Pakistan revises solar buyback rate to PKR 10 per unit

The Economic Coordination Committee (ECC) of Pakistan's federal cabinet has approved key amendments to Pakistan’s net-metering regulations, aiming to address the increasing financial strain on grid consumers due to a surge in solar energy users.

The decision includes a revision of the buyback rate for solar energy from the National Average Power Purchase Price (NAPP) to PKR 10 per unit.

Additionally, the ECC has granted authority to the National Electric Power Regulatory Authority (NEPRA) to periodically adjust the buyback rate based on evolving market conditions, subject to final approval from the Cabinet.

However, the government clarified that these new regulations will not apply to existing net-metering consumers who already have valid licenses or agreements under NEPRA’s 2015 Distributed Generation and Net Metering Regulations. Those agreements will remain in force until their expiration.

The move comes amid reports that the International Monetary Fund (IMF) pushed the government to reduce the buyback rate for net-metering users since they were not contributing to the capacity payments while on-grid consumers were burdened by excess charges.

New billing structure introduced

As part of the changes, imported and exported electricity units will now be treated separately in monthly billing cycles. Consumers who send surplus power to the grid will receive PKR 10 per unit, while electricity imported from the grid will be billed at standard peak and off-peak rates, including applicable taxes and surcharges.

The Power Division highlighted that the rise in net-metering consumers is driving up costs for traditional grid users, undermining efforts to stabilize electricity tariffs. Officials cited a record decline in solar panel prices as a key factor behind the rapid adoption of solar energy, leading to a surge in net-metering users.

By December, the number of net-metering consumers had increased to 283,000, up from 226,440 in October. The total installed capacity of solar energy systems jumped from 321 mega-watts in 2021 to 4,124 MW in 2024. This growth, however, has transferred PKR 159 billion in costs to grid consumers, with estimates suggesting the burden could balloon to PKR 4.24 trillion by 2034 if regulatory measures are not taken.

The ECC was informed that solar users do not contribute to fixed electricity charges, such as capacity payments and grid maintenance costs, shifting the burden to grid consumers. Officials warned that this could increase overall electricity tariffs and affect the long-term sustainability of Pakistan’s energy sector.

Moreover, data showed that 80% of net-metering users are concentrated in just nine major cities, primarily in wealthier neighborhoods, further raising concerns about the fairness of the existing energy distribution framework.

The ECC emphasized that while solar power adoption is crucial for Pakistan’s energy future, regulatory adjustments are necessary to maintain balance in the power sector and prevent financial disparities between solar and grid consumers.

The amendments will now be forwarded to the cabinet for final approval.