The Nigerian Electricity Regulatory Commission (NERC) has unveiled plans to introduce a net metering and net billing system that will allow households and businesses with solar panels to feed excess electricity back into the national grid for commercial value.
This initiative marks a major step in Nigeria’s efforts to embrace renewable energy and diversify its electricity mix, amid growing demand for stable power supply and rising investments in solar technology.
According to NERC, Nigeria has seen exponential growth in solar adoption in the past three years.
The commission revealed that the value of imported solar panels in Q1 2025 alone reached ₦125.3 billion ($200 million), a figure that highlights the rapid pace of renewable energy deployment across the country.
Official data also showed that in 2023, Nigeria imported more than four million solar panels, most of which were deployed for captive power generation—an off-grid system where businesses and households independently generate their own electricity.
By the end of 2024, Nigeria added 63.5 megawatts (MW) of solar power capacity, pushing the total installed solar capacity to 385.7 MW.
While this represents only a fraction of Nigeria’s energy demand, it signals growing confidence in renewable energy investments and a shift away from dependence on fossil fuels.
NERC stated that the increasing volume of solar installations has led to calls from industry stakeholders to create a framework for selling excess energy to the grid.
In response, the commission has developed draft regulations on net billing, which it published for public consultation.
The draft document is in line with Sections 46 and 48 of the Electricity Act 2023, which govern the commission’s proceedings, stakeholder consultations, and public hearings.
NERC invited Nigerians and industry players to provide feedback on the draft regulations before September 26, 2025, through its official website.
According to the commission, the proposed framework will not only encourage energy efficiency but also incentivize investment in renewables, giving solar users the opportunity to earn from excess power while contributing to national grid stability.
Energy experts believe the move could transform Nigeria’s electricity sector.
Under net metering, consumers who install solar panels would not only reduce their reliance on the national grid but also sell excess power to distribution companies (DisCos), thereby creating an additional revenue stream.
Analysts also say the system could:
Boost investor confidence by demonstrating Nigeria’s seriousness about renewable energy integration.
Reduce pressure on the national grid, especially during peak hours, by feeding in surplus renewable energy.
Encourage households and SMEs to embrace solar adoption as a viable alternative to costly diesel and petrol generators.
Support Nigeria’s climate commitments, including its pledge to achieve net-zero emissions by 2060.
Despite the optimism, experts caution that Nigeria must address critical challenges to fully benefit from net metering. These include:
Grid instability: Nigeria’s electricity grid is prone to frequent collapses, which could affect how efficiently excess solar power is absorbed.
Regulatory clarity: DisCos and consumers need clear, transparent pricing structures to avoid disputes over tariffs and payments.
Infrastructure gaps: Significant investment in transmission and distribution is required to handle the injection of decentralized solar power.
Financing hurdles: Many households and small businesses may still find the upfront cost of solar panels prohibitive without accessible loan or subsidy programs.
Globally, countries like India, South Africa, and Kenya have already adopted net metering frameworks, with varying levels of success.
In Kenya, for instance, the Energy and Petroleum Regulatory Authority (EPRA) allows solar producers with systems above 1MW to feed into the national grid under structured agreements.
Nigeria is hoping to learn from these models while tailoring its regulations to local realities, particularly the country’s unique mix of grid challenges, fuel reliance, and population density.
Industry stakeholders have welcomed NERC’s move but urged the government to pair the framework with supportive incentives such as tax breaks on solar equipment, import duty waivers, and access to low-interest financing.
Commenting on the development, energy analyst Olumide Adewale said, “Net metering will be a game-changer if implemented correctly.
It can reduce generator dependency, save businesses billions in fuel costs, and position Nigeria as a renewable energy leader in West Africa.
But this will only work if pricing is fair and infrastructure bottlenecks are addressed.”
For its part, NERC reassured stakeholders that the draft regulations will undergo extensive consultations to ensure a fair balance between consumers, DisCos, and the government.
As Nigeria struggles with frequent blackouts, rising fuel costs, and investor concerns over its power sector, the adoption of a net metering arrangement could mark a turning point.
If executed effectively, it would not only accelerate renewable energy growth but also empower millions of Nigerians to actively participate in electricity generation and distribution.
With solar panel imports already valued at hundreds of billions of naira, and public consultations underway, all eyes are now on NERC and the government to deliver on this long-awaited reform.