Once celebrated, Pakistan’s rooftop solar revolution- an affordable, clean alternative that empowered households and businesses to beat high electricity bills and chronic outages- has become a crisis for the national power grid.
Challenging the viability of the grid, growth in solar power generation at the private level has sparked policy confusion, financial strain, and deep distrust between consumers and the state.
At the heart of the storm is the dramatic shift in how solar users are compensated for the electricity they feed back into the grid — and how these changes are threatening both consumer confidence and national energy stability.
From net metering to net billing: a policy U-turn
For years, Pakistan’s net metering regime allowed rooftop solar owners to offset their grid consumption with the electricity they exported back to the system. Under this system, units sent to the grid were credited at roughly the same value as those drawn, effectively balancing imports and exports. This simple 1:1 unit exchange was central to the solar boom.
However, in 2025, the government drastically reduced the buyback rate from about Rs 27 per unit to just Rs 10 per unit for new net-metering customers. The rationale the government cited was the rising financial burden on grid-dependent consumers as solar uptake surged.
The rate change policy, however, protected existing users (registered before the rate reduction). They were permitted their previous higher rates according to their original contracts until expiry. However, the new rules changed the economics dramatically.
Now the federal government is moving toward net billing, a system where imported grid electricity is charged at full retail tariffs, but solar exports are credited at a much lower rate.
The National Electric Power Regulatory Authority has even recommended replacing net metering entirely with gross metering, where solar exports are bought at a fixed feed-in tariff, and all grid consumption is billed separately.
In plain terms, a consumer may now be paid Rs 10/unit or approximately Rs 11.30 per unit for daytime solar exports but still pay Rs 40–Rs 65 per unit or more for electricity drawn from the grid. It appears to be a huge disparity that was unimaginable under the old policy.
Wrong billing and ministerial intervention
The tensions escalated in January 2026 when the Power Planning and Monitoring Company (PPMC) issued a directive that inadvertently blocked all net-metering credits for certain solar users, even for units within their sanctioned generation limits. Consumers faced bills showing zero credit for electricity exported to the grid, causing widespread outrage, particularly in major cities such as Lahore, Multan, and Islamabad.
Power Minister Sardar Awais Leghari intervened promptly, reviewing the billing discrepancies, and clarified that only units exported beyond the officially sanctioned capacity should be restricted. He also directed distribution companies to correct all previous erroneous bills in the next billing cycle.
This instance of the wrong billing and ministerial intervention highlighted gaps in the government’s policy and implementation levels. It also brought to the fore the government’s stance: while solar energy is encouraged, exports exceeding the approved generation limit cannot be credited, ensuring fairness and grid stability.
Why this Matters: the grid’s financial strain vs consumer reality
The government’s justification for these radical policy shifts is that net metering has shifted cost burdens from solar adopters to grid-dependent consumers.
Rising tariffs and fixed costs, especially capacity payments to Independent Power Producers (IPPs) that must be paid regardless of consumption, have created a fiscal pinch. Some estimates put the additional burden at tens of billions of rupees.
But the reality on the ground paints an equally stark picture for solar adopters and the broader clean energy market. Rooftop solar capacity has surged, with net-metering installations reaching several gigawatts, and solar generation steadily rising as a share of total electricity output in major cities.
For a homeowner who has invested heavily in a solar system expecting a predictable payback period based on the Rs 27 per unit buyback price, the cut to Rs 10 or less, coupled with full retail grid charges, is devastating.
Many solar investors now find the economics unviable, prompting fears of a slowdown in investment in solar power, which could stall Pakistan’s clean energy transition.
Policy backlash and investment chill
Business groups such as the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) have publicly criticised the rate cuts, saying they risk deterring billions in private investment and could push consumers toward hybrid systems that are costly and less efficient.
Consumer anger isn’t hypothetical either. Reports from solar owners nationwide describe exported units suddenly showing as zero, billing disputes over credits, and confusion as distribution companies grapple with new directives.
This administrative chaos underscores the deep mistrust the rapid policy shifts have sown.
Import duties and future costs
The government also been trying to introduce an 18 per cent tax on imported solar panels in its 2025–26 budget, though that proposal later met resistance.
While local industry protection is a valid goal, added import taxes would raise upfront costs for consumers and slow rooftop solar adoption, at a time when Pakistan’s energy security arguably needs it most.
There have also been moves to realign customs valuation of panels based on global price drops, fixing import values at roughly $0.08–$0.09 per watt, a technical but meaningful tweak to official valuation.
Net metering vs gross metering: what’s the difference?
At its core, net metering enables solar owners to balance their imported and exported units of electricity at equal value, reducing monthly bills, even to zero in certain domestic cases. It rewards self-generation and lowers grid dependency.
Gross metering/Net billing, by contrast, separates accounting of exports and imports. Solar exports are purchased at a predetermined low rate, and grid consumption is billed at full price, often resulting in a net charge even if generation equals consumption.
For policymakers, gross metering reduces the financial burden on distribution companies and protects non-solar consumers. For solar adopters, it erodes the economic case for rooftop installations unless paired with battery storage, which is affordable only for a few households, or it substantially adds to the overall cost of the solar project.
The bigger picture: structural grid challenges
Pakistan’s power sector problems run deeper than solar incentives. Capacity payments to IPPs, debt overhang, and tariff mismatches predate the solar boom.
Solar energy has only exposed these flaws more visibly.
Unless those root issues are resolved, tweaking solar tariffs is a band-aid solution, not structural reform.
A turning point for Pakistan’s energy future
Solar isn’t the enemy of grid sustainability, but the policy instability is. To build a reliable, financially viable national grid alongside a thriving distributed solar market, Pakistan needs credible, consistent, and transparent rules.
Contracts must be honoured with clear tariff frameworks and equitable cost-sharing.
Without that, Pakistan risks not only grid instability but also a chilling effect on one of the few energy success stories in recent years.
In Pakistan’s energy transition, the grid and solar must advance together — not at each other’s expense.
