Govt to tighten solar net metering regulations, introduce revised buyback plan: report

The government has once again decided to introduce a new set of regulations for solar net metering users, marking a second attempt after its initial proposal was blocked following significant pushback. Under the revised plan, the zero-bill facility for solar net metering will be abolished, and consumers will see a reduction in the sanctioned load from 1.5x to 1.0x, pushing them toward hybrid solar systems that incorporate lithium batteries, The Express Tribune reported. 

A meeting held between various stakeholders and the Ministry of Power discussed the proposed changes. Under the new policy, the concept of net metering will be replaced with net billing, where electricity units will no longer be exchanged. 

Instead, DISCOs will offer cash payments on a monthly basis for any excess electricity exported to the national grid. The shift from credit billing on a quarterly basis to a monthly cash payment is expected to reduce the benefits for solar panel owners.

Despite these changes, the new policy will apply to all categories of consumers, including commercial, domestic, and industrial users. The contract period for licenses under the policy will be reduced from seven years to five years.

Currently, consumers participating in the net metering system share excess electricity with power distribution companies (DISCOs) at a buyback rate of Rs 27 per unit. The new plan proposes to drastically reduce this rate to Rs 10 per unit, significantly impacting solar panel owners who depend on these payments. 

Experts warn that this shift could result in an additional $1 billion in annual import costs for lithium batteries, which would be required for hybrid systems.

According to another report, the government is set to sell its 7,000 MW power surplus to the agricultural and industrial sectors at a flat rate of 7 to 7.5 cents per unit, without providing any subsidies. Federal Minister for Energy Awais Ahmad Khan Leghari confirmed that negotiations with the International Monetary Fund (IMF) have been ongoing for six months to secure approval for this plan. He shared these details during a consultation hosted by the Private Power and Infrastructure Board (PPIB) in Islamabad.

Leghari defended the changes in net metering regulations, explaining that the government was not abolishing the net metering policy, but rather adjusting its mechanisms to ensure long-term sustainability and transparency in the energy system. He acknowledged the expansion of net metering since its introduction in 2017-18, but noted that the growing scale of the system was putting pressure on the grid.

Leghari emphasised that these reforms were necessary for a balanced energy system, saying that the goal was not to harm consumers or businesses but to address the broader national interest. He also mentioned that the government was considering adjusting the buyback rates in line with energy purchase prices to account for fluctuations in energy costs.

He also highlighted that cross-subsidies amounting to Rs174 billion have reduced electricity tariffs for industries by up to 31 percent since June 2024, spurring a rise in industrial energy consumption. Prices for various consumer categories have dropped between 14 percent and 18 percent.