ISLAMABAD: The Power Division clarified on Thursday that no final decision has been made regarding proposed changes to Pakistan’s net metering policy, emphasizing that consultations are still underway and several proposals are under consideration.
Amid widespread speculation, a spokesperson for the Power Division said it is premature to draw conclusions—particularly regarding reports that the solar buyback rate might be reduced to Rs10 per unit. “The matter has yet to be reviewed by the prime minister, and no final decision has been reached,” the spokesperson stated.
Sources within the Ministry of Energy confirmed that a policy revision is being considered in principle. A summary of proposed changes has been prepared and is expected to be presented to the federal cabinet for approval after the upcoming budget.
One key proposal under review is to lower the per-unit rate paid to solar energy producers from Rs27 to Rs10. However, sources stressed that discussions remain ongoing, and any final decision will be made with consumer interests in mind.
Solar energy production in Pakistan has reached a significant milestone of 5,000 megawatts, with 1,400 megawatts generated in the Lahore Electric Supply Company (LESCO) area alone. The sector has seen rapid growth—from just 321MW in 2021 to over 4,124MW by the end of 2024. Similarly, the number of net metering consumers surged from 226,440 in October 2024 to 283,000 by December.
The Economic Coordination Committee (ECC), led by Finance Minister Muhammad Aurangzeb, has raised concerns that the swift rise in net metering is placing an undue financial burden on traditional grid consumers. According to government estimates, net metering users had shifted Rs159 billion in costs to the broader consumer base by December 2024—a figure projected to reach Rs4.24 trillion by 2034 if left unaddressed.
However, many argue the problem runs deeper than just solar incentives. Much of the current pricing stress stems from legacy agreements with Independent Power Producers (IPPs), signed between 2013 and 2018, which locked Pakistan into some of the region’s highest electricity tariffs. Critics say these contracts—signed under less competitive terms—continue to strain the economy and distort electricity pricing across the board.
Introduced under the 2006 Renewable Energy Policy to curb loadshedding and encourage clean energy, net metering allowed consumers to reduce bills by generating their own power and selling the excess to the grid. Once praised as a breakthrough policy for both consumers and sustainability, it is now facing scrutiny as market conditions evolve.
With solar panel costs falling and installations rising rapidly, policymakers are now reassessing the long-term impact of the policy, seeking a balance between encouraging renewable energy and maintaining a financially viable and equitable electricity grid.
