, in the assessment of Bloomfield LP, “good and useful rules” that give larger electricity users “a clear, official way to make better use of their own solar power.” But the value, the guide warns, “goes to those who read them clearly.” Size for self-consumption. Queue early. Sort out the lease. Budget for connection. Settle carbon credit ownership in writing. And check the rulebook, state by state. “Treat net billing as a tool to cut your own power costs,” the Bloomfield guide concludes, “and not as a scheme to earn money selling to the grid. Used that way, it is a welcome addition. Misunderstood, it will disappoint.”