By Amir Saeed
ISLAMABAD– The government has revised the solar net metering policy, cutting the buy back rates for surplus power generated by rooftop solar panel owners from Rs27 per unit to Rs10 per unit.
Speaking to this reporter, a spokesperson for the Ministry of Energy said the Economic Coordination Committee of the Cabinet had approved the new policy to prevent additional burdens on other consumers caused by solar net metering users.
Changes in Net Metering Usage and Exchange Options
Under the revised policy, new solar net metering users will be able to purchase electricity along with their self-consumption, but they will not have the option to exchange or net-off units with each other.
Need for Policy Revision: Addressing Cost Burden and Technology Prices
The spokesperson emphasized that, following a significant drop in solar technology prices, there was an urgent need to revise the policy, which had been repeatedly highlighted in various forums.
By the end of 2024, solar net metering users had transferred a burden of Rs1.5 per unit to other consumers, totaling an annual cost of Rs 159 billion.
Projected Cost Burden if Policy Remained Unchanged
According to estimates, if the policy had not been revised, the burden transferred to other consumers by solar users would have reached Rs4,240 billion by 2034, or Rs3.18 per unit over the next decade.
The new policy will apply to new net metering users, while existing users will continue to benefit from the old policy until the end of their contracts. After their contract period expires, they will also transition to the new policy.
Ensuring Return on Investment and Addressing Consumer Burden
The spokesperson further noted that the revised policy not only addresses the additional burden on nearly 40 million consumers but also ensures that the return on investment for solar users would be achievable within four to five years, which is typical for any legitimate business.
Growth in Solar Net Metering Users and Installed Capacity
By the end of 2024, the total number of solar net metering users in the country had reached 283,000, up from 226,440 in October 2024. Over just four months, an additional 800 megawatts of solar net metering had been installed.
In October 2024, solar net metering users were transferring an additional burden of Rs102 billion to regular electricity consumers, which increased to Rs 159 billion by December 2024.
Rapid Expansion of Solar Net Metering Installations
The spokesperson also pointed out the growing pace of solar net metering installations. In 2021, the total capacity of net metering users was 321 megawatts, which increased to 3,299 megawatts by October 2024. By December 2024, this had reached 4,124 megawatts, reflecting the rapid expansion of solar net metering.
Impact on Electricity Prices and Government Efforts
“At a time when the government is working to reduce electricity prices, the increasing number of solar net metering users is driving up the per-unit cost for consumers, which is undermining the government’s efforts,” said the power ministry spokesperson.
Compensation and Return on Investment Alignment
The official also stressed that solar net metering users are currently receiving compensation per unit not only for their energy but also for capacity and profit, which is unjustifiable in any context.
Additionally, the return on investment period should be extended to align with typical business practices.
Geographical Distribution and Economic Demographics of Net Metering Users
“It is important to note that currently, 80% of net metering users are in the country’s nine major cities. A satellite survey of these cities using Google data would show that these are also the wealthiest areas,” he added.
