The Brief: Nigeria’s new electricity tariffs are a game changer for commercial and industrial solar companies

The Event

The Nigerian Electricity Regulatory Commission (NERC) has announced a cost-reflective tariff of ₦225/kWh ($0.17/kWh) for customers (known as Band A customers) who receive at least 20 hours of electricity daily measured over one week. The ₦225/kWh ($0.17/kWh) Band A tariff before VAT is consistent across eleven distribution companies (discos) and varying customer segments. 

Previously, 18.7% of registered Nigerian electricity consumers were in Band A; now reduced to 15% to align with 20-hour daily electricity provision by discos, ensuring fair service following the 240% tariff increase.

The chart below compares the previous tariffs for Band A customers in the residential, commercial and industrial consumer segments to the new average cost-reflective tariff.

The new tariffs are effective from April 1st, which means they’ve been retroactively implemented. It’s worth noting that inflation rates, official exchange rates, and gas prices affect electricity tariffs in Nigeria.

The table above summarises the current rates that necessitated