Net Metering Policies: What You Need to Know Before Installing Solar

Net metering is fundamentally changing the economics of grid-connected solar in Africa. It allows consumers to feed excess solar energy back into the grid and receive credits that offset their electricity bills.

For installers and solar companies, net metering policies determine whether grid-connected solar is economically viable for residential and small commercial customers.

Understanding these policies is essential for designing systems, setting customer expectations, and positioning your business for growth in the grid-connected segment.

What Is Net Metering?

Net metering is a billing mechanism that measures the net flow of electricity between a customer’s solar system and the grid. When a solar system generates more electricity than the customer is consuming, the excess flows into the grid, and the customer receives a credit.

When the customer is consuming more electricity than the system is generating, electricity flows from the grid, and the customer is charged. At the end of a billing period, the customer pays only for the net electricity consumed.

The economic benefit is straightforward. A customer with a 5 kW solar system in a location with good solar resources can generate 20-25 kWh per day.

If the customer’s daily consumption is 15 kWh, the excess 5-10 kWh flows into the grid and generates credits. Over a year, these credits can offset 30-50% of the customer’s electricity bill, depending on the system size and consumption patterns.

Kenya’s Net Metering Framework

Kenya’s Energy and Petroleum Regulatory Authority (EPRA) finalized the Net-Metering Regulations in 2024, and they remain in effect in 2026 with ongoing refinements.

The regulations apply to renewable energy technologies including solar, wind, hydro, geothermal, and ocean energy. The framework is designed to be technology-neutral and to encourage distributed renewable energy generation.

Key Features of Kenya’s Net Metering:

• Eligible Technologies: Solar PV, wind, hydro, geothermal, and ocean energy.
• System Size Limits: No explicit upper limit, but systems must be registered with EPRA and the local distribution utility.
• Metering Requirements: Bidirectional meters that can measure energy flowing in both directions.
• Billing Mechanism: Net billing, where the customer pays for the net electricity consumed.
• Credit Carryover: Excess credits can be carried over to the next billing period, with annual settlement.
• Interconnection Standards: Systems must comply with EPRA’s grid connection standards, including automatic disconnection devices for safety.

For installers, the key requirement is that all grid-connected systems must be equipped with bidirectional meters and must comply with EPRA’s interconnection standards. This adds cost to the system (typically 5-10% of the total system cost), but it is mandatory.

South Africa’s Net Billing Framework

South Africa’s approach to net metering has evolved significantly. The National Energy Regulator of South Africa (Nersa) introduced new net billing rules in 2025 that differ from traditional net metering.

Under net billing, customers are charged for electricity consumed from the grid at the full retail rate, but they are compensated for excess solar energy at a lower rate (typically 50-70% of the retail rate).

Key Features of South Africa’s Net Billing:

• Consumption Charge: Full retail rate for electricity consumed from the grid.
• Export Compensation: 50-70% of the retail rate for excess solar energy fed into the grid.
• Tariff Structure: Time-of-use tariffs are increasingly common, with higher rates during peak hours and lower rates during off-peak hours.
• Homeflex Tariff: Eskom, South Africa’s national utility, has mandated that all grid-tied residential prosumers migrate to a “Homeflex” tariff, which is a sophisticated time-of-use tariff designed to incentivize solar generation during peak hours.

For installers, net billing is less favorable than net metering because the export compensation is lower than the consumption charge. However, it is still economically viable, particularly for customers with high daytime consumption or for systems paired with battery storage.

Uganda’s Feed-in Tariff vs. Net Metering

Uganda has not implemented a net metering policy. Instead, the country relies on feed-in tariffs (FITs) for grid-connected solar. Under the FIT, solar generators can sell excess energy to the grid at a guaranteed rate set by the Electricity Regulatory Authority (ERA).

The FIT rates in Uganda are structured by system size, with higher rates for smaller systems and lower rates for larger installations. For a 5 kW residential system, the FIT rate is approximately 0.25 USD/kWh (subject to periodic adjustments).

This is higher than the typical retail electricity rate in Uganda (approximately 0.15 USD/kWh), making solar projects highly attractive.

However, the FIT is not a net metering system. Customers must have a separate meter for solar generation, and they are compensated at the FIT rate for all excess energy, not just the net energy. This creates a different economic model and requires different system design considerations.

Tanzania and Other East African Countries

Tanzania is still developing its net metering framework. The country has issued draft regulations, but they have not yet been finalized. For installers operating in Tanzania, this creates uncertainty.

The best approach is to monitor regulatory developments and engage with the Tanzania Electric Supply Company (TANESCO) and the Energy and Water Utilities Regulatory Authority (EWURA) to understand the likely framework.

Read Also: Mini-Grids, EPCs, and Installers: How to Choose the Right Partner for Your Project

Practical Implications for System Design

Net metering policies have direct implications for system design. Under net metering (Kenya, Ghana), the optimal system size is typically 80-100% of the customer’s average annual consumption, as larger systems generate excess energy that may not be fully utilized.

Under net billing (South Africa), the optimal system size is smaller, typically 50-70% of consumption, because excess energy is compensated at a lower rate.

For installers, this means that you must understand the local net metering or net billing policy before designing a system. A system that is optimal in Kenya may not be optimal in South Africa. Educating customers about these differences and designing systems accordingly will build trust and lead to satisfied customers.

The Future of Net Metering in Africa

Net metering policies are evolving rapidly. Several African countries are moving away from traditional net metering toward net billing or time-of-use tariffs, as utilities seek to manage the financial impact of distributed solar generation.

For installers, this means staying informed about regulatory changes and being prepared to adapt system designs as policies evolve.

Additionally, battery storage is beginning to play a larger role in net metering economics. In countries with time-of-use tariffs, customers can use batteries to store solar energy generated during off-peak hours and use it during peak hours, when electricity rates are higher. This creates a new opportunity for installers to offer battery-integrated systems.