The solar energy sector of the country has undergone a major transformation. Increasing electricity bills, load shedding, and a push for carbonization, have created the right grounds for renewable energy. Among all the options for renewable energy solar power is the fastest growing option for private houses and businesses. A crucial enabler of this growth is Solar Net Metering Pakistan, a policy mechanism introduced to allow consumers to generate their own solar power and export surplus energy to the grid.
Solar net metering is a billing arrangement between the consumer and the local electricity distribution company (DISCO) when a consumer install solar panels system, it generates more electricity then what is consumed during day time period. With net metering this excess power is exported to the grid and the consumer gets credit on the electric bill. At night or during cloudy days the consumer imports power from the grid as usual. The bill at the end of the month is calculated on the “net” difference between imported and exported units. If exports exceed imports, the consumer receives a monetary credit or reduced bill. In the country this scheme is governed by NEPRA’s “Distributed Generation and Net Metering Regulation 1015” this policy turns consumers into “Prosumers” that is producers and consumers of electricity.Any customer with a three-phase connection up to 1 MW capacity can apply, though most rooftop systems are 3–25 kW in size. By this system the Govt. idea was to reduce the load on the grid, Get rid of dependence on imported fuels, and encourage private investment in renewable energy and to contribute to environmental goals. This scheme was launched in 2015 and it was a generous scheme. Surplus energy exported to the grid was compensated at relatively high rates linked to the National Average Power Purchase Price (NAPPP). Consumers were allowed to install systems up to 1.5 times their sanctioned load, with long-term licenses (up to 7 years) and straightforward approvals.These features meant attractive payback periods — as low as 2–4 years for a typical 5–15 kW rooftop installation. Residential users, commercial buildings, and even small industries rushed to adopt net-metered solar systems.This scheme proved a great success and the solar power generation witnessed a rapid growth over the next few years.The very success and rapid growth of the scheme created new challenges. Distribution companies now faced shortfalls as higher income consumers offset much of their consumption.Grid infrastructure in some areas struggled to handle two-way power flows. Policymakers grew concerned about subsidies and cross-subsidies. This led to proposals to revise or replace net metering with “net billing” at lower rates.
Pakistan’s new solar policy, NEPRA’s 2025 draft Prosumer Regulations, shifts from net metering to net billing, significantly reducing buyback rates for excess solar power (from Rs. 27 to Rs. 11/unit) to manage grid financial strain, shortens agreements to 5 years, requires NEPRA licenses for systems up to 25kW (previously exempt), and limits system size to installed load, aiming for grid stability while still encouraging renewables. Existing solar users continue under old rules until their contracts end, but new adopters face lower compensation and stricter rules.
On 21st December 2025, the ministry of energy approved a revised solar policy after interaction with NEPRA, DISCOs, and other stake holders and now under this new system the old net metering policy has been replaced with a net billing policy. The goal of this change is to improve grid stability, control financial losses in the power sector and adjust solar incentives according to current market conditions. According to the new polcy solar panel users will now receive Rs. 11.13/unit for the electricity they supplied to the national grid, Before this policy they were receiving Rs, 25.98 per unit which was much higher than the new rates. The govt. reasoning is that the old rate was creating financial pressures on the power sector and was not sustainable in the long run. Solar users will continue to pay according to the NEPRA approved electricity tariffs, peak and off peak rates will still apply and monthly bill structure will remain the same. Even after the policy change solar users will continue to enjoy lower electricity bills compared to non-solar users. Another important policy change is reduction of the solar agreement from 7 years to 5 years. After 5 years the agreement can be revised and tariff rates may change based on future policies. All solar installations up to 25 KW must now obtain a NEPRA license, earlier domestic and small commercial users were exempt from this requirement. According to government sources, most solar users will not face a major negative impact. But many solar users may face high bills in the winter season, especially business owners because now they have to pay bills at a high rate.Government policy has been instrumental in the rise of rooftop solar in Pakistan. The introduction of Solar Net Metering Pakistan created a win-win: consumers saved money, the country reduced fossil fuel dependence, and renewable capacity soared. Yet, this very success has highlighted structural challenges in grid management and revenue collection. The coming years will be crucial. With thoughtful reforms, Pakistan can sustain solar growth while ensuring fairness and grid stability. A well-calibrated policy can keep solar attractive, support climate goals, and strengthen the energy system.
In short, Solar Net Metering Pakistan remains a cornerstone of the country’s renewable energy transition — one that must be carefully nurtured, not undermined.
—The writer is Professor of History, based in Islamabad.
