ISLAMABAD: The federal government has delayed the implementation of its controversial decision to slash the buyback rates for solar net metering, following widespread criticism from stakeholders and concerns raised within the cabinet.
The move to reduce the buyback rate—from Rs 27 per unit to Rs 10—had sparked intense backlash, with experts warning of severe financial consequences for solar consumers and the renewable energy sector.
The federal cabinet, led by Prime Minister Shehbaz Sharif, has now directed the Power Division to reassess the policy and conduct further consultations before finalizing the revised framework.
According to sources, the cabinet’s decision to delay the approval came after several senior members expressed reservations about the proposed changes. The Economic Coordination Committee (ECC) had earlier approved amendments to the Distributed Generation and Net Metering Regulations on March 13, citing the need to ease the financial burden on grid-connected consumers.
The government argued that the rapid expansion of solar net metering had shifted financial costs onto conventional electricity consumers. Official data indicates that the number of solar net-metering users stood at 283,000 as of December 2024, with payouts to solar consumers reaching Rs 159 billion last year. Projections suggest this figure could escalate to Rs 4,240 billion by 2034 if no policy changes are made.
However, the proposed revisions triggered strong opposition from renewable energy advocates. Critics contended that cutting buyback rates would discourage solar adoption, disrupt existing investments, and lead to job losses in the solar industry.
The Renewable Energy Association of Pakistan (REAP) voiced concerns that the amendments—including the introduction of gross metering in place of net metering—could push consumers towards off-grid solar solutions. The shift could adversely impact solar businesses, reduce government revenues, and render costly imported inverters obsolete.
A potential decline in employment opportunities within the solar sector
Increased reliance on off-grid systems, which could lower government tax revenues
Financial losses for consumers who have invested in high-cost inverters based on previous policies
Experts have also criticized power distribution companies (Discos) for failing to anticipate the impact of solar adoption and the need for a sustainable regulatory framework.
While some energy analysts argue that the government’s decision could benefit industrial consumers in the long run, others maintain that discouraging solar adoption will weaken Pakistan’s renewable energy ambitions.
In addition to the reduced buyback rate, the government has shortened the duration of net metering contracts from 10 years to 5 years. Consumers exporting surplus electricity to the grid will now receive payments based on the National Average Power Purchase Price (NAPPP).
New regulations also introduce stricter installation standards, including capacity caps and mandatory use of specific inverters. Meanwhile, authorities are working on reducing overall electricity tariffs by shutting down inefficient power plants and renegotiating agreements with Independent Power Producers (IPPs).
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