The government of Pakistan has recently introduced a revised solar net metering policy with significant amendments to its existing policy. This new policy aims to balance the interests of solar energy producers and grid-dependent consumers. These changes, effective as of March 2025, have sparked discussions regarding their impact on the nation’s renewable energy landscape. Federal Minister for Energy, Power Division, Sardar Awais Ahmad Leghari, on Sunday claimed that the number of solar net-metering consumers would increase despite new regulations.
Key Changes in the Revised Solar Net-Metering Policy
- Reduction in Buyback Tariff: The buyback rate for surplus electricity generated by rooftop solar systems has been reduced from Rs27 per unit to Rs10 per unit. This substantial decrease aims to address financial imbalances affecting grid consumers.
- Net Billing Introduction: The policy transitions from net metering to net billing, where consumers are compensated at Rs10 per unit for excess energy supplied to the grid. However, they will purchase electricity at standard rates of Rs42 per unit during off-peak hours and Rs48 per unit during peak hours, excluding taxes and duties.
- Capacity Installation Limits: Net-metered consumers are now restricted from installing solar capacity exceeding their sanctioned load, with a permissible margin of only 10%. This is significantly lower than the previous 50% allowance.
Rationale Behind the Policy Revisions
The government cites several reasons for these adjustments:
- Preventing Cost Shifting: Affluent urban households with large solar installations have been exporting surplus electricity to the grid. They are using it as a storage system without bearing associated capacity and transmission costs. This practice has led to a financial burden on grid-dependent consumers. Around 283,000 net metering users benefit from subsidies, while nearly 40 million electricity consumers, who cannot afford solar panels or net metering, bear the financial burden.
- Mitigating Financial Impact: The increasing number of net-metered consumers has resulted in a nine-paisa per unit impact on average electricity costs. Projections indicate that without policy changes, this could escalate to Rs3.6 by 2034, transferring an estimated Rs159 billion burden to grid consumers.
- Ensuring Grid Stability: The high concentration of surplus loads from net-metered systems in urban areas raises concerns about potential infrastructure strain, which could compromise supply stability.
Diverse Reactions to the Policy Changes
The revised policy has elicited mixed responses:
- Government’s Perspective: Officials assert that the new policy promotes energy price equity and prevents undue financial burdens on non-solar consumers. They emphasize that solar power remains a cost-effective alternative to grid electricity, and the policy adjustments are unlikely to deter the adoption of rooftop solar systems.
- Critics’ Concerns: Opponents argue that the reduction in buyback rates and the shift to net billing may discourage investment in solar energy. They contend that these changes could extend the payback period for solar installations, potentially hindering the growth of renewable energy adoption.
Implications for Pakistan’s Renewable Energy Future
The revised solar policy reflects the government’s effort to balance the promotion of renewable energy with the financial sustainability of the national grid. While the adjustments aim to distribute costs more equitably, they also present challenges for current and prospective solar energy consumers.
Conclusion
Pakistan’s revised solar net-metering policy represents a pivotal shift in the nation’s approach to integrating renewable energy into its power infrastructure. Meanwhile, by addressing financial imbalances and grid stability concerns, the government seeks to create a more equitable energy landscape. However, it is crucial to monitor the long-term effects of these changes to ensure they do not impede the progress toward a sustainable and renewable energy future.
Read more about the Power Sector: The Hidden Cost of Solar Net Metering in Pakistan: Who’s Paying the Price?
