ISLAMABAD: Pakistan’s government on Thursday reduced the buyback rate for net metering electricity to Rs10 per unit from previously Rs27 per unit, attributing the decision to a “significant increase in the number of solar net-metering consumers, with associated financial implications for grid consumers”.
The Economic Coordination Committee (ECC) of the country’s federal cabinet, under the chairmanship of Federal Minister for Finance and Revenue Muhammad Aurangzeb, approved a set of amendments to the existing net-metering regulations aimed at reducing the “growing financial burden on grid consumers”, according to a statement from the Finance Division.
The decision comes in light of a significant increase in the number of solar net-metering consumers, with associated financial implications for grid consumers, according to the statement.
“As part of the approved changes, the ECC has revised the buyback rate from the National Average Power Purchase Price (NAPP) to Rs 10 per unit,” the statement read.
Furthermore, the committee allowed the National Electric Power Regulatory Authority (NEPRA) to revise this buyback rate periodically, ensuring that the framework remains flexible and aligned with evolving market conditions.
However, it was clarified that the revised framework will not apply to existing net-metered consumers who have a valid license, concurrence, or agreement under the NEPRA (Alternative & Renewable Energy) Distributed Generation and Net Metering Regulations, 2015.
Any such agreements will remain effective until the expiration of the license or agreement, whichever occurs first. This ensures that the rights and obligations of these consumers, including agreed-upon rates, will continue as per the existing terms.
Furthermore, the ECC also approved an update to the settlement mechanism. “Under the new structure, imported and exported units will be treated separately for billing purposes. The exported units will be purchased at the revised buyback rate of Rs 10 per unit, while the imported units will be billed at the applicable peak/off-peak rates, inclusive of taxes and surcharges, during the monthly billing cycle.”
The ECC also authorized the Power Division to issue proposed guidelines, subject to Cabinet’s ratification, to NEPRA for incorporation into the applicable regulatory framework, ensuring clarity and consistency in the implementation of these amendments.
The Power Division highlighted the pressing need for regulatory adjustments, citing a record decline in solar panel prices that has led to a sharp increase in the number of solar net-metering consumers.
As of December 2024, solar net-metering consumers had transferred a burden of Rs 159 billion to grid consumers, a figure expected to rise to Rs 4,240 billion by 2034 without timely amendments.
The ECC was informed that the number of solar net-metering consumers surged significantly, reaching 283,000 by December 2024, up from 226,440 in October 2024.
The total installed capacity also grew from 321 MW in 2021 to 4,124 MW by December 2024, underscoring the rapid expansion of the net-metering sector.
However, the increase in solar net-metering consumers has contributed to a rising cost of electricity for grid consumers, undermining the government’s efforts to reduce power tariffs.
