Pakistan energy minister says net metering to be reformed, not scrapped

Arab News

2 days ago

KARACHI: Pakistan will not abolish its solar net metering policy but is working to reform the mechanism to make it more 'transparent and sustainable,' Energy Minister Sardar Awais Leghari said on Wednesday.
Net metering allows consumers to generate electricity through solar panels and sell excess power back to the national grid, receiving credits or monetary compensation in return. The policy was introduced in 2017 to promote renewable energy and ease pressure on the national grid.
'The government is not abolishing net metering but is considering changing its current mechanism to a more effective, transparent and sustainable model,' the Ministry of Energy's Power Division said in a statement.
The minister said the expansion of net metering was now impacting the national grid and reforms were needed to address this in a 'timely manner.'
Pakistan's current policy pays Rs21 per unit of solar electricity, resulting in a government subsidy of Rs1.90 per unit, according to the energy ministry. Officials say the cost is ultimately borne by domestic and industrial consumers, effectively subsidizing wealthier users who can afford to install solar panels.
Leghari said the government may align the solar purchase rate with overall energy procurement prices, allowing it to adjust with market fluctuations. However, he stressed that the aim was not to eliminate incentives.
'We are not saying that net metering consumers should provide us with electricity at the rates of the cheapest sources of electricity,' Leghari said. 'These reforms are not a deterrent, but a step toward a better, balanced and sustainable system.'
He said the typical payback period for solar investments in Pakistan was around three years, provided that consumers use 40 percent of the electricity they generate.
Leghari also said the government was in discussions with the International Monetary Fund about the scheme but stressed 'there is no direct financial pressure on us.'
In a post on social media platform X, formerly Twitter, Leghari said the government was reviewing all stakeholder proposals and would not take steps that harmed businesses.
'We strongly hope that any changes in these regulations will be in the best interest of all stakeholders, the national grid and the electricity consumers of Pakistan,' he said.
In January, Leghari called for a review of the net metering policy, saying it was becoming financially unsustainable. A government report from last year said the existing net metering framework had shifted a burden of Rs103 billion ($366 million) onto other electricity consumers in 2024.
Pakistan has set a goal of generating 60 percent of its electricity from renewable sources by 2030 and cutting projected carbon emissions by 50 percent. But the country remains far behind on those targets, despite growing solar adoption and abundant sunlight across most regions.