Pakistan regulator reviews net metering rules amid solar surge

Pakistan’s power sector regulator, the National Electric Power Regulatory Authority (NEPRA), on Friday held a public hearing on proposed changes to net metering regulations as officials highlighted a sharp rise in solar power installations across the country.

Director General Licensing at NEPRA told the hearing that solarization has increased significantly over the past two years, adding that net metering was never intended as a tool for revenue generation. He said solar capacity has been growing at an average rate of 3% annually.

It was shared that the number of protected consumers has doubled in recent years. Authorities noted that solarization is expanding rapidly, with installed solar capacity expected to reach 7,000 megawatts by the end of this year.

Power Planning and Monitoring System officials projected that by 2034, net metering capacity could increase to 14,000 megawatts if the current trend continues.

Other officials informed the hearing that the power grid is facing instability due to the rising number of net-metering solar users.

During the hearing, it was also highlighted that the financial burden created by solar consumers is increasingly being transferred to non-solar consumers. Officials stated that across the country, including Karachi, the number of net-metering solar consumers has reached 466,000.

According to officials, non-solar consumers are currently bearing an annual financial burden of PKR 270 billion due to net-metering solar users. They warned that if the situation remains unchanged, this burden could rise sharply to PKR 628 billion per year.

The DG Licensing said some consumers have illegally expanded their generation capacity beyond approved limits, contributing to operational challenges.

The proposed rules

At present, net metering is permitted for wind and solar consumers. Under the proposed new regulations, biogas-based generation will also be included, officials said.

The proposed rules also aim to revise the duration of net metering agreements. Under the new framework, contracts for new net metering consumers will be valid for five years. Existing consumers, however, will continue under their current seven-year agreements.

NEPRA officials assured the hearing that buyback rates for existing net metering consumers will remain unchanged, providing protection to early adopters of renewable energy.

The regulator said feedback from stakeholders would be reviewed before finalizing the new regulations.

The proposed and ongoing changes mark a significant shift in how rooftop solar is treated. Under the current net metering system, electricity exported to the grid is offset on a one-to-one basis against electricity imported. The new policy, commonly described as a move to net billing or gross metering, will instead calculate imported and exported electricity separately. A

s part of this shift, the buyback rate for excess solar power is expected to fall sharply, from around PKR 27 per unit to roughly PKR 11-13 per unit, while the price of electricity purchased from the grid will remain high.

The changes will primarily affect new solar consumers, while existing users holding valid seven-year contracts are expected to be “grandfathered,” allowing them to continue under the current rules until their agreements expire.

In addition, the tenure of net billing agreements for new connections is likely to be reduced, with license validity expected to fall from seven years to five years.