Proposed Reforms To Increase Taxes On Solar Users

Pakistan’s Power Division is reviewing net metering rules in response to the significant uptake of solar energy. The amendments seek to balance the benefits for solar users with the financial implications for other electricity consumers.

The proposed changes entail redirecting net metering power to the national pool and implementing capacity charges for users. The primary adjustment involves a 50% reduction in net metering rates, intended to extend the payback period for solar investments from three to seven years. Over the past year, the net metering share in the National Grid has surged from 55,000 to 120,000 solar users, totaling 2000 MW.

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The shift of large consumers to solar power has imposed burdens on grid consumers, with forecasts indicating a potential Rs 350 billion increase in costs next year if rates remain unchanged.

To address this strain, the Power Division aims to recalibrate net metering rates. Additionally, the amendments propose integrating net metering power into the national pool and imposing capacity charges on users to ensure equitable contributions to infrastructure costs, typically borne by all consumers. These adjustments are part of a broader effort to manage the evolving energy landscape while maintaining fairness and sustainability in the electricity sector.