Nigeria’s Net Billing Regulations 2026 are now in force. The regulations matter less for the export they allow than for the way they decide where a project’s value finally settles, and that is driven far more by how the system is sized and how its contract is written than by export itself.
Nigeria’s Net Billing Regulations 2026 are now in force, establishing the country’s first national framework for connecting distributed solar to the grid and crediting the surplus that a system exports. Much of the commentary so far treats the framework as little more than a way to sell spare power back to the grid. We see it as something more significant than that. The regulations matter less for the export they allow than for the way they decide where a project’s value finally settles, and that is driven far more by how the system is sized and how its contract is written than by export itself. For anyone developing, financing, or contracting distributed solar in this market, these are the questions to resolve before committing to a project.
Self-consumption remains the primary source of value
The most important point is that the framework does not change the underlying economics of most distributed solar projects. The highest-value kilowatt-hour remains the one consumed behind the meter and used to offset grid or diesel generation. Net billing introduces a mechanism for valuing surplus, but that value is secondary to the value of self-consumption.
This distinction matters because it changes the way a project should be sized. A system that is optimised around maximum generation may appear attractive in a simple energy model, but under a net billing regime it can create a larger volume of lower-value exported power. A system optimised around the site’s consumption profile may produce less total generation but retain more of its output in the highest-value part of the stack. The question is therefore not only how much solar can fit on the roof or land, but how much of that generation can be absorbed by the load at the times it is produced.
For commercial and industrial users, this makes the load profile central. Sites with daytime demand that tracks solar production will capture more value from the same installed capacity than sites whose demand is concentrated outside solar hours. Two projects with the same tariff, capex, and irradiation can therefore produce materially different outcomes once the regulation is applied to their actual consumption patterns.
Export credit changes allocation, not just revenue
Net billing is often described as an additional revenue stream, but in practice it is also an allocation mechanism. Once exported power is credited at a defined rate, the model must decide who receives that value and how it affects the contract between the parties.
In a self-consumption PPA, for example, the customer may buy only the energy consumed on site, while exported energy may accrue to the developer, the customer, or be shared according to the contract. In a lease or fixed-fee structure, export value may improve the project economics indirectly, but it may not be visible as a separate payment line. In a hybrid contract, the allocation may change over time or depend on thresholds.
This means that the same physical system can produce different financial outcomes depending on the contract structure. Treating export as a generic revenue line risks overstating the developer’s return or understating the customer’s benefit. The regulatory credit has to be mapped into the commercial agreement, not simply added to the project revenue stack.
Oversizing now requires stronger justification
Before net billing, oversizing a behind-the-meter system was often constrained by the risk of wasted energy or curtailment. Under the new framework, export can reduce that waste, but it does not automatically make oversizing optimal. The exported kilowatt-hour is still normally worth less than the self-consumed kilowatt-hour, and the system still carries the full capital cost of the additional capacity.
The practical implication is that oversizing must be justified by the marginal value of the extra generation. If the additional capacity mostly produces exported energy at a lower credit, the project may show weaker returns even though total generation is higher. If the additional capacity supports future load growth, improves resilience, or works in combination with storage, it may be justified. But that conclusion has to come from modelling the load, the regulation, and the contract together.