Cost of Electricity Per kWh in Nigeria: The Real Numbers

The cost of electricity per kWh in Nigeria is not one number, and anyone who gives you one is answering a different question than the one you asked. A Band A customer has paid N209.50 per kWh since July 2024. A Band B customer, two hours of daily supply behind them, pays N63 per kWh. The same business running a generator for the hours the grid does not show up is paying over 600 naira per kWh for fuel alone. None of those three numbers is the cost of producing the power.

This guide gives you four prices per kWh instead of one, each traced to its source, and it separates the two things every ranking page conflates: the price you are billed, and what the electricity actually costs to deliver.

The short answer: four prices per kWh

The spread between the top and bottom of that table is the whole story of Nigerian energy economics. Read on for where each number comes from, and which one applies to you.

What you pay on the grid: the NERC service bands

Nigeria prices grid electricity by service quality, not by consumption tier. Under the Service Based Tariff regime, the Nigerian Electricity Regulatory Commission classifies every feeder into one of five bands by minimum guaranteed hours of supply: Band A at 20 hours, Band B at 16, Band C at 12, Band D at 8 and Band E at 4. Your band is a property of your feeder, not a plan you choose.

Band A: N209.50 per kWh, unchanged since July 2024

Band A is the only band with a clean, regulator-traceable rate. In July 2024 NERC approved a move from N206.80/kWh to N209.50/kWh, with DisCos including IBEDC and Kaduna Electric notifying customers directly, and the same notices confirmed that tariffs for Bands B, C, D and E remained unchanged. That rate has held. NERC's own First Quarter 2026 report confirms all three supplementary tariff orders issued in the quarter retained end-user tariffs at the rates payable in July 2024.

Band A is also a minority position, covering approximately 15 per cent of power consumers nationwide.

Bands B to E: the gap nobody can justify

Here is where most published tables go wrong, so here is the honest version. Band B customers, who receive 17 to 18 hours of supply, pay N63 per kWh, while Band A customers with two hours more pay N209 per kWh. Three times the price for two extra hours of supply a day. Nigeria's Power Minister has said so himself: "The gap between the Band A tariffs and Bands B, C, D, and E is just too wide. We believe it's not fair", alongside a proposal to restructure the system into Bands A, B and C and eliminate D and E.

For Bands C, D and E, we are not going to publish a table. Rates for the lower bands are legacy figures that vary by distribution company and customer class, published sources contradict each other, and none of the ones circulating trace to a specific NERC order. If you are in a lower band, the number on your bill is the number, and the sections below matter far more to your actual energy cost than your tariff does.

How to read your own tariff off a vending receipt

NERC confirms the arithmetic directly: divide the naira you vended by the kWh units shown on the receipt and you have your tariff, with the VAT payable as tax deducted first. That is the only rate that is definitively yours.

Assuming you have a meter at all. As of the end of March 2026, 7,324,097 out of 12,386,848 active registered customers were metered, a rate of 59.13 per cent. Roughly four in ten grid customers are billed on estimate, which means they have no per-kWh price at all, only a monthly figure and an energy cap.

The tariff is not the cost

This is the section missing from every page competing for this keyword, and it changes how you should read every number above.

Nigerian end-user tariffs are frozen below what the power costs, and the Federal Government pays the difference. In the first quarter of 2026, electricity generation attracted invoices of N689.72 billion, but NBET billed the DisCos only N331.40 billion because the government took responsibility for roughly 52 per cent, N358.32 billion, of total generation cost. The monthly breakdown was N126.48 billion in January, N116.34 billion in February and N115.50 billion in March. NERC states the mechanism plainly: in the absence of cost-reflective tariffs, the government covers the gap between the approved tariff and the actual cost of electricity.

The same gap has a per-kWh expression. The November 2024 Multi-Year Tariff Order put the cost-reflective tariff for Band A Non-MD customers at N231.79/kWh against an allowed tariff of N209.50/kWh, a shortfall of N22.29 on every unit sold. For Band A MD1 customers the cost-reflective figure was N225.90 and for MD2 N220.01, both against the same N209.50 allowed rate.

Note also what the subsidy is not buying. Even as the government spent N358.32 billion in the quarter, average available generation capacity fell 17.45 per cent, from 5,400.38MW to 4,457.96MW, and total generation dropped 9.64 per cent to 8,883.47GWh. NERC was explicit that the smaller subsidy bill versus Q4 2025 came from DisCos buying less electricity, not from any move to cost-reflective pricing.

So a low band tariff is not cheap power. It is subsidised power that arrives for part of the day. Which brings us to the number most Nigerian businesses actually pay.

What most Nigerians actually pay: diesel and petrol per kWh

The 2026 fuel reset

The single most important number for anyone budgeting energy in Nigeria this year did not come from NERC. The National Bureau of Statistics reports that the average retail price of automotive gas oil reached N3,277.47 per litre in May 2026, up 86.40 per cent year on year from N1,758.26 and up 32.44 per cent in a single month from N2,474.69 in April.

That is a survey figure, not a projection. The NBS Price Watch is collected from sample outlets across all 774 local government areas in the 36 states and the FCT, from over 10,000 respondents, by over 700 NBS staff under quality-control monitoring.

What that means per kWh

Before the 2026 fuel reset, RMI and GEAPP put the cost of generator power at over 600 NGN/kWh, about US$0.40/kWh, for fuel alone, excluding the generator, servicing and replacement. Academic modelling puts the ceiling higher still. A techno-economic study across all six geopolitical zones found standalone diesel systems need US$0.54 to US$0.62/kWh to break even, with a separate study reporting diesel cost of energy at US$0.651/kWh against US$0.183/kWh for a hybrid PV system. Larger commercial and industrial operators with better fuel logistics do better, reporting US$0.30 to US$0.44/kWh.

Whichever end of that range you sit at, diesel is the cost ceiling, and the strategic implication is simple: any technology that delivers power below the diesel breakeven is economically viable in this market. That framing is what we unpack in detail when comparing solar versus a diesel generator over five years.

The national bill

The aggregate is staggering. Nigerian households and SMEs collectively spend US$12 billion a year buying and running generators. Manufacturers Association of Nigeria members alone spent N1.34 trillion on alternative energy in 2025, up 71.4 per cent in two years from N781.68 billion in 2023 and N1.11 trillion in 2024.

Mini-grids and solar hybrids: N150 to N450 per kWh

Mini-grid tariffs are the most misreported figures in this space, usually because writers quote a model instead of a bill. RMI and GEAPP documented the first wave of interconnected mini-grids in Nigeria and published what four pilots actually charged end users: 450, 150, 250 and 215 NGN/kWh.

Why is the number not lower, when the fuel is free? Because capital, not fuel, dominates. Median total capex across those projects was US$2,547 per kWp and US$1,323 per connection, with distribution and interconnection accounting for nearly half of total project cost. The affordability gap this creates is well documented: mini-grid power at N250 to N300/kWh against a national grid price of N53 to N76/kWh has been identified as the primary deterrent to adoption, even though the grid comparison is unfair for the reasons set out above.

Fuel choice inside the hybrid moves the number materially. HOMER simulation of the 85kW Gbamu Gbamu mini-grid found a solar-plus-battery-plus-CNG configuration reaching US$0.364/kWh, about N162/kWh and a 38 per cent reduction on the diesel base case, with LPG at US$0.507/kWh, about N225/kWh.

The Mokoloki project shows what these economics feel like from inside. Before the mini-grid, the community sat on a Band E feeder with 4 to 5 hours of daily supply at an approved tariff of N24.97/kWh. After commissioning, with supply above 20 hours a day, NERC approved N120/kWh for daytime residential use and N140/kWh from 4pm to 9am. Then the inputs moved: diesel went from N250 per litre in 2020 to N1,050 in 2023 while the naira went from 411 to 1,097 per US dollar. The retail tariff was adjusted to N162/kWh, and the developer cut power availability to about 60 per cent, down from 22 hours, to manage costs.

That last detail is the lesson. When a decentralised system depends on imported fuel, currency and commodity risk gets passed straight through to hours of supply. The systems that hold their cost per kWh are the ones whose fuel does not have a global price.

The column the comparison tables leave out: waste to energy

Every cost-per-kWh guide on this topic compares grid, generator and solar. None of them price the fourth option, which is the one where the fuel is a local waste stream that somebody is currently paying to dispose of.

What gasification costs per kWh in Nigeria

A 2026 techno-economic assessment of small-scale agricultural waste-to-energy pathways in Nigeria compared three routes head to head. Gasification coupled to an internal combustion engine delivered the highest net electricity yield at 574.2 kWh per tonne and the lowest levelised cost of electricity at US$0.138/kWh, against combustion with an Organic Rankine Cycle at 311.4 kWh/t and US$0.175/kWh, and anaerobic digestion at 169.2 kWh/t and US$0.176/kWh.

Set US$0.138/kWh next to the US$0.54 to US$0.62/kWh standalone diesel breakeven and the argument makes itself. To be precise about what that figure is: it is a modelled result from a Nigerian academic study, not a delivered project price. It tells you the shape of the economics, not what a specific plant will quote you.

Why the feedstock line changes the arithmetic

Diesel economics are dominated by a fuel price set in dollars on a global market. Waste-to-energy economics are not. In the Nigerian study, annualised capital cost and fixed operation and maintenance expenses dominate the LCOE across all pathways, with feedstock logistics modelled at just US$5 to US$20 per tonne. Gasification-ICE also requires less than half the annual feedstock mass that combustion-ORC and anaerobic digestion need for its output, which shrinks the collection radius and the logistics bill with it.

At Energaia this is precisely the model we build to. Our public five-step process is to collect local biomass or sludge, gasify it at high temperature into clean syngas, convert that syngas into dispatchable electricity and heat, capture biochar and verified CO2 offsets, and run the whole system on-site where the feedstock and the demand already are. That fourth step matters to the cost per kWh: biochar and certified offsets are a second revenue line against the same capital, and carbon credit certification, trading strategy and MRV are part of our service scope rather than an afterthought.

What decides whether the number holds

Honesty about the failure mode is more useful than the headline figure. The Nigerian study's sensitivity analysis is unambiguous: capacity factor is the most influential economic parameter for all pathways, and a 20 per cent reduction in capacity factor raises LCOE by roughly 16 to 20 per cent. A gasifier that is down is a gasifier with terrible economics. The same paper names the practical causes: producer-gas quality constraints, especially tar formation and particulate contamination, which damage engines and increase downtime if gas cleaning is inadequate.

This is why our engineering position is that thermal pre-treatment is non-negotiable in gasification and pyrolysis: moisture reduction, energy density and feedstock homogenization decide everything downstream, and downstream is where your capacity factor lives. It is also why we built a MATLAB-based VOC simulation suite to model volatile organic compound emissions in biomass-to-energy systems before any steel is ordered. Simulate the plant first, then price the kWh. The mechanics of the full conversion chain are covered in our guide to how waste to energy works, and the deployment case for weak-grid markets in waste to energy for emerging markets.

Cost per kWh by who you are

Households. The band tariff only applies to the hours the band actually delivers, and most Nigerian households never see a tariff at all. Against roughly 49.5 million households, NERC counts 12.31 million active electricity customers, implying about 75.13 per cent of households lack a grid connection, with 5.10 million of the connected still on estimated billing as of February 2026. Nationally, the grid meets 20 per cent of demand, and 150 million people, 75 per cent of the population, have no or unreliable access.

SMEs. Your real rate is a blend: the band tariff for the hours you get, and the generator rate for the hours you do not. If you are in a low band, most of your kilowatt-hours are priced by the pump, not by NERC. That blended number is the one to test alternatives against, and it is the starting point for alternatives to a diesel generator for a Nigerian business.

Manufacturers. The competitiveness gap is quantified. Industrial power costs a Vietnamese factory about 8 US cents per kWh and a Chinese factory about 10, while the Nigerian pays 15 cents on the grid, rising towards 30 once the diesel generator takes over. Nigerian manufacturers pay between two and ten times more than competitors in Vietnam and China for power, credit and logistics, and the stated benchmark for industrial viability is round-the-clock power at 8 to 10 cents per kWh. The burden shows up in the cost base: MAN puts energy at 35 per cent of production costs, and RMI found manufacturers allocating up to 40 per cent of operating costs to energy.

How to work out your own cost per kWh

Four steps, in order.

1. Read your grid rate off the receipt. Naira vended divided by units received, with VAT deducted. Do not trust a published table over your own vending slip.
2. Count the hours you actually get. Compare them to your band's minimum. NERC's rules provide that where a DisCo fails to deliver the approved minimum hours, performance is evaluated over 60 days and the rates payable by all customers in that cluster are adjusted in line with the quality of service delivered. Documenting your hours is not complaining, it is the regulatory mechanism working as designed.
3. Price the generator hours from measurement, not memory. Litres burned per hour, multiplied by the current diesel price, divided by kWh actually produced. Use your own metered output, and anchor the fuel price to the NBS monthly Price Watch rather than last year's number, because the May 2026 figure was 86.40 per cent above the year before.
4. Blend them. Weight each rate by the share of your kilowatt-hours it supplies. The result is your real cost per kWh, and it is the only number worth comparing against a mini-grid tariff or a waste-to-energy levelised cost.

Do that arithmetic and the strategic question usually answers itself. If your blended rate sits anywhere near the diesel band, you are paying a global commodity price for local energy while a local feedstock stream goes to a dump site. That is the arbitrage decentralised waste-to-energy exists to capture, and it is the same logic behind every serious look at off grid power solutions in Nigeria.

FAQ

How much is one unit of electricity in Nigeria?

One unit is one kilowatt-hour. Band A customers have paid N209.50/kWh since July 2024 and Band B customers pay N63/kWh, but there is no single national price. Your rate depends on your feeder's service band and your distribution company, and about four in ten grid customers are unmetered and billed on estimate rather than at a per-kWh rate.

Can waste to energy beat diesel on cost per kWh in Nigeria?

On the modelling, yes, and by a wide margin. A 2026 Nigeria-specific techno-economic study puts small-scale gasification coupled to an internal combustion engine at US$0.138/kWh against a standalone diesel breakeven of US$0.54 to US$0.62/kWh. The condition is uptime: a 20 per cent drop in capacity factor raises levelised cost by 16 to 20 per cent, which is why feedstock preparation and gas cleaning decide the economics.

Why is Nigerian electricity expensive when the tariff looks low?

Because the tariff is not the cost. Tariffs are frozen at July 2024 rates, so in Q1 2026 the Federal Government absorbed N358.32 billion, about 52 per cent of generation cost. Per unit, Band A's cost-reflective tariff was N231.79/kWh against an allowed N209.50/kWh. A low tariff on a feeder that supplies eight hours a day is not cheap electricity, it is subsidised electricity plus a generator bill.