How Net Metering Actually Works for Homes and Businesses in 2026

The Two Frameworks: Net Metering and Self Consumption

Egypt has two closely related frameworks for rooftop solar. Understanding which applies to each project is the first step for any EPC.

The net metering system allows the solar installation to be connected to the distribution grid. Surplus power generated beyond the client's immediate consumption is exported to the grid. The grid acts as a storage mechanism: when the client generates more than they use, the surplus is credited against future consumption. When the client consumes more than they generate (evenings, cloudy periods), they draw from the grid and the credit offsets the bill. This is the most common arrangement for residential and small commercial systems.

The self consumption system can be either grid connected or isolated. In the grid connected version, the system is designed primarily for self consumption but can also inject surplus to the grid under specific conditions. In the isolated version, the system is entirely off grid and serves the client's load independently. For systems seeking to use batteries under the self consumption framework, specific requirements apply.

According to CMS Law's Egypt renewable energy guide, the total generation capacity under both frameworks is capped at 1,000 MW nationally, covering existing and future projects combined. EPCs should note that this cap, when reached, would halt new applications under this framework until the cap is reviewed.

Who Needs Approval and From Whom

For grid connected systems under either framework, the client or the developer acting on their behalf must:

• Submit a connection application to the relevant distribution company (the Egyptian Electricity Holding Company's distribution affiliate for their area, or EETC for transmission connected systems)
• Obtain prior approval from the network operator before connecting the system
• Obtain a generation licence from EgyptERA for isolated self consumption plants above a certain capacity
• Meet technical standards including specific requirements for meters, inverters, and protection systems

For small systems below 10 MW seeking grid integration, the merger fee (a grid integration charge introduced by EgyptERA Circular No. 3 for 2022) is waived. Systems up to 500 kW in capacity are fully exempt from the merger fee. Systems above 500 kW but below 10 MW benefit from the partial exemption for self consumption under the 2022 circular amendments.

The Battery Rules

Egypt's framework explicitly allows batteries to be used with the self consumption system, but with specific conditions that EPCs must communicate clearly to clients:

• Batteries must be integrated with the solar plant as a single system, not added independently
• Batteries must be used only for the consumer's own needs, to reduce imbalances between generation and consumption
• Battery capacity must not exceed 20% of the generation capacity of the solar plant
• In case of network disconnection, the entire system including battery must isolate through appropriate circuit breakers with voltage sensors
• Smoke detectors are required at the battery location
• Compliance with the international fire safety standard IEC 62619 is mandatory
• For batteries above 100 kWh capacity, additional overcurrent protection systems must be installed

The 20% capacity limit on batteries relative to solar generation capacity is an important constraint. A 10 kW solar system can only be paired with a maximum 2 kWh battery under this rule. This limits the energy storage benefit for residential systems but is less constraining for larger commercial installations.

The Step by Step Connection Process

The process for connecting a net metering or self consumption system in Egypt follows these stages:

Step 1: Technical approval

Submit system specifications to the distribution company. Wait for their technical review and approval of the single line diagram and equipment list.

Step 2: Installation

Install the solar system according to approved specifications. All work must comply with Egyptian electrical installation standards.

Step 3: Technical inspection

The distribution company conducts a site inspection to verify the installation meets technical requirements.

Step 4: Meter installation and testing

The parties conduct technical inspections, install appropriate electricity meters, and finalize meter readings. For surplus power sale under net metering, a bidirectional meter is installed.

Step 5: PPA signature and commercial operation

The power purchase agreement for surplus energy (if applicable) is signed within 5 working days of receiving the seller's written request. The system then begins commercial operation.

The total timeline from initial submission to commercial operation varies by distribution area and system size but typically runs 4 to 12 weeks for residential systems and longer for commercial installations requiring technical review of more complex designs.

Frequently Asked Questions

Q1. What is the 1,000 MW national cap and is it close to being reached?

The 1,000 MW cap applies to the total capacity of all solar PV projects connected under Egypt's net metering and self consumption framework, covering both existing installed capacity and projects in the pipeline. EgyptERA tracks the cumulative capacity. As of early 2026, Egypt's total rooftop solar capacity under this framework is significantly below the 1,000 MW cap, but the pace of new installations is increasing rapidly as tariff increases make solar more attractive. EPCs should monitor EgyptERA's published capacity data and advise clients that if the cap is reached, new applications may be paused pending a regulatory review and potential increase of the cap.

Q2. Can businesses sell excess solar power to the grid in Egypt?

Yes, under the net metering framework. Surplus power generated beyond the consumer's immediate consumption is exported to the grid and credited against future consumption bills. The credit mechanism operates through the bidirectional meter, which measures both power consumed from the grid and power exported to the grid. Net metering in Egypt works as a bill offset, not a cash payment, so the value of the credit is the avoided electricity cost at the tariff rate applicable to the consumer. For businesses in higher tariff brackets, this represents a meaningful financial benefit on top of the self consumed solar generation.

Sources

• CMS Law — cms.law — CMS Expert Guide to Renewable Energy: Egypt — net metering cap, self consumption rules, merger fee details, battery conditions
• EgyptERA — egyptera.org — Egyptian Electricity Regulatory Authority — Circular No. 3 of 2022, regulations for renewable energy connection
• Middle East Observer — meobserver.org — Egypt accelerates shift toward rooftop solar — net metering framework context (April 19, 2026)