Solar Users Face New Charges Under Proposed Net Metering Reforms

In a significant move to amend the existing net metering rules, Pakistan’s Power Division has begun working on changes aimed at balancing the benefits for solar energy users with the financial burden on other electricity consumers.

The proposed amendments, which are set to be submitted to the National Electric Power Regulatory Authority (NEPRA) in July, include sending net metering power to the national pool and introducing capacity charges for net metering users.

One of the major changes under consideration is a 50% reduction in the net metering buyback rate. This reduction aims to extend the period for recouping investments in solar power from the current three years to seven years.

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Sources from the Power Division indicate that this adjustment is crucial for maintaining the financial equilibrium within the energy sector. Currently, the share of net metering in the National Grid stands at 2000 MW, with a significant increase in the number of solar users from 55,000 to 120,000 over the past year.

The departure of large consumers from the conventional grid due to net metering has placed an additional burden of Rs 2 per unit on other consumers. This situation is expected to worsen, with projections indicating an increase of up to Rs 350 billion next year if the current rate remains unchanged.

By revising the net metering rate, the Power Division hopes to mitigate this financial strain on the broader consumer base.

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The proposed amendments also involve integrating net metering power into the national pool, which is expected to enhance overall energy distribution efficiency. Additionally, capacity charges will be levied on net metering users to ensure they contribute fairly to the infrastructure costs, which are traditionally borne by all consumers.