ISLAMABAD (PEN) : The federal government has decided to delay the implementation of controversial changes to the solar net metering policy, which would have slashed buyback rates for solar energy producers. The move, which had sparked significant criticism from various stakeholders, is now under review following concerns raised by members of the cabinet.
Decision to Delay Amid Widespread Criticism
The proposed revision, which would have reduced the buyback rate from Rs 27 per unit to Rs 10, was met with strong opposition from renewable energy advocates and industry groups. Critics warned that the drastic reduction could have severe financial implications for solar consumers and the broader renewable energy sector.
In response, the federal cabinet, headed by Prime Minister Shehbaz Sharif, directed the Power Division to conduct further consultations and reassess the policy before finalizing any changes. The decision to delay approval came after several senior cabinet members raised reservations about the potential negative impact of the policy shift.
Impact of the Proposed Changes
The Economic Coordination Committee (ECC) had previously approved amendments to the Distributed Generation and Net Metering Regulations on March 13, citing the need to ease the financial burden on consumers connected to the national grid. According to the government, the expansion of solar net metering had increased financial costs for conventional electricity consumers.
By December 2024, over 283,000 solar net-metering users were registered, with payouts to solar producers reaching Rs 159 billion. Projections suggest that by 2034, these payouts could rise to Rs 4,240 billion unless the policy is adjusted.
However, the proposed changes triggered concerns from industry experts, who argued that cutting buyback rates could discourage future investments in solar power, disrupt existing investments, and result in job losses within the solar sector.
Concerns from Industry Stakeholders
The Renewable Energy Association of Pakistan (REAP) expressed strong disapproval of the proposed amendments, particularly the introduction of gross metering instead of net metering. REAP warned that the policy shift could push consumers toward off-grid solar systems, potentially decreasing government revenues and rendering expensive imported inverters obsolete.
The association also outlined three primary risks associated with the changes:
– Job losses within the solar energy sector.
– Increased reliance on off-grid solutions, which could reduce government tax revenue.
– Financial losses for consumers who had invested in costly inverters based on the previous net metering policy.
Furthermore, experts pointed to a failure by power distribution companies (Discos) to anticipate the rise of solar energy adoption and the need for a more sustainable regulatory framework.
Government’s Response and Future Steps
Despite the pushback, government officials have reiterated their commitment to regulating solar net metering in a way that ensures the fairness of costs across all consumers while also promoting the growth of renewable energy. Power Minister Rehan Jawed emphasized that over 4,000 MW of solar power had already been integrated into the national grid, with the aim to increase that number to over 12,000 MW in the next eight years.
While the final policy direction is still being decided, the government’s delay in moving forward with the controversial changes signals a willingness to balance renewable energy promotion with a fair cost distribution across the energy sector.
Other Cabinet Decisions
Alongside the review of solar net metering policy, the federal cabinet also approved various other measures during its meeting. These included the ratification of agreements for power generation from bagasse, the passage of the Whistleblower Protection and Vigilance Commission Act 2025, and revisions to tax laws affecting Islamabad. Additionally, the cabinet discussed passing on the benefit of lower petroleum prices to electricity consumers.
As consultations continue, stakeholders across the energy and renewable sectors are urging the government to adopt a policy that both supports the growth of solar energy and protects the interests of consumers and the industry at large.
