Pakistan’s Economic Coordination Committee (ECC) has approved a new net metering policy for solar electricity. The policy lowers the rate of buying electricity from solar net metering consumers. Before, the government paid Rs27 per unit. Now, they will only pay Rs10 per unit. This change has caused a lot of debate.
What is Net Metering in Pakistan?
Net metering in Pakistan allows consumers with solar panels to send excess electricity back to the grid. In return, they receive credits for the power they generate. These credits can be used to offset their electricity bills. It encourages renewable energy adoption by providing financial benefits to solar panel owners.
How Net Metering affects the Electricity prices?
Net metering can affect electricity prices in several ways. As more people use solar panels, the demand for electricity from the grid decreases. This can lead to a higher cost for non-solar users. Since solar panel owners don’t pay for the electricity they use, it shifts the financial burden onto regular consumers.
Why the Change?
In recent years, more and more people in Pakistan have installed solar panels. This is because of frequent power outages and high electricity costs. As a result, many homes and offices generate their own electricity. However, the growing number of solar-powered homes puts a strain on the country’s power system. The government wants to address this issue.
A spokesperson for the government said, “The attack on regular consumers due to net metering has created an additional economic burden.” This new net metering policy aims to reduce that burden.
The Impact of Net Metering
Net metering is a system where people with solar panels can send excess electricity to the grid. In return, they get credit for it. This has caused many people to switch to solar energy. In fact, by the end of 2024, there will be around 283,000 net metering users. This number has grown quickly. It was only 226,440 in October 2024.
The government has calculated that, by the end of 2024, net metering will cost regular consumers Rs159 billion. Without the policy change, this could rise to Rs4.24 trillion by 2034. These numbers highlight the economic pressure solar net metering has created. Hence, the new net metering policy.
Growth in Solar Power
The use of solar power is growing fast in Pakistan. In 2021, solar net metering produced just 321 MW. By October 2024, this had risen to 3,299 MW. By December 2024, it is expected to reach 4,124 MW. This increase shows how much solar power is growing in the country.
What is the New Net Metering Policy ?
Under the new net metering policy, the government will buy solar electricity at Rs10 per unit. This is much lower than the previous Rs27 per unit. However, the government will import electricity during peak hours. This electricity will be bought at Rs60 per unit, including taxes. Energy expert Rao Amir Ali raised concerns. He said that this new net metering policy will make it harder for people to recover the cost of their solar systems.
He explained, “Under the previous rate, the cost of solar systems was recovered in three to four years. But now, it will take 10 to 12 years.”
The government explained that net metering consumers do not pay capacity charges. They also do not pay fixed charges to the electricity companies. This creates more financial pressure on the power system. The government hopes the new net metering policy will fix this issue.
Concerns About Fairness?
Around 80% of net metering consumers live in Pakistan’s nine largest cities. These cities are mainly wealthy areas. The government says this shift in policy is necessary to create fairness. They aim to make the power system more balanced with this new net metering policy.
How the New Net Metering Policy Affects Solar Panel Owners?
Under the new net metering policy, rooftop solar panel owners will be paid Rs10 per unit. However, when they buy electricity from the grid, they will pay the full market price. Currently, this price is around Rs65 per unit. This creates a big price difference. Solar consumers will now pay a lot more for electricity than they receive for their contributions to the grid under the new net metering policy.
For existing solar users, the changes will take place after their contracts expire. These contracts last up to seven years. New users will have to follow stricter technical specifications. The government wants to make sure only high-quality solar panels are installed.
What are the New Changes in Solar Policies?
The ECC has approved changes to the Net Metering Regulations and the new net metering policy has been announced. These changes remove the ability to net solar-generated electricity with the units taken from the grid. The government explained that this new net metering policy aims to reduce the financial burden on regular consumers.
For new solar panel users, the government will buy back electricity at Rs10 per unit. However, electricity purchased from the grid will cost Rs65 to Rs70 per unit. The government claims this new net metering policy will balance the system and prevent more costs from falling on regular consumers.
Government’s Justification for the Policy
The government justified the new net metering policy by saying it would reduce the burden on non-solar consumers. Net metering has added an extra 90 paisa per unit cost for regular consumers. This has caused a financial strain on those who do not use solar power. Despite the changes, the government has also admitted that the energy sector loses a lot due to theft and under-recovery of bills. Every year, around Rs600 billion is lost in this way. The government feels that net metering users are contributing less to these costs.
The New Guidelines for Solar Panels
The ECC also approved new guidelines for solar panels. These guidelines include stricter standards for inverters. They will also include protection against “islanding” and real-time grid interaction. The government wants to make sure solar systems interact properly with the grid under the new net metering policy.
In addition, new solar systems will be capped at a one-to-one ratio for power generation. This means that solar panel owners cannot generate more electricity than the amount of power they consume. If they exceed this, they will be penalised.
Future of the Net Metering?
The new net metering policy will have a big impact on the solar market. The future of net metering in Pakistan remains uncertain. While it may reduce the cost burden on regular consumers, it could discourage people from installing solar panels. Many people will now take longer to recover the cost of their solar systems. The original idea of net metering was to promote renewable energy, but now this new net metering policy is discouraging that goal.
Conclusion
The new net metering policy in Pakistan is a big change. The government hopes it will help reduce the financial burden on regular consumers. However, it may also slow down the growth of solar energy in the country. The new net metering policy will impact rooftop solar users and make it harder for them to recover costs. As the country faces energy challenges, these changes could have lasting effects on the energy sector.
FAQs
What is net metering?
Net metering allows solar panel owners to sell excess electricity to the grid.
What are the new rates of exporting units?
The new rate for exporting electricity from solar panels is Rs10 per unit under the new net metering policy. This is a significant drop from the previous rate of Rs27 per unit. Solar consumers will now be paid less for the electricity they send back to the grid. However, the rate for importing electricity during peak hours is Rs60 per unit
How does the new net metering policy affect solar consumers?
Solar consumers will now be paid less for their electricity and will pay more for grid electricity.
How long will it take to recover solar costs under the new policy?
It will take 10 to 12 years to recover the cost of solar systems under the new policy.
Why did the government change the solar policy?
The government aims to reduce the financial burden on regular electricity consumers.
Will the new net metering policy affect existing solar users?
Not immediately but existing users will face changes when their contracts expire.
How has solar power grown in Pakistan?
The total solar net metering capacity has grown from 321 MW in 2021 to 4,124 MW in 2024.
What are the new standards for solar systems?
New systems will have stricter standards, including protection against “islanding” and real-time grid interaction.
