NERC Net Billing Regulations 2026 Explained for 50kWp–1.5MWp Systems

Net billing in Nigeria is a regulated arrangement, introduced by NERC on 3 June 2026, that lets a customer with an on-site renewable system of 50kWp to 1.5MWp export surplus electricity to its DisCo and receive credits against its electricity bill. It turns a factory roof, a campus car park or a mall's solar array from a pure self-consumption asset into one that can recover value from power it cannot use itself. The regulations come with conditions that decide whether the numbers work: an export cap tied to your own load, a cap on how much any network asset can absorb, a staged approval process with fixed timelines, a meter that must record both directions, and an export tariff priced below retail. This guide explains each one, then shows how to test whether net billing makes financial sense for your site.

This is an engineering and commercial overview, not legal advice.

What's in this guide

What is net billing, and how is it different from net metering?
Who is eligible under the 2026 regulations?
How much can you export?
What is the application process and how long does it take?
What meter do you need?
How is exported power valued?
Does net billing make financial sense for your facility?

The numbers at a glance

Item	Rule	Source
Commencement	3 June 2026	NERC notice
Eligible system size	50kWp minimum, 1.5MWp maximum per user	NERC; Templars
Individual export cap	Approved export capacity ≤120% of Eligible Load Demand (extendable for verified load growth within 24 months)	Templars
Network cap	Aggregate prosumer exports ≤30% of the asset's average load; first-come, first-served	Templars
DisCo feasibility report	Within 15 days of a complete application	Templars; Vanguard
Net Billing Agreement	Within 5 business days of the feasibility report	Templars
NERC registration	Within 10 days of a complete application	Templars
Connection charge payment	15 days (no upgrade) or 30 days (reinforcement)	Templars
DisCo interconnection works	30–120 days after connection charge	Templars
DisCo commissioning	3 business days after NEMSA certificate	Templars
Export Tariff Factor	0.55 off-peak, 0.75 peak	New National Star
Settlement	Bill credits; no cash except where expressly provided	Templars

What is net billing, and how is it different from net metering?

Net billing is a bill-credit arrangement in which the electricity you import is charged at your normal retail tariff and the electricity you export is credited at a separate, lower export tariff. Under pure net metering, by contrast, each exported kilowatt-hour would cancel an imported kilowatt-hour one-for-one at the retail price. Nigeria chose net billing.

What does the "prosumer" status mean in practice?

The regulations call a participating customer a "prosumer": a user within a DisCo's supply area with a commissioned Net Billing Arrangement. According to the Templars analysis, the prosumer remains a DisCo customer at all times, keeps importing electricity, and is billed at the NERC-approved retail tariff for every kilowatt-hour consumed. What changes is that surplus renewable energy can be exported and credited.

Is it a revenue stream?

No. The arrangement operates as a bill credit, and no cash is paid to the prosumer except where the regulations or a NERC order expressly provide for it. Plan net billing as a way to lower your net bill, not as a power-selling business. If selling is the goal, look at the mini-grid or embedded generation routes in our guide Captive, Embedded or Mini-Grid?

Why did NERC introduce it now?

Because businesses are already investing heavily in self-generation and wasting the surplus. Before these rules there was generally no standardised, NERC-regulated way to monetise the excess from a factory solar array that out-produced its daytime load (Templars). With diesel above ₦2,000 per litre in parts of the South West (The Frontier), the pressure to get more value from renewable capacity is obvious.

Who is eligible under the 2026 regulations?

You are eligible if you are connected to a DisCo's network and install a renewable energy system of at least 50kWp and no more than 1.5MWp that complies with technical standards, then obtain DisCo approval, sign a Net Billing Agreement and register with NERC (NERC commencement notice).

Why the 50kWp floor matters

A 50kWp array needs very roughly 250–350 square metres of well-oriented roof or ground (our planning assumption, depending on panel wattage and layout). That puts most households and many small shops below the threshold. The Templars note lists the likely users: manufacturing facilities, industrial estates, universities, hospitals, malls, agro-processing facilities, telecoms infrastructure and sizeable office portfolios.

What changed from the draft?

NERC's 2025 draft regulations proposed a ceiling of 5MWp. The final 2026 regulations cut it to 1.5MWp. Projects designed against the draft need resizing or a different route.

What about existing solar systems?

Existing systems can apply. The draft framework asked existing installations for evidence of commissioning date, prior approvals, generation history where available, and a certified inspection report confirming safety and compliance. The final regulations, as reported by Vanguard, keep that approach, adding projected annual generation and details of any energy storage.

How much can you export?

You can export up to 120 percent of your Eligible Load Demand, and your exports share a network limit with other prosumers on the same asset.

The 120% individual cap

The approved export capacity under a Net Billing Arrangement must not exceed 120 percent of the customer's Eligible Load Demand. Where you can show verifiable and imminent load expansion, the DisCo may approve more, provided it does not exceed your projected demand within 24 months (Templars). In practice this stops customers building a 1.5MWp array on a site with 200kW of load simply to sell power.

The 30% network cap

DisCos process applications first-come, first-served, but aggregate prosumer exports on any network asset are capped at 30 percent of that asset's average load. On a lightly loaded feeder or transformer, that cap may already be filled by early applicants. Apply early if you are on a feeder shared with other large commercial users.

How to size for net billing

Size the array against your own daytime load first, then decide how much surplus you want to export within the 120 percent cap. A system sized so that most generation is consumed on site earns the full value of avoided retail purchases or avoided diesel. Exported kilowatt-hours earn only the export tariff. That difference is why self-consumption comes first and export is the bonus.

What is the application process and how long does it take?

The process runs from DisCo application to NERC registration to NEMSA inspection and DisCo commissioning, with fixed timelines at each regulated step.

The steps in order

Application to the DisCo. DisCos must publish their procedure, eligibility criteria and tariff structure. Applications include proof of ownership or occupation, a certified single-line diagram showing switching and protection, and system specifications (Vanguard).
Technical feasibility study. The DisCo issues a Distribution System Technical Feasibility Report within 15 days of a complete application, covering load history, network loading and whether upgrades are needed.
Net Billing Agreement. If approved, the agreement is executed within 5 business days of the feasibility report. It records approved export capacity, interconnection voltage and the export tariff.
NERC registration. NERC approves and issues a registration certificate within 10 days of a complete application.
Connection charge. Paid within 15 days where no network upgrade is needed, or 30 days where reinforcement is required.
Interconnection works. The DisCo completes them 30–120 days after receiving the connection charge, depending on 11kV or 33kV reinforcement.
NEMSA inspection and pre-commissioning tests. An inspection certificate or a deficiency notice follows.
DisCo commissioning. Within 3 business days of the NEMSA certificate. No export is allowed before this point.

How long end to end?

On the regulated timelines, a straightforward application with no reinforcement could move from submission to commissioning in roughly two to four months. A project needing 33kV reinforcement could take six months or more. The regulated clock only starts on a complete application, so incomplete technical documents are the most common cause of delay.

What does the DisCo do if it rejects you?

It must issue written reasons and identify the modifications required to qualify (Templars). Treat a rejection notice as an engineering brief: most modifications concern protection, anti-islanding, export limitation or earthing.

What meter do you need?

You need a revenue-grade import/export meter or a dual-register smart meter that complies with the Metering Code and has time-of-use (TOU) functionality. The DisCo provides it once you pay the connection charge (Vanguard).

Why time-of-use matters

Exports are valued differently at peak and off-peak times. Without a TOU meter, the DisCo cannot tell when you exported. Where a TOU meter is not available at commissioning, the DisCo may, with NERC's approval, commission provisionally with a standard NEMSA-certified bidirectional meter. In that case all exports are credited at the off-peak rate and the DisCo must upgrade to TOU within 12 months (Templars). For a project with battery storage designed to export at peak, that delay can erase a year of premium value.

Should you install your own check metering?

Yes. The revenue meter belongs to the billing relationship; a check meter belongs to you. Install your own metering at the inverter output, the point of common coupling and the main load boards. When the monthly bill arrives showing imports, exports, tariffs and carried-forward credits (DisCos must now itemise all of these), you can reconcile it against your own data. Our guide Smart Metering for Estates and Universities covers metering architecture in more depth.

How is exported power valued?

Exported energy is credited at an Export Tariff calculated from an "Avoided Cost Delivered" figure multiplied by an Export Tariff Factor of 0.55 for off-peak exports and 0.75 for peak exports, subject to NERC review (New National Star). Where the calculated off-peak export tariff equals or exceeds the applicable retail tariff, compensation is capped.

What does that mean in plain terms?

Every exported kilowatt-hour is worth less to you than a kilowatt-hour you avoid buying. Off-peak exports are credited at 55 percent of the avoided-cost benchmark; peak exports at 75 percent. The precise naira value depends on NERC's avoided-cost figures, which were still being finalised at the time of writing.

How are credits handled?

Monthly bills must show imported and exported kWh, import and export tariffs, charges and credits in naira, carried-forward credit balances and the net amount payable (Vanguard). Credits that exceed a month's charges roll forward.

What is still uncertain?

Two things. First, connection charges: the regulations set four bands (50–100kWp, 100–500kWp, 500kWp–1MWp and 1–1.5MWp) but left the amounts to a later NERC determination. Second, the final export tariff values and settlement reliability (EBC Financial Group). Both belong in your sensitivity analysis until they are published.

Bidirectional electricity meter being tested in a metering cabinet

Does net billing make financial sense for your facility?

It makes sense when your renewable system is sized mainly for self-consumption and net billing turns the unavoidable surplus (weekends, holidays, shutdowns, low-load afternoons) into bill credits instead of curtailed energy.

A simple way to test it

Work through these inputs. Label each one as your own figure or an assumption.

Daytime load profile from your meter or a logger (your figure).
Expected solar yield for your array and location (design estimate).
Self-consumed energy: the overlap of load and generation (calculated).
Surplus energy: generation minus self-consumption (calculated).
Value of self-consumed energy: what it displaces. For a Band A customer, the grid tariff is ₦209.5/kWh (Opaindex). If it displaces diesel, the fuel cost alone at ₦2,100/litre and an assumed 0.3 litres per kWh is about ₦630/kWh.
Value of exported energy: surplus × export tariff (pending NERC figures; test at several values).
Costs: connection charge (pending), net billing compliance, any protection upgrades.

What usually decides the answer

Self-consumption does. A factory that runs Monday to Saturday with steady daytime process load will consume nearly all of a well-sized array, and net billing mainly captures Sunday and holiday surplus. A school with long vacations has large seasonal surplus, so net billing matters more. A site that displaces diesel with solar earns far more per kilowatt-hour than one that displaces Band A grid power, and far more again than export credit.

Where engineering changes the result

Export limitation controls keep you within your approved capacity without tripping.
Protection and anti-islanding settings that satisfy the DisCo first time avoid a rejection cycle.
Battery storage can shift exports into peak windows (0.75 factor) once TOU metering is installed.
Earthing and SLD certification by a qualified engineer are mandatory parts of the application.

Gotchas

The regulated clock starts only on a complete application

Missing SLD details, uncertified earthing or incomplete specifications restart the queue.

Your feeder's 30% cap can fill before you apply

Aggregate prosumer exports on each asset are capped. Early applicants take the headroom.

No TOU meter means off-peak credit only

Provisional bidirectional meters credit every export at the off-peak rate for up to 12 months.

Designing to the 5MWp draft

The final ceiling is 1.5MWp. Larger schemes need the mini-grid or embedded routes.

Treating credits as cash

Net billing reduces your bill. It does not pay you, except where the regulations or NERC expressly say so.

Key takeaways

Net billing lets renewable systems of 50kWp–1.5MWp export surplus power to a DisCo for bill credits, starting 3 June 2026.
Exports are capped at 120 percent of your eligible load and at 30 percent of each network asset's average load, allocated first-come, first-served.
Exported energy is valued at 0.55 (off-peak) or 0.75 (peak) of an avoided-cost benchmark, so self-consumed solar is worth more than exported solar.
Regulated timelines run from a 15-day feasibility report to 3-day commissioning, but only after a complete application.
Connection charges and final export tariff values are still pending, so model them as sensitivities.

Frequently asked questions

Can a home with 10kW of solar join net billing? No. The minimum installed capacity is 50kWp.

Will the DisCo pay me cash for exported power? Generally no. The arrangement is a bill credit, with cash only where the regulations or a NERC order expressly provide.

Do I need NERC registration as well as DisCo approval? Yes. After signing the Net Billing Agreement you apply to NERC, which issues a registration certificate within 10 days of a complete application.

Who pays for the net meter? You pay a NERC-determined connection charge; the DisCo then provides or procures the net metering infrastructure.

Can batteries participate? Storage details must be declared, and batteries can shift exports into peak periods where TOU metering is installed.

Does net billing apply in states with their own regulators? The regulations are NERC's. Where a state has taken over intrastate regulation, check whether the state regulator has adopted, adapted or replaced the framework.

Considering net billing? Lobcom prepares the load analysis, export estimate, certified SLD and earthing design, and the full DisCo application pack. Request a net billing feasibility check.