Pakistan’s power regulator ends net metering for new solar consumers, shifts to net billing model

ISLAMABAD: In a major setback for new rooftop solar consumers, the National Electric Power Regulatory Authority (NEPRA) has sharply reduced the buyback rate for electricity sold to the national grid and notified new regulations introducing a revised net billing mechanism.

As per details, the NEPRA has notified new regulations for solar net metering consumers, significantly reducing the electricity buyback rate for new users selling surplus power to the national grid and introducing a revised net billing mechanism that will fundamentally change how solar consumers are billed and compensated.

According to the notified regulations, existing solar consumers will continue selling electricity to the national grid at the previously applicable rate of Rs25.32 per unit. However, for new consumers, NEPRA has approved a major reduction of Rs17.19 per unit in the buyback rate, bringing it down to just Rs8.13 per unit—less than one-third of the earlier rate.

The move is being seen as a major blow for prospective solar consumers who invested or planned to invest in rooftop solar systems primarily to offset rising electricity bills and generate savings through export of surplus electricity.

Under the new net billing mechanism, the unit exported by solar consumers will no longer be treated as equal to the unit imported from the grid. Instead, all electricity imported from the national grid will be charged strictly according to the prevailing government tariff structure and slab-based rates, while exported electricity will be purchased at the revised buyback rate, creating a clear imbalance between what consumers pay and what they receive.

This change effectively ends the earlier “one unit for one unit” net metering advantage for new consumers, which allowed solar users to offset their consumption by exporting excess power and receiving credit at the same tariff rate.

The new regulations also revise the licensing structure for net metering consumers. The validity period of net metering licenses for new consumers has been reduced from seven years to five years, which experts believe could further impact the financial feasibility and payback period of solar investments.

Meanwhile, official data shared by the Power Division’s Power Planning and Monitoring Company (PPMC) indicates that Pakistan has already witnessed massive growth in rooftop solar installations. According to the company, the country currently has around 7,000 MW capacity of net metering-based solar systems connected to the grid.

In addition, the PPMC estimates that around 13,000 to 14,000 MW capacity of solar users are operating off-grid, producing electricity independently without feeding into the national grid.

Energy experts believe the newly notified regulations may further accelerate the trend of off-grid solar adoption, as consumers may now prefer installing systems designed to avoid grid dependency altogether rather than exporting surplus electricity at sharply reduced rates.

The report further revealed that Pakistan currently has a total of 466,000 net metering solar consumers, reflecting a rapid expansion in recent years due to rising electricity tariffs and increasing consumer interest in alternative energy solutions.

The distribution of solar net metering consumers also indicates a strong urban concentration. According to the PPMC report, around 82 percent of net metering solar consumers are located in major cities. Lahore leads with 24 percent of total consumers, followed by Multan with 11 percent, Rawalpindi with 9 percent, Karachi with 7 percent, and Faisalabad with 6 percent.

The regulatory changes are expected to trigger concern among prospective solar consumers and the solar industry, as the sharp reduction in buyback rates could significantly extend payback periods for new installations and reduce the financial attractiveness of grid-connected rooftop solar.

With electricity tariffs already under pressure due to high fixed costs, capacity payments and circular debt, analysts believe the new net billing framework will reshape Pakistan’s rooftop solar market and may push more consumers toward complete energy independence through off-grid systems.