Pakistan Plans Halving Solar Net Metering Feed-in Tariff

PVTIME – Pakistan’s government is planning to halve the solar net metering feed-in tariff to 11.30 rupees per unit, according to local media. This follows the rapid growth of rooftop solar, which has sharply reduced grid revenue. However, the Prime Minister has ordered a full review of current tariffs and their impact before any policy adjustments are made.

Data from the Power Ministry shows that the widespread use of rooftop solar in the 2024 fiscal year cut grid electricity sales by 3.2 billion units, costing distribution companies 101 billion rupees. To cover this loss, average tariffs for non-solar users were increased by 0.9 rupees per kWh. If this trend continues, it is projected that solar will replace 18.8 billion units of grid sales by FY2034. This would lead to a loss of 545 billion rupees and a potential tariff hike of 5–6 rupees per unit for consumers.

An official explained that the system had effectively become a free battery for solar users. Current solar users sell excess power at 22 rupees per unit without contributing to the fixed costs of grid infrastructure, thereby shifting these expenses to other grid users. Meanwhile, new large-scale utility solar projects have secured tariffs below 10 rupees per unit, highlighting the imbalance in the current net metering rate. The Power Ministry has proposed a tariff of 11.30 rupees to align with market realities and prevent further increases for non-solar users.

Pakistan’s installed solar net metering capacity currently stands at around 6,000MW. Beyond financial pressures, the system poses operational challenges in winter, when national power demand drops to 8,000–9,000MW, increasing the risk of a daytime power surplus. At a meeting on 22 October, the Prime Minister instructed the Power Ministry and Pakistan’s National Electric Power Regulatory Authority to conduct a comprehensive review and verification of the current feed-in tariff and its impacts before advancing any changes. There has been no clear progress reported on the review, and the timeline for the new tariff remains undecided.