Pakistan Ends Solar Net Metering
Pakistan has ended its rooftop solar net metering system. The National Electric Power Regulatory Authority (NEPRA) has introduced the Prosumer Regulations 2026. This policy replaces the unit-for-unit compensation with a net billing framework. The change aims to improve grid stability and align solar generation with tariffs. Existing net metering consumers will remain under old contracts until expiry.
The reforms target urban residential, commercial, and industrial users. Rooftop solar capacity has reached 6,000 MW. NEPRA argues that net metering shifted fixed grid costs to non-solar users. Rapid solar adoption caused revenue losses for utilities and risked frequency instability during daylight peaks.
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From Net Metering to Net Billing
Net metering allowed one-to-one electricity compensation. Consumers exported solar power and received equal credit for grid electricity. Under the new framework, surplus power will be paid at a lower rate. The current Rs. 25.9/unit may drop to around Rs. 11/unit. Consumers will pay full retail tariffs for grid electricity, up to Rs. 50/unit.
Net billing will settle accounts at the end of each 30-day cycle. NEPRA will calculate payments based on actual supply and consumption. This method improves transparency and removes tariff distortions. It also brings solar, wind, and biogas prosumers under a unified system.
Eligible Consumers and Limits
The new rules cover:
- Residential, commercial, industrial, agricultural, and general service consumers
- Connections at 400V or 11kV
- Distributed generation up to 1 MW
Transformers cannot exceed 80% utilization. Capacity is limited to the sanctioned load. NEPRA can approve or deny new connections to prevent grid overload.
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| Consumer Type | Max Capacity | Connection Voltage |
|---|---|---|
| Residential | 1 MW | 400V |
| Commercial | 1 MW | 11kV |
| Industrial | 1 MW | 11kV |
Contract Period and NEPRA Powers
Net billing contracts last five years. They can be renewed for another five years. NEPRA can revise purchase rates during the contract. It can also issue binding directions and impose penalties. Utilities must provide operational data when requested.
These powers allow regulators to manage financial risks and maintain grid stability. They also prevent excessive costs from falling on non-solar consumers. The framework encourages fair energy pricing for all users.
Reasons for Policy Change
Net metering caused utility losses and tariff distortions. In FY2024, sales fell by 3.2 billion units, costing Rs. 101 billion. Wealthy households benefited by reducing grid consumption. Meanwhile, non-solar users paid more.
Other reasons include:
- Over-generation during daytime solar peaks
- Risk of frequency instability
- Disparity with utility-scale solar priced below Rs. 10/unit
- Financial losses projected to reach Rs. 545 billion by FY2034
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Impact on Consumers and Utilities
Solar consumers will receive lower buyback rates. Grid electricity may cost more for all users. Existing contracts remain valid until expiry. New connections and contract renewals will follow net billing.
Utilities can recover costs more fairly. The framework discourages overuse of the grid as a “free battery.” It ensures rooftop solar growth does not destabilize the national grid.
| Parameter | Net Metering | Net Billing |
|---|---|---|
| Buyback Rate | Rs. 25.9/unit | Rs. 11/unit |
| Grid Tariff | N/A | Up to Rs. 50/unit |
| Billing Cycle | Continuous | Monthly settlement |
FAQs
What is Pakistan’s new solar policy?
Pakistan replaced net metering with net billing under Prosumer Regulations 2026. Surplus electricity will be bought at lower rates.
Who is affected by the new framework?
Residential, commercial, industrial, and agricultural consumers with up to 1 MW rooftop solar are eligible.
Will existing net metering users be affected?
No, they remain under old contracts until expiry. New contracts will follow net billing rules.
Why did NEPRA change the policy?
Net metering caused utility losses, tariff distortions, and grid instability during peak solar generation.
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