Govt Revises Net Metering Policy to Stabilize Energy Costs

The Economic Coordination Committee (ECC) has sanctioned amendments to Pakistan’s net-metering regulations, lowering the buyback rate for excess solar electricity to Rs. 10 per unit. This decision aims to ease the financial strain on traditional grid consumers.

The meeting, led by Finance Minister Muhammad Aurangzeb, addressed concerns over the rapid surge in solar net-metering adoption, which has resulted in increased costs for non-solar electricity users. The revised policy empowers the National Electric Power Regulatory Authority (NEPRA) to periodically adjust the buyback rate, ensuring market adaptability.

However, these modifications will not impact existing net-metering consumers with valid agreements under NEPRA’s 2015 regulations—their current rates remain in effect until their contracts expire. Under the updated billing system, exported solar units will be compensated at Rs. 10 per unit, whereas imported electricity will be billed at peak/off-peak tariffs, inclusive of taxes and surcharges.

Pakistan has seen a sharp increase in solar net-metering adoption, with registered users rising from 226,440 in October 2024 to 283,000 by December 2024. Installed solar capacity has expanded from 321 MW in 2021 to 4,124 MW in 2024, reflecting a growing shift toward renewable energy. However, this transition has resulted in a Rs. 159 billion financial burden on conventional grid consumers, projected to skyrocket to Rs. 4,240 billion by 2034 if left unregulated.

Officials argue that net-metering users—primarily urban, affluent households—circumvent fixed electricity costs, such as capacity charges, leading to higher tariffs for conventional users. The updated policy aims to restructure cost-sharing, ensuring power grid sustainability without discouraging solar adoption.

Other Key ECC Decisions:

The ECC also approved:

🔹 Export exemptions for potassium sulfate fertilizer from Gwadar Free Zone, permitting M/s Agven Private Limited to export 10,000 tons annually until December 2025.
🔹 Multiple Technical Supplementary Grants (TSGs), including:

• Rs. 250 million for ICT-based education projects under the Ministry of Federal Education and Professional Training.
• Rs. 220 million to support SME development via the Ministry of Industries & Production.
• Rs. 36.099 million for Pakistan Rangers (Sindh) helicopter maintenance.
• Rs. 15.4 million for Frontier Corps Balochistan (North) helicopter maintenance.
• Rs. 670 million allocated under the Sustainable Development Goals Achievement Programme (SAP) for ICT Administration.

Additionally, the committee reviewed inflation trends, noting a decline in key economic indicators such as the Consumer Price Index (CPI) and food inflation, citing fiscal discipline, improved supply chains, and targeted subsidies as contributing factors.

The ECC also deliberated on a pending gold case under the Customs Reward Rules, 2012, instructing the Ministry of Interior to justify delays and seek a legal opinion before resubmitting the case.

The revised net-metering framework represents a major policy shift in Pakistan’s energy sector. While it continues to support solar adoption, the government is working to balance electricity costs across all consumers. The final decision awaits NEPRA’s approval and Cabinet ratification in the upcoming weeks.