September 18, 2025
The Nigerian Electricity Regulatory Commission, NERC’s proposed regulation that would allow solar power users to sell excess electricity back to the national grid has generated diverse reactions from energy experts.
While many hailed the initiative as a landmark step toward adoption of renewable energy and energy security others are apprehensive that Nigeria’s power sector may not yet be prepared to accommodate such a complex framework.
Bearing his mind on the proposal, a former Chairman of the NERC, Dr. Sam Amadi, cautioned against the premature adoption of net billing in Nigeria’s power sector, that is yet to address fundamental weaknesses in regulation, infrastructure and service delivery.
Amadi, described net billing arrangement as an important tool for the renewable energy market but warned that Nigeria’s electricity sector lacks the readiness to implement such a complex framework.
“Net billing is one of the important methodologies for renewable energy market. This is important because it provides a technical resource for effective mainstreaming of renewable energy, considering that the new electricity law places much premium on consistent increase of renewable energy in the national grid
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“I am not sure anyone is prepared for the complexity of the pro-consumer in the electricity grid. This will require regulatory changes, which are still far-fetched. Again, supply conditions are still poor. People have not attained any degree of self-sufficiency, so how will they sell to others?” he stated.
Amadi stated that Nigeria must first get the basics of a functional electricity market right before aspiring to adopt a “bogus ideas borrowed from more developed and organized markets.”
He enumerated some perennial problems in the sector: inaccurate billing systems, inadequate metering of consumers, weak customer service frameworks, poor regulatory enforcement, and the absence of a solid data infrastructure for electricity distribution companies.
“We need to focus on being efficient and effective with the basic elements of a functional electricity market before aspiring to bogus ideas that we borrow from more developed and organized markets. First, we need the basic efficiency of accurate billing and having meters for every , whether postpaid or prepaid. Even the customer service systems are weak, the regulatory enforcement in the market is weak, and distribution companies have not established basic data about their customers. We are yet to set up a basic framework for demand-side management. These are the fundamentals before we start talking about the more complex issues,” he noted.
Amadi also raised concerns about the risks of over-reliance on renewable energy in Nigeria’s fragile grid, warning that excess solar power could drive up costs if not properly managed.
“Excess solar on the grid may lead to expensive power. We need to optimize conventional power and use solar as backup for now. Experience in Europe shows the commercial and technical challenges of too much reliance on renewable energy. We have to make haste slowly,” he noted.
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He further urged NERC to concern itself its core mandate of protecting consumers and enforcing service standards rather than being distracted by ambitious but impractical innovations.
“NERC still has a lot to learn to become a customer-friendly regulator. My advice is it should busy itself with being a credible, trustworthy, and firm regulator of existing standards and service conditions and not distract itself with these highfaluting and low-value innovations,” Amadi noted.
Meanwhile not all experts share Amadi’s line of thoughts. Some view the initiative as a turning point for Nigeria’s energy transition.
A renewable energy consultant, Dr. Funke Olayemi, described the initiative as “a game-changer” for Nigeria’s energy transition. “For years, solar adopters have only been able to generate power for self-consumption, but this framework provides an incentive for households and businesses to invest even more in solar. It means renewable energy becomes not just a backup, but a tradable resource,” she said.
In the same vein, an energy policy analyst, Engr. Charles Ugwu opined that the regulation could help stabilize the grid in the long run. “If properly implemented, excess solar power fed into the grid during peak sunlight hours can reduce pressure on traditional generation plants and diversify supply sources. This is especially critical at a time when the national grid suffers frequent collapses.”
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Nigeria’s solar energy capacity has grown rapidly in recent years. In 2023 alone, solar panel imports were valued at over $200 million—equivalent to more than four million panels—much of which went into captive power generation.
By the first quarter of 2025, according to NERC, the value of imported panels had reached approximately N125.29 billion.
This surge has been driven by a mix of government initiatives and private sector investments, particularly in rural and off-grid areas where decentralized energy solutions are critical. In 2024, the country added 63.5 MW of solar power, pushing total installed capacity to 385.7 MW.
Under the proposed NERC framework, “prosumers”—consumers who also generate electricity can connect to the national grid.
According to NERC, energy consumed from a Distribution Licensee will be billed at the applicable end-user tariff, while excess energy exported back to the grid will be credited through a net metering tool.
