Islamabad, Apr 3, 2025: In a move that is expected to unsettle the nation’s growing solar power users, the Power Division is preparing significant amendments to net-metering regulations in the forthcoming Budget 2025-26.
Senior officials have disclosed that, after an unsuccessful attempt to lower the solar buyback rate from Rs. 27 to Rs. 10 per unit, the federal government now sees major tariff policy changes as the only way to curb the rising number of solar net-metering consumers.
Authorities have hinted at an increase in equipment costs, a revised taxation system on installation and service fees, and a uniform import levy imposed through the Revenue Division.
Traditional grid users are gradually shifting to solar energy to avoid the surging Independent Power Producer (IPP) charges, which will likely escalate further despite the International Monetary Fund’s (IMF) recommendations to reduce power tariffs across the board.
Under the updated framework, the Power Division aims to realign the buyback rate with the National Average Power Purchase Price (NAPP), bringing it down to Rs. 10 per unit.
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This proposal was initially tabled but later shelved due to strong public opposition.
Insiders indicate that the government plans to further decrease the buyback rate below Rs. 10 per unit for new users, while sales tax on solar-related transactions will rise.
The Finance Bill 2025 will empower the National Electric Power Regulatory Authority (NEPRA) to implement a single, decisive rate cut instead of gradual revisions, effective from July 1, 2025.
Officials confirmed that these changes will not immediately impact existing net-metering users with active contracts and regulatory approvals.
However, new entrants to the solar net-metering system will face drastically reduced financial incentives.
Furthermore, experts expect rooftop solar installation to become more complex starting in the next fiscal year.
The government is moving toward a complete overhaul of the net-metering mechanism, separating imported and exported units for billing.
Under the revised system, the government will compensate surplus solar energy sent to the grid at Rs. 10 per unit, while it will charge electricity drawn from the grid at standard peak and off-peak rates, inclusive of taxes and surcharges.
Government officials are increasingly concerned about the dramatic decline in solar panel costs, which has fueled an unprecedented rise in net-metering adoption.
As of December 2024, solar net-metering users had shifted an estimated Rs. 159 billion financial loads onto grid consumers, a figure projected to reach Rs. 4,240 billion by 2034 if left unchecked.
With installed solar capacity skyrocketing from 321 MW in 2021 to 4,124 MW by late 2024, concerns over grid instability are mounting.
Additionally, as part of the budget revisions, solar users are likely to see increased fixed charges in their net-metering bills.
These will encompass capacity fees and additional costs associated with power transmission and distribution networks.
Officials argue that such measures are essential to easing the financial burden on conventional grid consumers, who continue to bear the impact of rising electricity costs.
These proposed reforms will need approval from the federal cabinet before NEPRA incorporates them into its regulatory framework.
However, the message is clear—Pakistan’s solar energy sector is on the verge of its biggest policy shift yet, making the upcoming budget a crucial turning point for renewable energy in the country.
