Amid the intense Pakistani sun, millions are investing in solar power to cut soaring electricity bills and reduce dependence on the unreliable grid. However, the enthusiasm for solar energy might soon fade as a heated debate emerges over how much credit solar panel owners should receive for their excess energy.
The existing net metering system allows solar panel owners to offset their electricity bills with the energy they produce. In contrast, the proposed gross metering system would require them to sell all their surplus energy to the grid, potentially at a lower rate than what they pay for grid electricity.
Rumors that Pakistani authorities might phase out net metering, potentially influenced by discussions with the International Monetary Fund (IMF), sparked the current debate. However, the Ministry of Energy later clarified that no such decision had been made.
Initially, some countries, including Pakistan, considered gross metering to promote solar adoption, even providing support for rooftop installations.
If Pakistan reverts to gross metering, it would be the first country to abandon net metering, a move that analysts suggest may not be beneficial.
Aneeq Tabish, a solar energy expert, explained the core differences between net and gross metering. Under net metering, excess daytime power is sold to the grid, and these credits can offset nighttime usage, making it cost-effective for consumers. Conversely, gross metering involves selling all generated power to the grid at a lower, predetermined rate, while consumers buy back electricity at higher retail rates.
For example, K-Electric charges consumers around Rs65 per unit, including surcharges and taxes, but buys solar-generated units at about Rs22. This significant rate disparity means that under gross metering, households would need to generate three times their consumption to achieve zero billing, which is often impractical due to limited rooftop space.
Switching to gross metering could lead to higher electricity costs for homeowners. The first significant impact would be the rate difference, followed by tax implications. Net metering involves no taxes since it operates on a credit system. Gross metering, however, would introduce new tax liabilities on sold electricity, increasing overall costs.
The potential shift has raised concerns among both the public and the solar industry. Tabish noted that such a move could favor industrial users over residential consumers. Daytime solar power generation could benefit industries, but sending excess power back to the grid under gross metering would be less advantageous for residential producers.
Irfan Allahwala, a solar importer, believes the backlash stems from poor communication, suggesting fears of “taxing sunlight” are unfounded and misleading. He pointed out that such measures are not implemented even in major solar markets like California.
The proposed gross metering system could result in higher electricity costs for homeowners, despite the government’s goal to stabilize prices and reduce strain on the national grid. While a fixed rate for solar-generated electricity might simplify revenue streams, it would likely increase homeowners’ electricity bills.
This policy shift underscores the challenges of promoting renewable energy while managing financial and operational complexities. While the government remains committed to solar energy growth, it must address the hurdles posed by a potential move to gross metering.
The debate over net metering versus gross metering is crucial for Pakistan’s solar energy future. Balancing financial concerns with the nation’s clean energy goals will be essential as stakeholders navigate this complex issue. The outcome will significantly impact both homeowners and the national grid, highlighting the need for a solution that supports sustainable energy development without imposing undue financial burdens on consumers.
