The federal government has presented a proposal to the IMF mission—currently in Pakistan for an economic review under a $7 billion loan deal—to purchase surplus electricity generated by rooftop solar systems at a significantly reduced rate. At present, the government buys this excess power at Rs27 per unit, but the new plan aims to lower that cost to around Rs10 per unit.
Read More: Energy Minister Ensures No Reduction in Solar Net Metering Rates
However, the IMF has raised concerns about how the government intends to manage the issue of individuals who, despite installing solar panels, choose to remain off-grid. There are also reports that the solar net metering system is imposing a multi-billion rupee burden on consumers who draw electricity from the grid. Although discussions have taken place about ending net metering and imposing fixed charges on solar users, the Power Division has denied these measures.
The IMF is particularly worried because solar installations in Pakistan are rapidly increasing—a trend that could intensify in the coming months and years and pose significant challenges for the electricity sector’s overall performance. In parallel, the government has stressed the need to rationalize electricity rates. Out of Pakistan’s 104 power plants (18 government-owned and 86 independent power producers), five ineffective plants have been shut down, and agreements have been reached with 14 IPPs to lower rates. Moreover, rates for eight IPPs using sugarcane waste have been reduced, and negotiations are ongoing with the remaining IPPs.
