Major Policy Shift in Solar Energy Tariffs
A major policy shift has been introduced in Pakistan’s solar power sector by Federal Government. The existing net metering system will be replaced with new billing policy. The government has claimed that this policy will cover grid infrastructure costs.
Under the old net metering system, solar consumers could balance electricity imported from the grid with electricity exported to it. This was done at equal retail rates. As a result, many consumers paid little to no electricity bill.
The new net billing policy will change this system completely. Electricity drawn from the grid will now be charged at the full national tariff. Solar electricity exported to the grid will be credited at a much lower differential rate.
The economic impact of this policy shift is expected to be severe. A household exporting 300 units and importing a similar amount could face a bill of nearly Rs10,000. Under the previous system, the bill would have been close to zero.
Government and Discos Defend Policy, Critics Disagree
The government and power distribution companies (Discos) have defended the new policy. They claim it is needed to cover grid infrastructure costs. They also say it will reduce revenue losses. Discos argue that the net metering system has become financially unsustainable.
However, critics have strongly opposed the change. They say it penalises consumers who invested their own money in solar systems. These consumers were seen as contributing to the national energy capacity. Now, they will face higher bills despite producing clean energy.
The policy shift comes amid ongoing operational issues in the solar sector. There is a backlog of pending net metering applications. Discos have yet to resolve these applications. Thousands of installed solar systems remain unmetered and unconnected.
Distribution companies such as Lesco have also suspended new solar meter installation cases. This follows directives from the federal ministry.
Nepra Recommends Gross Metering for Rooftop Solar
Last month, the National Electric Power Regulatory Authority (Nepra) recommended replacing net metering with gross metering. This recommendation was made under the proposed Nepra Prosumer Regulations (NPR).
Nepra said net metering is causing a growing financial burden on conventional grid users. Under the proposed rules, future solar consumers will use gross metering. They will trade electricity directly with Discos.
Existing net metering consumers with valid seven-year contracts will continue to receive Rs22 per unit for surplus electricity until their agreements expire.
For new solar installations, exports will be paid under gross metering at a proposed buyback tariff of Rs11.30 per unit. These contracts will last five years and may be extended on a mutual basis.
Nepra has invited stakeholder feedback within 30 days. It may also hold a public hearing before finalising the regulations.
Under net metering, exported electricity reduces a consumer’s bill. Under gross metering, the consumer is paid a fixed tariff for exports, while grid consumption is billed separately at retail rates. This makes the new policy a major shift in solar power economics in Pakistan.
