Mahama promises net metering law to let businesses profit from solar power sales

President John Mahama has announced plans to introduce net metering legislation that will enable Ghanaian businesses to generate revenue by supplying surplus electricity from their solar installations to the national grid. The government intends to work with Parliament to pass a net metering bill that would create a formal framework for this arrangement, marking a significant step towards incentivising renewable energy adoption among the private sector.

Speaking during the inauguration of Northshore Apparel in Savelugu, the President outlined how the proposed system would function. Companies that invest in solar power generation and produce more electricity than they consume would be able to feed the excess power into the national grid through their local electricity distributor, with NEDCO handling the transactions and compensation.

How the net metering system will work

Under the proposed framework, specialised meters would be installed at participating businesses to track electricity flow in both directions. These meters would calculate exactly how much power a company supplies to the grid versus how much it withdraws. If a business generates more power than it uses, NEDCO would be obligated to pay them for the surplus electricity supplied. Conversely, if a company consumes more power from the grid than it generates from its solar installation, it would pay NEDCO for the difference, similar to a standard electricity bill.

This arrangement creates a financial incentive for companies to invest in renewable energy capacity. A business could offset its electricity costs significantly or even generate additional revenue by scaling up its solar installation beyond its own operational needs. The system encourages energy independence whilst supporting Ghana's broader renewable energy goals.

Why it matters for Ghana

Net metering represents a crucial policy tool for accelerating Ghana's transition towards renewable energy. The country faces ongoing challenges with electricity supply reliability and the high costs associated with diesel-powered generation. By enabling private companies to contribute renewable energy to the national grid, Ghana can reduce strain on NEDCO's generation capacity whilst lowering overall system costs.

For businesses, net metering reduces the financial burden of electricity expenses, making their operations more competitive. Companies like Northshore Apparel that have already invested in solar installations would immediately benefit from this scheme, whilst the prospect of earning revenue from excess generation could motivate other businesses to adopt solar technology. This distributed generation model also enhances grid resilience by diversifying power sources across the country.

The proposal aligns with Ghana's commitment to renewable energy targets under international climate agreements. Rather than relying solely on centralised generation infrastructure, net metering taps into the entrepreneurial energy of the private sector to expand renewable capacity nationwide. However, successful implementation will require careful regulatory design to ensure fair compensation rates, grid stability management and clear dispute resolution mechanisms between businesses and NEDCO.

Next steps and implementation

The government must now navigate Parliament to pass the net metering bill, defining technical standards, compensation rates and the regulatory oversight mechanism. Key questions remain about how rates will be set, whether they will change seasonally, and how the system will handle grid capacity constraints during peak generation periods. Establishing these frameworks transparently will be essential to build business confidence in the scheme.