ISLAMABAD – Pakistani government’s recent decision to cut buyback rates of solar net metering sent shock waves across the country, but now there’s relief.
As the decision raised eyebrows, federal cabinet reportedly considered delaying approval of solar net metering policy. The decision was made by cabinet meeting led by PM Shahbaz Sharif, as top members let Power Division reassess policy due to concerns raised by several cabinet members.
The proposed revisions to the buyback tariff, saw huge criticism, as it was argued that it would increase financial pressure on grid consumers. The cabinet opted for further revisions before finalizing the policy.
This comes shortly after the Economic Coordination Committee (ECC) approved changes to solar net-metering regulations. The government has decided to reduce electricity buyback rate for solar users from Rs27 to Rs10 per unit.
The surge in solar panel usage resulted in surge of solar net-metering consumers, shifting financial burden of Rs159 billion onto grid consumers. The new buyback rate aims to balance the financial burden on grid consumers and ensure the sustainability of the power sector.
Existing net-metered consumers with valid agreements will not be affected by this change until their agreements expire. Additionally, the ECC has approved a new billing structure where exported electricity will be purchased at the Rs. 10 rate, while imported electricity will be billed at peak or off-peak rates.
Solar Net Metering Update
Amid contrasting reports, Renewable Energy Association Pakistan expressed concerns about recent changes to the Distributed Generation and Net Metering Regulations, warning that they could push consumers to switch to off-grid solutions, negatively impacting solar businesses and jobs.
The amendments include replacing net metering with gross metering and cutting the purchase price for solar energy, could lead to financial losses for solar investors who have imported costly inverters.
REAP highlighted three main issues: potential job losses in the solar sector, a shift to off-grid systems that would reduce government revenue, and the risk of imported inverters becoming obsolete.
The government plans to rationalize net metering to cut burden on consumers and invited REAP to share its concerns. Opinions on the changes are divided. Some experts criticize Discos for failing to anticipate the impact of solar power, while others, like Rehan Jawed, support the government’s decision, arguing it benefits industries in the long term.
Power Minister said the new rules have made solar panels more affordable, with over 4,000 MW of solar energy added to the grid and projections to exceed 12,000 MW in the next eight years.
Net Metering Contracts axed to 5 Years
Pakistani government has reduced the duration of net metering contracts to 5 years and lowered buyback rates for surplus solar power. Exported electricity will be purchased at an adjusted rate based on the National Average Power Purchase Price.
New regulations require stricter standards for net metering consumers, including specific inverter installations and capacity caps. The government is also working on reducing electricity tariffs by decommissioning inefficient power plants and negotiating with Independent Power Producers (IPPs), while addressing IMF concerns about off-grid solar owners.
Pakistan slashes Net Metering Contracts Duration to 5 Years to cut cost
