Solar industry faces uncertainty, prices drop following amendments to net metering policy 

Pakistan Solar Association warns that new regulations could harm the solar industry, especially impacting the residential and SME sectors

Solar panel prices in Pakistan have started to decline following amendments to the country’s net metering policy, offering some relief to consumers interested in renewable energy options. 

As per reports, the cost of installing solar power systems has dropped between Rs35,000 to Rs175,000 depending on the market, with a 5 kW solar system now priced between Rs5 lac and Rs5.5 lac, and a 7 kW system priced around Rs6 lac. 

Larger systems such as a 10 kW system now cost more than Rs8 lac, while systems between 12-15 kW are priced above Rs1.2 million.

These price reductions follow the federal government’s decision to reduce the buyback rate for solar net metering to Rs10 per unit and introduce net billing for new consumers. The government termed this move to control the rising costs of grid electricity while balancing the financial burden on grid consumers. 

While the policy aims to curb the financial strain caused by the growing number of net-metering consumers, it has drawn criticism from several ministers who warn that it could harm both consumers and the solar market. Despite this, the price drop has made solar energy a more viable option for households and businesses looking for alternatives to expensive grid electricity.

The Pakistan Solar Association (PSA) has raised concerns that the new regulations will have negative consequences for the solar industry, particularly for the residential and small-to-medium enterprise (SME) sectors. 

The PSA has predicted that there will be a shift toward hybrid, battery-powered solar systems as a result of these changes, which may ultimately harm the financial health of the power sector.

Waqas Moosa, Chairman of the PSA, explained that the new regulations would increase the payback period for on-grid solar systems to approximately three years, compared to the current average of 1.5 years. In contrast, hybrid solar systems, particularly those integrating advanced lithium-ion batteries, offer shorter payback periods, potentially leading more consumers to opt for off-grid solutions. This trend could reduce demand for grid-connected services, thereby raising electricity prices for remaining consumers.

The PSA urged the government to withdraw its marketing campaign and engage with stakeholders, including solar industry representatives, before implementing any significant policy changes. With over 500 members, the PSA remains a key voice in representing the solar sector in Pakistan.

Monitoring Desk
Monitoring Desk
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