PM directs overhaul of net metering system

Overhaul includes transitioning existing net metering regime to a gross billing system 

  • Greenlights 600 MW solar power plant in collaboration with Saudi Arabia

ISLAMABAD: Prime Minister Shehbaz Sharif has issued directives to reform the current net metering system and initiate a significant 600MW solar power project in collaboration with Saudi Arabia.

According to sources, these decisions emerged from sectoral briefings on the power sector held on April 15 and April 18, 2024.

Following the briefing, the Prime Minister has tasked the Power Division with developing a summary to fine-tune the rationalisation of the net metering tariff system. 

This comprehensive overhaul includes transitioning the existing net metering regime to a gross billing system with separate rates for the import and export of electricity units. 

Additionally, a new tariff category specifically for net metering will be created. 

The inclusion or exclusion of fixed charges in the billing structure will be considered, and the rates at which surplus electricity is purchased back will be revised. 

Necessary amendments to existing net metering regulations will be made, and a dynamic formula will be established to ensure a reasonable pay-back period for consumers investing in solar power systems.

“Prime Minister Shehbaz Sharif directed the Power Division to move a summary fine-tuning the rationalization of net metering, including the conversion to gross billing with separate rates for import and export of units, creation of a separate tariff category, consideration of fixed charges, revision of buy-back rates, amendment of net metering regulations, and establishment of a dynamic formula to ensure a reasonable pay-back period,” said sources.

This approach aims to balance the interests of consumers and the power sector, ensuring sustainable and fair practices in the net metering, the sources added.

On the other hand, the Power Division stated last week that the news about ending the net metering policy is not true, and no instructions have been received from the Prime Minister regarding changes to the net metering policy.

Sources also informed that the prime minister has also approved the initiation of a 600 MW solar power project in collaboration with Saudi Arabia, as part of a strategic allocation of 2400 MW. 

This project will be offered for investment to Saudi Arabia on an intergovernmental basis, bypassing the traditional bidding process.

“Out of strategic allocation of 2400MW, only 1x 600 MW solar power plant shall be taken up/offered for investment with KSA. Future generation expansion plan shall be accordingly revised to reflect the above decision,” said sources quoting premier’s direction.

The decision also calls for the revision of future generation expansion plans to accommodate this significant development. This project underscores the government’s commitment to expanding renewable energy sources and fostering international investment partnerships, they added.

It is also learnt from sources that the Prime Minister has directed the preparation of separate summaries for both the net metering rationalization and the solar power project. Additionally, the government has decided to increase the monthly fixed charges for customers installing solar systems, aligning with the broader regulatory amendments.

The Power Division was approached to get its official stance on the matter, but no response was received by the time of filing this story. 

Ahmad Ahmadani
Ahmad Ahmadani
The author is a an investigative journalist at Profit. He can be reached at [email protected].

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