ISLAMABAD:
Prime Minister Shehbaz Sharif’s government could face political backlash as solar net metering becomes all but dead after the National Electric Power Regulatory Authority (Nepra) abolished the trading of electricity units, dealing a blow to consumers hoping to switch to renewable energy.
Currently, the buyout rate for net solar generation stands at Rs25.9 per unit, which could be reduced to Rs11 per unit, while the contract duration has been reduced from seven to five years.
The burden of capacity payments from independent power producers (IPPs) is now being shifted to solar consumers. Distribution companies (discoms) will charge their own electricity rates, which can be as high as Rs 50 per unit, while purchasing daytime electricity from consumers at a possible price of Rs 11 per unit.
The new buyback rate is yet to be officially notified but was discussed at Rs11 per unit during consultations with stakeholders. Net solar consumers will have to pay the net difference to the discoms once the unit trading scheme ends.
The policy will not apply to existing consumers, but after the contract expired, nightclubs were allowed to either terminate the agreements or switch users to the new policy framework.
The electricity regulator has overhauled the country’s net metering regime, moving rooftop solar and other small generators to a new ‘net metering’ system under the NEPRA (Prosumer) Regulations, 2026, fundamentally changing the way power producers are paid and repealing the decade-old framework.
Under the new rules, notified by Nepra on Monday, utilities will be required to purchase excess electricity from prosumers – households, businesses and industries generating up to one megawatt – at the national average power purchase price, while selling the electricity back to them at the applicable consumer tariff, thereby ending individual net metering.
The regulations apply to solar, wind and biogas systems and come into force immediately, replacing the Nepra Distributed Generation and Net Metering for Alternative and Renewable Energy Regulations, 2015.
Existing prosumers will continue to benefit from their current agreements until they expire, but all future renewals will fall under the new billing structure.
Nepra has capped the maximum size of a distributed generation facility at one megawatt and limited system capacity to the consumer’s permitted load, with a key technical restriction prohibiting new connections if generation on a transformer reaches 80% of its rated capacity.
Systems of 250 kilowatts or more must have a mandatory load flow study. Utilities are required to process applications within strict time limits, acknowledge receipt of applications within five working days, complete technical reviews within 15 days, and install interconnection facilities within 15 days of payment.
Prosumers must also obtain formal consent from Nepra, which the regulator says will be delivered within seven working days.
Financially, all interconnection costs, including meters and network upgrade, will be borne by the prosumer, while Nepra has introduced a non-refundable competition fee of Rs 1,000 per kW. The measurement must support bidirectional measurement, either through a single bidirectional meter or through two meters.
The standard duration of the agreement has been set at five years, instead of seven, renewable by mutual consent, while utilities retain the right to disconnect systems in the event of breakdown, non-compliance or maintenance, with or without notice. Prosumers are prohibited from selling electricity to third parties using the utility’s network.
Nepra has also granted itself broad powers to revise purchase prices during the term of the agreements, issue binding instructions, require operational data, impose penalties and relax or modify the provisions if necessary.
The move to net metering marks one of the most significant policy shifts in Pakistan’s renewable energy sector, redefining the economics of rooftop solar and signaling a tighter regulatory grip as the number of distributed generators continues to rise.
The division of power had tried twice to obtain approval from the prime minister and the cabinet. However, he faced political backlash, so the burden was shifted to Nepra to avoid public anger.
Currently, consumers are paying over Rs 2 trillion for capacity to idle power plants that are not operating. Now, that burden has been shifted to solar consumers, who must continue to pay hefty sums to idle power plants.
The country’s agricultural sector has primarily shifted to off-grid solar power and recent changes to the net metering regime will push more consumers off-grid. Industry officials say the country will be forced to pay nearly $1 billion each year to import solar net metering.
The world is encouraging renewable energy, but the current government forced solar consumers to go to the grid system to pay the bill for non-working power plants, but they were getting billions of rupees every year.
