NERC Launches Draft Net‑Billing Regulations 2025: What Nigerians Need to Know
On September 4, 2025, the Nigerian Electricity Regulatory Commission (NERC) published a draft of its Net‑Billing Regulations, launching a public comment period—a landmark moment for solar prosumers and the energy sector at large. With Nigeria experiencing rapid growth in distributed generation, particularly rooftop solar.
The Draft Net Billing Regulations 2025 is more than just a bureaucratic document; it's a blueprint for a potentially smarter, more democratic energy future. It builds on the outdated NERC (Embedded Generation) Regulations, 2012, and finally creates a clear, modern framework for consumers who generate their own electricity—like those with solar panels—to interact with the national grid.
From the details contained in the regulation, it is now clear that NERC is moving to formally establish net‑billing rules. This is a key development for:
Prosumers (those generating and exporting their own power, e.g., via rooftop solar),
Renewable energy investors seeking clarity and predictability, and
DisCos and regulatory bodies preparing for new billing frameworks.
Let's dive into what this draft means for you, your wallet, and Nigeria's power sector.
What is Net Billing? And How is it Different from Net Metering?
This is the most crucial distinction. While the terms sound similar, the financial mechanisms are different.
Net Metering (The Old System): Your electricity meter spins backwards. For every unit (kWh) of excess solar energy you send to the grid, you get a credit of equal value on your bill. It's a 1-for-1 swap. You essentially use the grid as a giant battery.
Net Billing (The Proposed System): You have a revenue-grade import/export meter or dual register smart meter, that tracks two things:
Energy Imported: The electricity you take from the grid.
Energy Exported: The excess electricity you send to the grid.
You are billed for the imported energy at the retail rate (the normal price you pay), and you are credited for the exported energy at a different, pre-approved rate determined as explained in the proposal.
Why the change? Net billing is often seen as fairer for the Distribution Companies (DISCOs). The compensation to the prosumer is typically lower than the retail rate, reflecting the fact that DISCOs have costs for maintaining the grid infrastructure that you use when exporting your power.
Key Highlights of the Draft Net Billing Regulations 2025
Eligibility and Capacity: The regulations apply to "Eligible Customers" with renewable energy systems (like solar PV) between 50kWp and 5MWp. This precludes a lot of smaller prosumers. It would be beneficial to drop the lower eligibility limit (say 5kWp) to carry more prosumers along.
The Introduction of an injected energy tariff credit system: This is the heart of the new system. This injection tariff will be approved by NERC and will be specific to each DISCO. Crucially, the draft states that this will be reviewed periodically to reflect economic realities, ensuring it remains sustainable. It follows that this needs to be set in a competitive manner to ensure the necessary incentive to prosumers.
Streamlined Application Process: The draft outlines a clear process for applying to your DISCO for a net billing agreement. DISCOs are mandated to provide the necessary application forms and technical requirements, aiming to reduce the bureaucratic hurdles that have previously stifled adoption. However, the procedure can be further streamlined to reduce red tape to allow for a smoother rollout.
Two-Way Energy Exchange: You can now officially become a "Prosumer" – both a consumer and producer of energy. During the sunny day, your solar panels power your home and export the surplus. At night or on cloudy days, you draw from the grid. You only pay for the net difference.
Use of Smart Meters: The system relies on a revenue-grade import/export meter or dual register smart meter, to accurately measure the bidirectional flow of electricity. The technical specs and certification requirements for the meter and interconnection is referenced in the draft document.
Potential Benefits: A Win-Win-Win Situation?
For Consumers (You!):
Faster Return on Investment (ROI): Selling excess power can significantly shorten the payback period on your solar investment.
Energy Independence: Reduce your reliance on the grid and generators, leading to massive savings on diesel and petrol costs.
Contribution to a Greener Grid: You're directly helping to add clean, renewable energy to Nigeria's generation mix.
For DISCOs:
Reduced Grid Strain: Distributed solar generation can lower demand on the grid during peak daytime hours, reducing outages and the need for expensive infrastructure upgrades.
New Revenue Streams: DISCOs can potentially manage the integration process and may have roles in maintaining the systems, creating new business opportunities.
For Nigeria:
Increased Generation Capacity: Thousands of small solar systems add up to a significant amount of new, decentralized power generation.
Economic Growth: It stimulates the local solar industry, creating jobs in installation, manufacturing, and maintenance.
Meeting Climate Goals: It aligns with national and international commitments to reduce carbon emissions.
Challenges and Considerations
The draft is promising, but its success hinges on execution:
The Injected Energy Tariff Rate: The single most important factor. If the Injected Energy Tariff rate is set too low, it will provide little incentive for consumers to invest in larger systems. It must be attractive enough to encourage participation.
DISCO Readiness: Are DISCOs equipped with the right meters, billing software, and technical expertise to implement this seamlessly? Past performance raises questions.
Uniformity Across DISCOs: Will the experience for a customer in Lagos be the same as for one in Jos? NERC must ensure consistent application of the rules.
Public Awareness: Many potential "prosumers" are unaware of this opportunity. A massive public education campaign will be vital.
A more Stable Grid: The grid needs to become more reliable. There would be little incentive to prosumers under this arrangement if the grid is unavailable when they need to claim the energy credit.
What Should You Do Next?
Read the Draft: The document is public. [https://nerc.gov.ng/wp-content/uploads/2025/09/Draft-Net-Billing-Regulations.pdf.].
Stay Informed: Follow NERC and energy news outlets for updates on the public hearing and finalization of the regulations.
Engage: If you're part of an industry group or community, consider submitting a collective response to the draft during the public consultation period. Your voice matters.
Plan Your Solar Project: If you’ve been considering solar, this makes the prospect even more attractive. You can reach out to us at Urbitz for a quote [ http://www.urbitztechnologies.com ]
The Bottom Line
The NERC Draft Net Billing Regulations 2025 is a monumental step towards modernizing Nigeria's electricity market. It empowers consumers, incentivizes renewable energy investment, and has the potential to unlock significant value for a struggling power sector.
While challenges remain, the direction is clear: the future of energy in Nigeria is not just about centralized power plants; it's decentralized, it's democratic, and it's powered by the sun.
What do you think? Are you ready to become a prosumer? Share your thoughts in the comments below!
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Disclaimer: This blog post is for informational purposes only and is based on a draft regulation. It does not constitute legal or financial advice. The final approved regulations may differ. Always consult with a qualified professional before making investment decisions.