The federal government is moving to reduce the buyback rate for solar net metering nearly by half. PM Shehbaz Sharif has directed regulators to expedite a review of the proposed tariff.
The Power Division proposed lowering the rate for consumers selling surplus solar power from Rs. 22 per unit to about Rs. 11.30. Officials cited the growing financial burden on other electricity users. PM Shehbaz’s directive, issued during a high-level meeting on October 22, calls for the Power Division and the National Electric Power Regulatory Authority (NEPRA) to verify the new rate and evaluate its impact before final approval.
The government is also reviewing existing net metering contracts to check whether buyback rates can be legally revised without breaching agreements. Meanwhile, new standard contracts are being prepared to align with a proposed Net Billing framework for future customers.
Officials noted that the rapid expansion of rooftop solar has reduced grid sales by 3.2 billion kWh in FY2024, costing other consumers Rs. 101 billion. Average electricity tariffs also rose by Rs. 0.9 per kWh. Projections indicate this burden could increase further, with losses potentially reaching 18.8 billion kWh and costs adding up to Rs. 545 billion by FY2034.
The government’s long-term power plan anticipates more than 8,000 MW of net metering capacity by FY2034. Experts warn this “forced addition” could disrupt least-cost expansion strategies. Grid operators have also reported operational stress during periods of high daytime solar generation, at times forcing restoration of high-loss feeders to maintain system stability.
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This move comes after an earlier plan to set the buyback rate at Rs. 10 per unit was shelved due to cabinet opposition. PM Shehbaz has now ordered fresh consultations and a public communication strategy to explain the changes to consumers and stakeholders.
