The Power Division announced on Thursday that no conclusive determination has been made regarding modifications to Pakistan’s net metering policy. The division clarified that the consultation process is still underway, and various proposals continue to be assessed.
A spokesperson for the Power Division stated that it is premature to form an opinion on reports suggesting the buyback rate for net metering consumers might be reduced to Rs10 per unit. They added that the matter still requires presentation to the Prime Minister, and a definitive outcome has not yet been reached.
Sources within the Ministry of Energy indicated that a principled decision has been taken to revise the net metering policy. A summary on this matter has been prepared and is slated for submission to the federal cabinet for approval subsequent to the budget.
Among the proposals currently under review is a suggestion to decrease the per-unit cash payment to solar consumers from the current Rs27 to Rs10, according to these sources.
The sources also mentioned that discussions on the new policy are ongoing, and a final decision will be made after thorough consultations, with consumer interests as a primary consideration.
According to sources, solar energy production in the country has reached 5,000 megawatts, with 1,400 megawatts of this capacity generated within the Lahore Electric Supply Company (Lesco) network.
Solar capacity experienced a dramatic increase from 321MW in 2021 to over 4,124MW by December 2024. Concurrently, the number of net metering consumers surged from 226,440 in October 2024 to 283,000 by the end of the year.
The Economic Coordination Committee (ECC), led by Finance Minister Muhammad Aurangzeb, asserts that this rapid expansion is unfairly burdening grid consumers. Government figures indicate that net metering users shifted costs amounting to Rs159 billion by December 2024 — a figure projected to escalate to Rs4.240 trillion by 2034 if no corrective actions are implemented.
However, this crisis extends beyond just solar policy. A long-standing grievance involves the legacy of high tariffs negotiated with Independent Power Producers (IPPs) between 2013 and 2018.
These contracts, established under less competitive circumstances, have resulted in some of Asia’s highest electricity tariffs.
Critics argue that these exorbitant rates not only strain the national economy but also exacerbate the cross-subsidization issue that the proposed revised net metering framework aims to address. In essence, Pakistani consumers continue to bear the financial cost of a system built on overpriced power generation.
Originally introduced under the 2006 Renewable Energy Policy with the goals of combating loadshedding and promoting cleaner energy, net metering allowed consumers to generate power for their own use while earning credits for surplus energy fed back into the grid.
This system was once lauded as a mutually beneficial solution, decreasing reliance on expensive fossil fuels and enabling households to contribute to a sustainable future.
However, as solar panel prices have dropped and installations have rapidly increased, the unforeseen consequences of the policy can no longer be overlooked.
Energy Minister Awais Leghari and the ECC contend that the explosive growth in solar adopters is unfairly transferring costs to grid users. With the rapid proliferation of net metering consumers, the fixed costs associated with power distribution and transmission are increasingly being borne by those who remain connected to the conventional grid.
This, they claim, necessitates urgent measures, such as a reduction in the buyback rate, to rebalance the cost distribution.
