The government has introduced significant changes to the solar net-metering policy in Pakistan, slashing the buyback rate for solar energy to Rs10 per unit and eliminating the previous net billing system. The new policy, which will apply to all new solar users Pakistan, aims to control the impact of renewable energy on the national grid.
This policy revision, approved by the Economic Coordination Committee (ECC) of the Cabinet, came during a meeting chaired by Finance Minister Muhammad Aurangzeb. Under the revised framework, power companies will now buy surplus solar electricity from consumers at a rate of Rs10 per unit during the day. In contrast, consumers will purchase grid electricity at much higher rates—Rs42 per unit during off-peak hours and Rs48 per unit during peak hours, excluding taxes and duties.
One of the major changes is that solar consumers will no longer be allowed to install solar power capacity exceeding their sanctioned load by more than 10%, a significant reduction from the 50% margin previously allowed.
Impact on Existing Solar Consumers
The new policy will primarily affect new consumers, but existing solar users will gradually transition into this new system once their current contracts expire, which typically last seven years. While the Power Division justified the move by arguing that the previous net-metering system added to the average electricity cost, it raised concerns about the impact on the solar market.
Criticism of the Policy Change
Petroleum Minister Ali Pervez Malik criticized the government’s decision. He suggested that it could harm the market and consumer confidence. Power Minister Awais Leghari also raised concerns. He emphasized that the policy could impact off-grid solar projects. This is especially concerning for rural areas and agriculture, where solar power is vital.
There are also fears for salaried urban consumers. They already pay high electricity taxes. Now, they are forced to sell surplus solar energy at Rs10 per unit. They must purchase grid electricity at Rs65-70 per unit during peak hours. This makes it less cost-effective for them to continue with solar installations.
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Lack of Consultation and Transparency
One key criticism of the policy change is the lack of consultation. Stakeholders like Nepra, the Ministry of Finance, and the Federal Board of Revenue were not consulted. The Power Division claimed that the summary was shared with these bodies. However, their feedback couldn’t be included due to the urgency of the matter.
The ECC authorized the Power Division to continue implementing these changes, including adjustments to the buyback rate and billing mechanisms. Under the new rules, surplus solar units will be bought at the approved rate of Rs10, while imported units will be billed at peak or off-peak rates.
Regulatory Adjustments and Future Plans
The revised framework includes regulatory changes. These changes set limits on the hosting capacity of transformers and feeders. It also establishes standards for inverters to ensure real-time grid interaction. This aims to improve grid management quality. It will also prevent overloading caused by the rising number of solar net-metering consumers.
The decline in solar panel prices has led to a surge in the number of solar consumers. By December 2024, the number of solar net-metering consumers in Pakistan had reached 283,000, up from 226,440 in October 2024. However, without regulatory changes, the government warned that the cost burden on grid consumers could reach Rs4.24 trillion by 2034.
In other developments, the ECC approved a summary for potassium sulphate fertilizer export. It granted exemptions for companies in the Gwadar Free Zone. These companies can export up to 10,000 tonnes annually until 2025.
As the solar energy landscape evolves in Pakistan, these policy revisions will likely have lasting effects. They will impact both consumers and the renewable energy market.
