Infrastructure Gap Casts Gloom over New Solar-to-Grid Policy 

The Nigerian Electricity Regulatory Commission recently opened the national grid to enable solar users (homes, offices and factories) called ‘Prosumers’, send their surplus electricity to the grid and be paid for it. But hardware infrastructure gap poses a major drawback to this laudable policy as about 90 per cent of inverters in Nigeria can’t feed into the grid. Peter Uzoho writes.

On June 3, 2026, the Nigerian Electricity Regulatory Commission (NERC) flipped a switch on policy. For the first time in Nigeria’s power history, households, offices and factories can legally sell excess solar electricity back to the national grid. 

The Net Billing Regulations 2026 created a new class of electricity user: the prosumer. This means that anyone with a solar system between 50 kilowatt-peak and 1.5 megawatt-peak can now export surplus power to distribution companies (Discos) and get paid through an ‘Avoided Cost Delivered’ credit. Under this new policy, Off-peak exports earn 0.55x, peak exports between 6-9pm with batteries earn 0.75x.

Solar experts have welcome this new policy as the Chief Executive Officer of Kartel Energy Limited, Mr. Ola Ogunsemowo described it as a fantastic move.

“It’s a very good move. It’s a fantastic move. It’s good for the industry, it’s good for the country”, Ogunsemowo said during an exclusive chat with THISDAY, but flagged infrastructure as a major challenge. 

“However, at this time now, we do not really have the infrastructure to make this possible. I mean, we are still talking about metering those who are using grid directly. We have not gotten that right,” he said.

That gap between ambition and reality is Nigeria’s solar story in 2026. While NERC opens the grid to prosumers, 90 per cent of inverters in Nigerian homes can’t feed back. Moreover, while the policy talks about net billing, the national grid collapsed three times in January 2026 alone, raising doubt about the strength of the grid to withstand additional power from solar.

Again, while Nigeria dreams of exporting power from homes and businesses, the stark reality remains that over 200 million Nigerians still live with 4,000MW of actual electricity.

Experts argue that the prosumer policy didn’t create Nigeria’s solar boom. The blackouts did. But the policy will decide whether that boom becomes a distributed energy future, or just more rooftops in the dark.

Nigeria Finally Pays for Sunshine

NERC’s Net Billing Regulations 2026 is Nigeria’s first structured legal pathway for distributed solar to enter the grid. The objectives are clear: promote renewable adoption, improve energy security, attract private capital, reduce emissions, and integrate solar without destabilizing the fragile grid.

To qualify, the agency said applicants must be connected to a Disco, install 50kWp-1.5MWp of solar, pass a technical feasibility study within 15 days, sign a Net Billing Agreement, and register with NERC. Approved sites get bidirectional meters to track power in and out.

Under this policy, the tariff design rewards timing. “Export Tariff Factor” links credits to avoided costs. Send power when the grid is stressed at night, get paid more. 

NERC calls it a move to “broaden access to clean energy, ease pressure on the national grid, attract private investment into distributed power generation, and help Nigeria reduce its greenhouse gas emissions”.

But the Commission also capped eligibility at 1.5MW, admittng that it’s more modest than prosumer thresholds in some other markets. The goal: stress-test with a defined cohort before expanding. Although this is arriving Nigeria for the first time, the technology to make it work is not new as many Western nations had adopted it and it has been working for them. For instance, Germany has used net metering for 20 years.

Lack of Hardware

While the Prosumer policy is viewed as a welcome development, Ogunsemowo warned that the first challenge will be the lack of hardware to facilitate it.

“90 per cent of all the inverters in Nigeria today, that people are using in their homes, in their offices, don’t have the capacity to feed into the power grid. We don’t bring in ongrid inverters. It’s more expensive. And if they cannot use it to feed into the grid, why do they want to sell it to Nigeria?”, he said.

Most Nigerian solar is off-grid hybrid. It charges batteries, powers homes, and shuts down when the grid fails. It was built for blackouts, not for selling power. On-grid inverters cost more and require stable grid synchronization – exactly what Nigeria lacks.

“The second bottleneck is metering. NERC wants to meter exports, but millions of Nigerians are still on estimated billing. Imagine you want to meter those who are using solar and sending them back into the grid,” Ogunsemowo said.

The winners, he argues, won’t be homes. They’ll be industrial customers and mini-grid developers with 1MW+ solar farms.

 “If they have an opportunity to feed back into the grid, it will work for them because now their turnaround time in recovering their money can be shorter. Because if you feed it into the grid, you get paid. For now, home users are locked out as it’s not for home users yet”, the Kartel Energy boss stated. 

He said the timing is early but that the only challenge is the capital requirement. 

Grid Collapse, Costly Fuel

The prosumer policy was announced into a storm of blackouts. At 11:03am on Tuesday, January 27, 2026, Nigeria’s national grid died again. Generation crashed from 3,825MW to 39MW in minutes. Load allocation to all 11 Discos fell to zero. It was the third collapse in less than a month.

Since President Bola Tinubu took office in May 2023, the grid has collapsed at least 20 times. 2024 was worst: 12 failures, almost monthly. 2025 improved to four, but 2026 started badly.

Nigeria has 13,000MW installed generally capacity and about 8,000MW installed transmission capacity but rarely delivers more than 4,000-5,000MW to over 200 million Nigerians. 

During his screening before the Senate, New Minister of Power, Joseph Tegbe had pledged to stabilise the grid in 100 days. 

“We need to stabilise the grid. We need to enforce strict code against indiscipline and ensure a tax system across. We need to also improve reserve in our grid,” he had said.

But Nigerians are tired and no longer waiting for the grid or the promises from their leaders as each collapse pushes more people to high cost diesel, petrol – and now to solar.

“As long as our power problem remains like grid collapse, unstable supply, high estimated billings, lack of meter and so many other challenges, the demand for solar continues to increase,” Ogunsemowo said.

Fuel cost is the second driver of high demand for solar.  Diesel and petrol are selling above N1,000 per litre. For Small and Medium Enterprises (SMEs) that make up 96.9 per cent of Nigerian businesses and 46.3 per cent of Gross Domestic Product (GDP), running generators is financially unsustainable. According to Ogunsemowo, the high cost of petrol and diesel is also one of the advantages for solar.

On a positive note, the result is that Nigeria installed 803MW of solar in 2025 alone, a 141 per cent year-on-year jump. Cumulative capacity jumped from 385MW in 2024 to nearly 1.19GW in 2025. Off-grid systems dominate – rooftop, mini-grids and solar home systems are 96 per cent of that capacity, according to data obtained from the regulator.

Nigeria now accounts for 17 per cent of Africa’s 4.498GW solar installed in 2025, making it the continent’s second-largest market after South Africa. 

The Global Solar Council credits “rapid expansion in distributed solar systems, high energy prices, policy concerns over potential import restrictions, and the rollout of the Distributed Access Recovery Scheme (DARES) programme

From Importer to Exporter

The solar market is shifting from imported panels to local assembly. Imports of solar cells and components for assembly hit 837MW in 2025 – more than the cumulative 375MW of all previous years combined.

According to the Managing Director of the Rural Electrification Agency (REA), Abba Aliyu, domestic manufacturing capacity rose from 120MW two years ago to 300MW today – a 150 per cent increase. 

“We have moved from about 120 megawatts of local manufacturing capacity to roughly 300 megawatts today, with 3.7 gigawatts in the pipeline,” Aliyu said. 

That pipeline positions Nigeria as a West African hub, with panels already exported from Lagos to Accra, Ghana.

Capital followed. Nigeria secured $425 million in 2025 for eight renewable manufacturing facilities. REA has deployed over 160MW of solar, electrifying 1,650 communities, powering 1,000 healthcare centres and reaching 6 million Nigerians. Through the Rural Electrification Fund, it attracted N5.8 billion private investment and created 26,000 jobs.

REA’s 2026 Mini-Grid Regulations raised allowable interconnected capacity to 10MW. The Green Finance Investment Facility, a $188 million fund led by Barton Heyman with REA, aims to finance 191MW of distributed solar.

Bridging the Capital Gap

Understand that policy needs money work, impact investors are filling the gap. For instance, AllOn, Shell’s impact arm, has committed $40 million+ since 2016, delivering clean energy to 1.2 million people across 190 communities with 23MW solar.

In 2025, AllOn invested N2 billion in Salpha Energy – the only female-led solar home system plant in Sub-Saharan Africa. Salpha’s 150Wp to 100kWp systems have impacted 2 million lives. AllOn also put $250,000 into ICE Solar, which provides Energy-as-a-Service to SMEs.

Likewise, the Renewable Energy Association of Nigeria (REAN) is targeting 2,000 SMEs with renewable solutions in two years, with the Small and Medium Enterprises Development Authority of Nigeria (SMEDAN). 

REAN President, Mr. Ayo Ademilua said a survey of 1,026 MSMEs showed 90 per cent of women-led businesses suffered from 2023 fuel subsidy removal. 

“Reliable and affordable energy is essential for SMEs that contribute 48 per cent to GDP,” he said.

Waste Question Amid Solar Boom

Every solar boom raises an e-waste question. In Nigeria, some environmentalists have started raising concerns about the looming environmental crisis over lack of a structure to recycle solar panels when they expire. 

Nigeria imported 4 million+ panels in 2023 worth $200 million, raising fears among environmentalists, warn that a waste wave is coming. But solar experts are not panicked as they don’t see any cause for concern yet because of the long lifespan of solar PV panels, which last between 16-25 years. Ogunsemowo said Nigeria has not yet accumulated the number of PV panels that should warrant panick, adding that when such time comes, players will think of the solution. 

“For every problem, when you find the solution, that is when the economic activity begins_,” he said. Panels last “a very long time”. Batteries are shifting to lithium, which are recyclable and already repurposed from electric vehicles. Lead-acid batteries have buyers for lead. Right now, I have not seen what they are recycling solar panels into. But when that time comes… I know, some people would also come with economic alternatives. Right now, there is no waste,” he explained.

Nigeria’s Renewable Energy Master Plan targets 30 per cent renewable in the national mix by 2030. 

Mordor Intelligence projects Nigeria’s renewable market at 3.59GW in 2025, growing to 14.07GW by 2031 at 25.58 per cent CAGR. Solar rooftop alone is $1.1 billion.

But recycling infrastructure is absent. Without it, Nigeria risks swapping fuel pollution for panel waste by 2035.

The message is clear: Nigeria’s centralized grid cannot serve 200 million people. Solar can. But success requires three things: meters for net billing, on-grid inverters for export, and a waste management plan.

The Prosumer policy means that those who are into solar business need to start bringing in on-grid inverters to facilitate feeding surplus electricity to the grid.  However,  the policy favours those who have large solar installations but can’t feed it into the grid and sell.

Until then, the prosumer policy remains a signal, not a solution. Nigerians will keep choosing sunshine over blackouts. The grid may keep collapsing. But as Ogunsemowo puts it, “the market is doing well.”