Minister calls for talks as net metering hits 2,500MW
On Wednesday a consultative meeting was held at the Private Power and Infrastructure Board (PPIB) regarding the transition from net metering to net billing and was attended by experts from the solar industry, representatives from relevant government institutions, provincial governments, and other stakeholders.
While thanking all participants, the Federal Minister for Energy clarified that the government is not abolishing net metering, but is considering transforming its current framework into a more effective, transparent, and sustainable model. He averred that he himself had played a key role in introducing net metering back in 2017-18, when the system was still in its early stages.
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Now that the scope of net metering has significantly expanded, it is having serious impacts on the national grid, which needs to be addressed in a timely manner.
He emphasized that the government does not intend to harm any consumers or businesses, and that all decisions are being made in the national interest and with long-term energy sustainability in mind.
He further clarified that the government is not demanding that net metering users sell electricity at the lowest possible rates. If there is any mention of unit purchases, discussions are ongoing about linking them to an energy purchase price, allowing the system to automatically adjust with fluctuations in rates. All such proposals are currently under consideration.
He also highlighted that if net metering users have a payback period of around three years or less, it is considered a viable investment timeframe. If a user consumes 40% of their generated electricity, a three-year return on investment is an acceptable commercial model. These reforms are not meant to discourage, but rather to transition toward a better, more balanced, and sustainable system.
During the meeting, the Federal Minister presented a comprehensive outline of ongoing energy reforms in the country. He stated that the government has terminated 9,000 MW worth of expensive and unnecessary projects that were burdening the electricity system.
Additionally, by imposing a levy on captive power users, they were brought back to the grid, resulting in increased electricity demand. Since June 2024, cross-subsidy worth PKR 174 billion has been provided to industry, leading to up to 31% reduction in industrial electricity rates and a significant increase in consumption.
He added that electricity tariffs for various consumers have decreased by 14% to 18%, which is evidence that government reforms are having a practical impact. Moreover, the government renegotiated contracts with large Independent Power Producers (IPPs), leading to a notable reduction in rates, and excluded unnecessary projects from long-term energy planning.
The Federal Minister also stated that the government currently has 7,000 MW of surplus electricity, which can be supplied to the industrial and agricultural sectors at 7 to 7.5 cents per unit without any subsidies. The government has been consulting with the IMF for six months for approval of this scheme, despite no direct financial pressure. The goal is to balance electricity supply and demand, thereby strengthening the system and benefiting consumers.
He also stressed that improving the grid is among the government's top priorities. Modern and efficient solutions are being developed for both integrated and off-grid systems.
The Minister reaffirmed that all reforms are being carried out under an integrated strategy, and no decisions are being made hastily or on a temporary basis. 'This is the time to modernize our energy system,' he said. There will be positive progress on the suggestions provided by stakeholders, ensuring the process becomes more effective, comprehensive, and in everyone's best interest.
Copyright Business Recorder, 2025
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