The government has decided to limit the contract validity for net metering consumers to five years, along with periodic revisions to buyback rates, Business Recorder reported citing sources in the Power Division.
This decision comes after criticism from net metering consumers, particularly regarding the reduction of the buyback rate from Rs 27 to Rs 10 per unit. Following the decision, the Power Division sent policy guidelines to the power sector regulator, Nepra.
Sources said that Nepra has been tasked with updating the buyback rate, which will now be pegged to the National Average Power Purchase Price, adjusted periodically.
Prime Minister Shehbaz Sharif chaired a meeting on net metering on March 23, 2024, where he directed the Power Division to clarify public concerns.Â
Additionally, the settlement mechanism will differentiate between imported and exported units for billing purposes. Exported units will be bought at the approved buyback rate, while imported units will be billed at the applicable peak/off-peak rates. If the exported units exceed the imported units’ cost, the net amount will be credited to the consumer’s subsequent billing cycle.
However, the credit cannot be redeemed or cashed out by consumers. Nepra will also issue guidelines concerning the percentage or cap of hosting capacity on each distribution transformer and feeder, following a comprehensive study by the distribution companies within six months of the guidelines’ approval.
New net metering consumers must comply with updated inverter standards, including features like voltage and frequency regulation, anti-islanding protection, and remote monitoring. The capacity of the proposed Distributed Generation (DG) facility will not exceed the consumer’s sanctioned load. If the actual Maximum Demand Indicator (MDI) for export units exceeds more than 10% of the sanctioned load, no exported units will be credited in the bill for that month.
The validity of contracts under the new regulatory framework will be limited to five years. The shift in the net metering regime and the impact on fixed charges have been linked to higher electricity tariffs. The reduced sales due to net metering capacity are expected to contribute to an additional financial burden of Rs 101 billion on consumers in FY-2024. This burden could grow significantly by FY-2034, resulting in a projected increase of Rs. 3.6/kWh in consumer tariffs.
Additionally, the proposed IGCEP 2025 considers the forced addition of over 8,000 MW of net metering capacity, which is expected to negatively affect the least-cost expansion principle.
The real blow to net metering consumers is not the decrease in purchase rate. Rather shift to Gross Metering. Meaning the all imported units will be charges at full tariff rate instead of only the excess imported units (difference of imported minus exported units) which is the case currently. Govt. should keep encouraging this cleaner, predictable energy by not shunning the concept of net metering i.e. only charging the difference of units.
People will just stop investing in clean energy and resort back their investments to our favorite yet useless avenue i.e. property/plots.
Govt must formulate it’s policies for 20 years.
we hv seen this before in case of CNG plants . Once gives the incentive ,people invest billions of Rs and then suddenly switches gears and take U turn.It damages the credit ability of the Govt and people loose faith in Govt.
Keeping apart all the jargon simple answer is people will pay for the inefficincy and corruption of the rulers of Pakistan and it is not limited to this government we have to start from 1992 till date.
Miftah should comment on this reported changes on net metering. Govt.clueless how to move forward
So higher taxes , bigger costs, no pay off .
Govt lost again . This country is going to lose like before.