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How Solar Panels Work With Net Metering in Nigeria


Net metering with solar panels in Nigeria.

How Solar Panels Work With Net Metering in Nigeria

Imagine a world where you can generate your own electricity and even sell the excess back to the grid. This is the reality of net metering, a billing arrangement that is becoming increasingly popular around the world, including in Nigeria. Net metering allows homeowners and businesses with solar panels to send excess electricity back to the grid in exchange for credit. This credit can be used to offset the cost of electricity that homeowners pull from the grid at night or on cloudy days.

Net metering is a great way to save money on your electricity bills and increase your self-sufficiency. It is also a way to support the development of renewable energy in Nigeria. In this article, we’ll take a closer look at how net metering works in Nigeria, how to qualify for net metering, and why to use net metering. So, how does net metering work?

How Net Metering Works In Nigeria

A solar panel system with battery storage works by converting sunlight into electricity using solar panels. The electricity is then stored in a battery bank. When you need electricity, the battery bank provides power to your home.

If your solar panel system is generating more electricity than you are using, the excess electricity will be sent back to the grid. This is called net metering. Net metering allows you to receive credit for the electricity you send back to the grid. This credit can be used to offset the cost of electricity that you pull from the grid at night or on cloudy days.

House Without Solar Panels and Batteries

A house without solar panels and batteries is connected to the electrical grid. This means that the house pulls electricity from the grid to power everything in the house. When you turn on a light, turn on the TV, or use any other electrical appliance, electricity flows from the grid into your home.

The amount of electricity you use is measured by an electrical meter that is located on the outside of your home. At the end of each month, you receive a bill from your electric company for the amount of electricity you use.

House With Solar Panels

A house with solar panels can still be connected to the electrical grid, but it can also generate its own electricity using solar panels. Solar panels convert sunlight into electricity, which can then be used to power the home.

If the solar panels are generating more electricity than the house is using, the excess electricity will be sent back to the grid. This is called net metering. Net metering allows homeowners to receive credit for the electricity they send back to the grid. This credit can be used to offset the cost of electricity that they pull from the grid at night or on cloudy days.

House with Solar Panels and Batteries

A house with solar panels and batteries is the most self-sufficient type of home energy system, like Tesla Solar Singles. Solar panels generate electricity during the day, which can be used to power the home or stored in batteries. When the sun is not shining or when the homeowner is using more electricity than the solar panels are generating. Then the batteries can provide power to the home.

With a solar panel system and battery storage, homeowners can theoretically be completely self-sufficient. So, it’ll never have to pull electricity from the grid. This can be beneficial in areas where power outages are common. Also, in areas where the cost of electricity is high.

What is Net Metering?

Net metering is a billing arrangement that allows homeowners with solar panels to send excess electricity back to the grid in exchange for credit. This credit can be used to offset the cost of electricity that homeowners pull from the grid at night or on cloudy days.

Net metering is not available in all areas. Also, the terms of net metering agreements can vary from state to state. Homeowners who are interested in installing solar panels should contact their electric company to learn more about net metering in their area.

When Was Net Metering Introduced to Nigeria

Net metering in Nigeria was introduced in 2015 as part of the National Renewable Energy and Energy Efficiency Policy. However, it was not until 2023 that the Nigerian Electricity Regulatory Commission (NERC) opened three investment windows. Which are for net metering, feed-in tariff, and capacities above earlier agreed thresholds to encourage investments in grid-connected renewable energy projects in the country.

This means that net metering has been available in Nigeria for the past 8 years. However, it has only recently become more accessible to homeowners and businesses. Here is a timeline of Net Metering in Nigeria:

  • 2015: NERC approves net metering in Nigeria.
  • 2020: NERC sets a target of generating a minimum of 2,000MW of electricity from renewables by the year 2020.
  • 2023: NERC opens three investment windows for net metering, feed-in tariff, and capacities above earlier agreed thresholds to encourage investments in grid-connected renewable energy projects in the country.

How to Qualify For Net Metering In Nigeria With Solar Panels

To qualify for net metering in Nigeria, homeowners and businesses must:

  1. Have a solar energy system that is installed by a licensed installer.
  2. Interconnect their solar energy system with the grid.
  3. Sign a net metering agreement with their electric utility company.

The first two steps are relatively straightforward. Homeowners and businesses can find licensed solar installers in Nigeria by contacting the Nigerian Renewable Energy Association (NREA). The NREA also provides information on how to interconnect solar energy systems with the grid.

The third step, signing a net metering agreement with an electric utility company, can be more challenging. Not all electric utility companies in Nigeria offer net metering. Homeowners and businesses should contact their electric utility company to inquire about net metering eligibility.

If an electric utility company does offer net metering, homeowners and businesses will need to sign a net metering agreement. This agreement will outline the terms and conditions of the net metering program. Which includes the rate at which homeowners and businesses will be credited for the excess electricity they generate.

Once a net metering agreement is in place, homeowners and businesses will be able to start generating and using their own solar energy. They will also be able to sell any excess electricity they generate back to their electric utility company. Which is at the same rate that they are charged for the electricity they use. This means that their electricity bills will be offset by the amount of electricity they generate.

Net metering is a great way for homeowners and businesses to reduce their electricity bills and increase their self-sufficiency. It is also a way to support the development of renewable energy in Nigeria.

Why Use Net Metering in Nigeria?

Net metering in Nigeria allows you to save money on your electricity bills and be more self-sufficient with solar power. When your solar panels generate more electricity than you use, the excess goes back to the grid, earning you credits. These credits reduce the cost of electricity you pull from the grid when the sun isn’t shining or on cloudy days. It’s a cost-effective way to harness solar energy and support renewable energy in Nigeria.

How Much You Will Save With The Net Metering

The actual cost of electricity may vary depending on your location and the electricity distribution company overseeing it. So, the average cost of 1 kWh of electricity in Nigeria in 2023 is:

  • N23.59 per 1 kWh for households.
  • N38.53 per 1 kWh for businesses.

This means that 100 kWh of electricity would cost:

  • N2,359 per 100 kWh for households.
  • N3,853 per 100 kWh for businesses.

Example of Net Metering Savings in Nigeria

So, let’s do the maths of how much you will be saving when you use net metering in Nigeria:

Month 1: Your solar panels generate 500 kWh of electricity, but you only consume 300 kWh. So, you will have 200 kWh left. Then, you sell the remaining 200 kWh of electricity back to the utility company at the retail rate of N23.59 per kWh. Credit from the utility: N4,718.

Month 2: Your solar panels generate 400 kWh of electricity, but you consume 550 kWh. You purchase the additional 150 kWh of electricity from the utility company at the retail rate of N23.59 per kWh. Electricity bill: N3,538.

Month 3: Your solar panels generate 650 kWh of electricity, but you consume 300 kWh. You sell the remaining 350 kWh of electricity back to the utility company at the retail rate of N23.59 per kWh. Credit from the utility: N8,256.

So, at the end of the three months, you will make:

Total credit from the utility: N12,974 of 550 kWh

Total electricity bill: N3,538 of 150 kWh

Net electricity bill: N12,974 – N3,538 = N9,436 of 400 kWh

This means that you made an extra 400 kWh of electricity. This made you about N9,436 on your electricity bill, which you can use in the coming months or add on. Net metering is a great way to save money on your electricity bill, and it can also help to reduce your carbon footprint.