The Ministry of Energy has approved a significant revision to Pakistan’s solar net metering policy, introducing a gross billing system to replace the decade-old framework.
The move comes after months of consultations between the National Electric Power Regulatory Authority (NEPRA), distribution companies, and other stakeholders, reflecting growing concerns over the sustainability of the old system.
From net metering to gross billing
Under the previous net metering arrangement, households and businesses with solar systems could feed excess electricity into the grid and receive credit at the same rate they consumed electricity. This encouraged widespread adoption of solar energy, especially as electricity prices surged, offering consumers a reliable way to offset costs.
The new gross billing system, however, will compensate solar consumers at a fixed rate of Rs11 per unit for electricity supplied to the grid. Agreements will now be valid for five years, and all installations up to 25 kilowatts will require a NEPRA licence. Electricity drawn from the grid will continue to be charged according to the standard NEPRA-approved tariff, but imported and exported units will no longer be offset against each other.
Officials explained that the shift aims to align solar incentives with changing market dynamics and grid sustainability. Previously, net metering allowed consumers to receive Rs25.98 per unit for surplus electricity, which the government says was creating losses for power generation companies.
Implications for solar consumers and the environment
Critics argue the new gross billing system could slow the adoption of solar power and push users toward battery storage rather than contributing to the grid. Under gross billing, electricity exported to the grid will be paid at approximately Rs9 per unit, while consumption from the grid will cost between Rs55 and Rs65 per unit.
This separation may reduce the financial appeal of solar installations and inadvertently increase costs for households and businesses seeking clean energy solutions.
Meanwhile, the government will continue purchasing electricity from independent solar power producers at rates exceeding Rs49 per unit. Observers say this approach highlights structural flaws in policy design, potentially undermining environmental goals while burdening solar users with lower returns.
Possible pathways for reform
Experts suggest alternative solutions to balance consumer incentives and grid stability. Introducing a national carbon credit system could allow solar users to transfer carbon credits to distribution companies, creating revenue streams and supporting Pakistan’s climate goals.
Another idea involves establishing Digital Electricity Units Trusts in major cities, enabling solar-generated units to be distributed to underprivileged households through nonprofit organisations.
The Ministry of Energy insists the policy change will not significantly affect most solar users, but with the country at a crossroads in renewable energy adoption, stakeholders are urging careful implementation to safeguard both consumer interests and environmental progress.
