Net metering shifts PKR 102 billion burden on poor Pakistani consumers in 2024

Pakistan’s net metering system, designed to encourage solar power adoption, shifted a PKR 102 billion burden onto poorer electricity consumers in 2024, according to an official report.

If the policy remains unchanged — which the government is reluctant to do for political reasons — this figure could escalate to PKR 503 billion over the next decade.

Net metering allows consumers with solar installations to sell surplus electricity back to the grid. While it benefits users by reducing their bills, it disproportionately impacts the majority of electricity consumers, who must absorb the financial burden.

The report reveals that net metering users account for just 0.6% of total electricity consumers, while the remaining 99.4% shoulder the added costs.

Approximately 80% of net metering users reside in affluent neighborhoods across major cities, including Islamabad, Lahore, Karachi, and Faisalabad. These wealthier consumers from eight major cities capitalized on declining solar technology costs, reducing their monthly electricity bills by 35% on average.

However, this benefit came at a steep cost for the rest of the population, who saw a combined PKR 102 billion added to their electricity bills in 2024 alone.

Solar net metering capacity in Pakistan has grown rapidly, from 321 megawatts in 2021 to 3,277 megawatts in 2024. Projections indicate it could reach 12,377 megawatts by 2034 if current trends persist.

Experts argue that the government should protect consumers from additional burdens while allowing net metering to continue as a facility, without becoming unbalanced and exploitative.

Globally, support prices are initially set to promote new technology, but when it becomes imbalanced, policies are adjusted to align profits with the market.

In the case of solar net metering, electricity purchase rates have been reduced significantly worldwide to ensure homes have access to green energy without creating an unbalanced market. However, in Pakistan, delayed decisions have led to unfair and unbalanced profits from solar net metering, transferring this burden to other consumers.

NEPRA’s role has been criticized as anti-public, with calls for it to review technology promotion policies instead of making the public bear the cost of reducing the wealthy's bills.